The courage to choose! Primogeniture and leadership succession in family firms

CITATION

Calabrò, A., Minichilli, A., Amore, M., & Brogi, M. (2018). The courage to choose! Primogeniture and leadership succession in family firms. Strategic Management Journal, 39(7), 2014–2035

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ABSTRACT
Research Summary: Building on a unique data set with
information on the nuclear structure of entrepreneurial
families, we integrate leadership succession into a socioemotional
wealth (SEW) logic to test the antecedents and
consequences of primogeniture vis-à-vis second- or
subsequent-born selection in family firm succession. Our
findings suggest that appointing a family firstborn sibling is
more likely when there is a high degree of SEW endowment
and the family firm has pre-succession performance
below aspiration levels. Next, we find that appointing a
second- or subsequent-born sibling has a positive and significant
effect on post-succession firm profitability, particularly
when the firm is in its second generation or later.
Managerial Summary: What drives succession choices
in family firms? What are the performance implications
of each succession choice? These are questions of vital
relevance for every business owner. Focusing on the pool
of potential family heirs at the time of succession, our study
adds to the debate on the drivers of succession choices by
suggesting that having a family intensive governance structure
fosters primogeniture as the main succession logic, even
when the family firm is experiencing lower profitability.
Our study informs business owners on the implications of
different succession policies, suggesting that family firms
that have the courage to disregard primogeniture and choose
more wisely the family successor are also the ones
experiencing higher post-succession performance


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