Research partnership looks into succession of family businesses
A partnership to boost academic research into organisations, strategy and governance at family businesses has been formed by Dutch co-operative bank Rabobank, global top-five accounting firm BDO and the Erasmus Centre for Family Business (ECFB) based at Rotterdam School of Management, Erasmus University (RSM). They will be joining forces to convert world-class research into identifiable business cases and practical resources for families businesses to use. The partnership’s first research project will take place this spring and will focus on changes in business strategy when a new generation takes over.
The partnership replaces the Dutch Family Business Centre (Nederlands Centrum voor Familiebedrijven, NCFB) which was set up by Rabobank and BDO 20-year ago to research family businesses. There are a substantial number of family businesses in the client databases of BDO and Rabobank ― which corresponds to the percentage of family businesses in the Netherlands.
A logical choice of collaboration partners
The ECFB is one of the leading university centres in international research into family businesses. Professor of Organisation Theory, Development and Change at RSM and co-director of ECFB Professor Pursey Heugens says: “Our aim is to gain new insight into family businesses every year, which will help us understand what makes them unique. This is because these entrepreneurs share the communal dimension in family businesses, regardless of the sector they operate in; it isn’t merely their job, it’s also an extension of their personal identity.”
Mirelle Pennings, Director of Large Enterprises at Rabobank, says: “We want to inspire family businesses and more particularly, we want to provide them with a challenge in the form of new perceptions so that they can develop further. Our partnership provides a knowledge platform, but it will also enable us to forge links with and among family businesses.” Joost Vat, partner at BDO, adds: “We intend to reinforce our position as the main authority for family businesses in collaboration with ECFB and Rabobank. This will enhance our services with well-founded developments from the academic world.”
First research project: changes in strategy when a new generation takes over
Succession in family companies is a precarious event. Only 30 ― 35 per cent of family businesses survive the first change of generation, while less than 5 per cent survive the third change. In addition, profitability of family businesses plummets alarmingly after each succession. The ECFB’s first research project will focus on changes in strategy when a new generation takes over, and will be published in spring 2016.
It has emerged that many successors feel more like stewards than entrepreneurs. “This is mainly because entrepreneurship becomes a lot more conservative after succession,” says Professor Heugens. “All prospective directors at family businesses have to face this fact, preferably a long time before they become responsible for the continued existence of the company.” Joost Vat adds: “Family businesses should take care that succession does not inhibit their entrepreneurship. How can they make sure that entrepreneurship and innovation remain key factors, particularly after succession? This is the main motive behind our first research project.”
Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s leading business schools, and ranked among the top three for research. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who carry their innovative mindset into a sustainable future thanks to a first-class range of bachelor, master, MBA, PhD and executive programmes. RSM also has offices in Chengdu, China, and Taipei, Taiwan. www.rsm.nl
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