Family Business Succession Practices In The Textile Industry: A Study Of Cloth Merchants At The Makola And Kumasi Central Markets
Date
2020-10
Authors
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Journal ISSN
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Publisher
University of Ghana
Abstract
Family business is one of the engines that drive social and economic development as well as wealth creation. However, one such growth agenda is succession planning which requires that business of cloth merchants grow over time from one generation to another. A family enterprise’s continued existence in diverse ways depends on the support from kin and non-kin groups. The study explored family business succession planning practices relating to motivations of cloth traders, succession pathways, knowledge transfer, training needs and factors that facilitate or militate against business owner's succession strategies in the textile industry. Overall, cloth traders’ succession practices in local textile markets constitute a phenomenon that requires social consideration.
The study employed sequential mixed method research approach. Data was collected using both qualitative and quantitative methods. Qualitative data was collected through key informant interviews, non-participant observation and informal discussions whereas quantitative data was gathered from cloth traders with interviewer questionnaire. A total of twenty-six (26) key informant participants and three hundred and fifty (350) respondents took part in the study. Moreover, secondary data was obtained from relevant documents. The study areas are Makola and Kumasi central markets while cloth traders represent the subjects of the study. Thematic network analysis was used to analyse the qualitative aspect of the study, while quantitative data were analysed by using SPSS.
The analytical framework underlining the study was rational choice theory. Rational choice theory was chosen because it explains and weighs various alternative actions of costs and benefits in decision making. The theory unearthed how alternative calculations done during social interaction and its role in the formation of stable social order to avoid difficult decisions in relation to family business succession planning. The theory helps the
actor to evaluate whether decision making actions are consistent with the choices of cloth traders. These alternative sources of decisions assist the owner to work as well as achieve set goals.
The findings suggest that cloth traders’ succession planning practices are motivated by major and minor triggers of business continuity, uncertainty in life and avoidance of conflicts among conflicts. The basis for succession planning and choice of possible successor is guided by rational decision-making process. The study revealed that cloth traders are more likely to select daughters and sons to groom as successors against extended family members and acquaintances. The study identified diverse succession planning pathways through early childhood preparation, formal education, and non-schooling family members. The study revealed that cloth trading knowledge is transferred from owner to successor. Coaching practices are carried out mainly through on-the-job training, verbal communication, and family discussions.
Both intra family and non-family members facilitates succession process with commitment to planning, support from husband, extended family members, reliable customers, suppliers, and stable economic activities. On the contrary, poor family bonds, unwillingness to take part in family business, slow adaptation during successor training, appointment of non-family members and poor business performance may derail succession process.
The study recommends practical guidelines for cloth merchants on successful succession planning. Though exploratory, the findings could serve as the basis for further academic studies on succession practices for entrepreneurs and different cluster of market traders. Some of such future research areas of succession planning practices in Ghana have been identified
Description
PhD. Sociology
Keywords
Family, Business, Practices, Succession, Textile Industry, Kumasi Central Markets