Continuity of the family business, based on professionalization, institutionalization, and succession. Case of study
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Keywords

organizaciones
empresas
negocios
crisis
sucesión
generaciones
mercados
finanzas
estrategias
recursos humanos
instituciones
modelos de negocios
continuidad
trabajo
gestión
administración organizations
enterprises
business
crisis
succession
generations
markets
finance
strategies
human resources
institutions
business models
continuity
worked
management
administration

How to Cite

Marcelino Aranda, M., Torres Ramírez, A., Novoa, J. C., & Camacho, A. D. . (2022). Continuity of the family business, based on professionalization, institutionalization, and succession. Case of study. Nova Scientia, 14(28). https://doi.org/10.21640/ns.v14i28.3010

Abstract

This work contributes to research on the continuity of family businesses, by providing empirical evidence of the coexistence and feedback between the processes of succession, professionalization, and institutionalization, based on elements of strategic planning, human resources, and governing bodies. A qualitative methodology was used, with a descriptive scope, through the case study method. The work was conducted in a small family business located in Mexico City, dedicated to specialized technological services. The succession process occurs from a family institutional logic. The founding father has served as the successor's mentor and under his leadership —although not consciously— has conducted professionalization and institutionalization with the successor's participation. With the professionalization of the successor and the incorporation of external professionals in key areas of the business, greater operational efficiency and better financial performance are expected. Although the company has been in the market for 15 years, it does not have a systematized organizational structure that allows it to be more efficient and obtain better financial results, so from institutionalization, the structural elements that support the business model, so that the decisions that management makes are not reactive but proactive, especially in dynamic and hostile economic environments (such as the health crisis caused by the COVID-19 pandemic). This work reveals the elements that contribute to increase the percentage of companies, mainly of micro and small sizes, to achieve the generational transfer of the founding father to the children, from visualizing the coexistence and feedback between the processes of succession, professionalization, and institutionalization for the continuity of the family business. The importance of formalizing the family protocol to give certainty of the transfer of control and ownership is rescued. The institutionalization process can generate conflicts between the founding father and the successor in their ways of taking risks and of strategic management. The COVID-19 pandemic crisis showed that one of the main strengths of the family business is the solidarity and commitment of family members in crisis situations. Finally, the succession process, in order to have a higher probability of success, requires the professionalization of the successor, and this, in turn, generates the institutionalization of the organization.

https://doi.org/10.21640/ns.v14i28.3010
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