The Role of Knowledge Creation and Transfer in Family Firm Succession

1. Introduction

On a global scale, family firms are a dominant sector of the economy. One recent estimate shows that family firms account for over half of global GDP and around 67% of global employment [ 1 ]. During the COVID-19 pandemic, family firms have been highly resilient, with 64% expecting revenues to increase in 2021 and 79% not needing additional capital in 2020 [ 1 ]. Family firms are equally important in Thailand, where they comprise at least 80% of Thai firms, including around 75% of the Stock Exchange of Thailand (SET)-listed domestic firms, accounting for 64.9% of the total market valuation [ 2 ]. However, relatively little is known about some aspects of family firm management, including the transfer of knowledge during the leadership succession process. Family firms are characterized by the transfer of both knowledge and leadership between generations [ 3 ], but firms still suffer from change resistance and poor preparedness [ 1 ]. Some family firms may not even engage in active succession planning, or leave it too late to prepare effectively for the sudden death or incapacitation of the current leader [ 4 ]. Only around 30% of family firms successfully transfer between the first and second generations; later generational successions occur even less frequently [ 5 ]. Thus, the success of the succession process poses a major challenge for long-lived family firms.

One of the ways that the succession process can succeed is ensuring that the designated successor has the requisite knowledge to effectively lead the firm [ 4 ]. However, problems such as a reliance on tacit knowledge [ 6 ] and the multiple roles of leaders [ 7 ] make knowledge transfer particularly challenging. To date, there has been no formal investigation of knowledge processes and how they influence the knowledge creation and transfer process throughout the succession cycle. This research gap limits both the practical understanding of succession preparation and planning within the family firm and the theoretical understanding of the role of knowledge transfer in the succession process.

The objective of this research is to investigate the role that knowledge creation and knowledge transfer processes play in family firm intergenerational succession in Thailand. The research questions include: (1) What processes are used for knowledge transfer in the succession planning of family firms? (2) When are these processes used during the succession process? (3) What differences can be observed between firms of different sizes? In answering these research questions, the researcher will be able to develop a theoretical model of knowledge transfer along the succession process lifecycle, beginning with the earliest stages of preparation (typically before the successor enters the workplace formally) and ending at the point of succession. This will be both a novel theoretical model and one that offers practical value for the succession planning process.

The paper begins with a review of the literature, including key concepts of the knowledge management process, knowledge management in family firms, succession in family firms, and the role of knowledge management in the succession process. This culminates with a presentation of the theoretical framework. The research method is then described. The findings resulting from the study are presented and then discussed. The final section of the paper is the conclusion, which summarizes the academic and managerial implications, limitations, and further research opportunities.

2.1. The Knowledge Management Process

The knowledge management process model that is most commonly used is the SECI model of knowledge transfer [ 6 , 8 , 9 , 10 ]. This model, which was developed by researchers Nonaka and Takeuchi [ 10 ] through a study of Japanese manufacturing firms, proposes a spiral model through which knowledge is transformed between tacit and explicit knowledge. Tacit knowledge is that which is individual, contextual and difficult to formalize, instead passing between individuals or being learned through physical experience [ 11 ]. Explicit knowledge, on the other hand, is shared and formalized, typically written down for future use and transfer between individuals [ 11 ]. The SECI model proposes four processes of knowledge transformation, which are: socialization (transfer of tacit knowledge between individuals); externalization (transformation of tacit knowledge to explicit knowledge); combination (creation of new knowledge through integration of two streams of explicit knowledge); and internalization (the integration of explicit knowledge into the individual’s tacit knowledge) [ 6 , 8 , 9 , 10 ].

A key aspect of the knowledge management process is that knowledge is constructed through social interaction processes [ 12 ]. This research focuses on two specific knowledge construction processes. The first is knowledge creation, or social interaction intended to produce new knowledge (consistent with the Combination process of the SECI model) [ 13 ]. As Gourlay notes, the SECI definition of this process is problematic because it is limited to managerial interaction. Regardless, knowledge creation is central to organizational activities such as innovation [ 14 ]. Therefore, it is important for the organization’s strategy. The second process of knowledge construction considered here is knowledge transfer, which is the direct or indirect communication of knowledge from one individual to another [ 15 ]. Unlike knowledge creation, knowledge transfer is not inherently a competitive advantage, but it does create the possibility that knowledge may be applied more widely; thus, it can, if used effectively, also constitute a competitive advantage.

2.2. Knowledge Management in Family Firms

There are several conditions of family firms that influence the knowledge management process. One of these characteristics is that family firms, regardless of size, have some degree of nepotism (or favorable treatment of family members) [ 16 ]. The effects of nepotism are complicated. In cases of entitlement nepotism (hiring and preferential treatment regardless of capability), nepotism can threaten the performance and sustainability of the firm. However, reciprocal nepotism (creation of reciprocal networks of support and obligation) can actually benefit the firm and enable the transfer of tacit knowledge [ 16 ]. Another characteristic of knowledge management in family firms is that they are often bound to tradition to a greater extent than non-family firms [ 17 ]. This does offer the family firm the opportunity to create and transfer knowledge drawn from this tradition (which Magistretti et al. term ‘innovation through tradition’). However, it could also stymy knowledge creation and transfer due to change resistance, which can accumulate in tradition-bound firms [ 18 ]. Knowledge management in family firms is also strongly influenced by affective relationships and trust between the family members [ 19 ]. These affective bonds and trust, along with the family’s history, influence the extent to which knowledge transfer will be successful, because they have an effect on communication patterns. The internal relationships of the family also have an effect on family firm culture [ 20 ]. The culture of family firms is established internally through family leadership, but it is also influenced through the relationships and interactions of the family members themselves. Thus, knowledge sharing and knowledge management in general are influenced by family relationships, not only the intergenerational knowledge transfer between family members [ 20 ]. Thus, knowledge management may be different in family firms than in non-family firms, due to the entanglement and ‘familyness’ of the relationship of members of the organization.

Additionally, family firms of different sizes may have different knowledge management processes, due to differences in resources, capabilities and absorptive capacity. Small and medium-sized enterprises (SMEs) have resource constraints, including financial and knowledge capital constraints, that limit the extent to which they can use formal knowledge management processes [ 21 ]. This means that SMEs may rely on socialization processes (for example on-the-job training), which transfer tacit knowledge directly between individuals, rather than a more formalized process of knowledge externalization or combination. They may also rely heavily on external sources of knowledge, including informal and formal sources; for example, they may draw on community connections, make use of external training and experts, or exploit available knowledge from competitors, government agencies and other stakeholders. This contrasts to larger firms, where internal knowledge and innovation is viewed as a competitive advantage [ 21 ]. Organizational resources also have a direct effect on knowledge management process capability development, meaning that resource-constrained firms may struggle to make use of the knowledge they do have [ 22 ]. Small firms may have not just resource constraints, but constraints on absorptive capacity [ 23 ]. These absorptive capacity constraints are important because, as the research of Chaudhary and Batra shows, absorptive capacity is directly related to the firm’s entrepreneurial, market and technology orientations and, in turn, the firm’s financial performance. Thus, small firms, including family firms, have resource, capability and absorptive capacity constraints that mean that knowledge management and its effects are not the same for these firms as for larger firms. In response to this, the present study anticipates that knowledge management processes will be different in small and medium firms compared to large firms.

2.3. Succession in Family Firms

In family firms, succession can be the period in the firm’s lifecycle where managerial control and economic ownership of the firm are transferred to the younger generation, typically to a designated successor or successors who have been prepared for their new roles over a period of time [ 4 ]. The succession stage of the family firm’s lifecycle is what makes the firm a sustained family firm [ 3 ]. This period can be a time of considerable strain in the family firm, both because of the need to prepare the successor and because of the organizational and familial tensions that arise [ 24 ]. These tensions can cause resistance to transfer of power, as well as social and organizational issues [ 25 ]. If not effectively managed through the succession process, this can cause the firm to fail, either immediately or over time [ 26 ]. Thus, the knowledge creation and transfer processes used in the succession process are potentially critical for the effective firm succession.

This research uses Handler’s succession process model, which is a role-based model [ 24 , 27 ]. In this four-phase model, the roles of the predecessor and successor gradually change, with the successor taking on more power while their predecessor withdraws. To begin (pre-succession, or phase 1), the predecessor is the sole operator/leader of the company. In this stage, one or more potential successors has been identified and is undergoing education and preliminary training, but is not yet heavily involved with the business and plays no formal leadership role. Over time (training, or Phase 2), the chosen successor begins to undergo more formal training and act in a helper role, but does not yet hold real power in the organization. The predecessor takes on a ‘monarch’ role, with full control over decisions, while the successor acts as a ‘helper’. In the transition phase (or Phase 3), the successor takes on more power and responsibility, while still gaining more in-depth knowledge. The predecessor’s transition to an overseer and delegator role is paired with the transition of the successor to a managerial role, wielding some power but looking to the predecessor for overall decisions. The final stage of the succession process (Phase 4, or succession) is the transfer of organizational power and control to the successor, who now acts as the chief decision-maker. The predecessor then recedes into the background as an advisor or consultant to the successor [ 24 , 27 ]. Thus, this process is not just a gradual transfer of power and responsibility for decision-making, but also a process of successor learning, through which they are prepared for their eventual role.

2.4. Knowledge Management’s Role in the Succession Process

The succession period is a challenging time for knowledge management within the firm, because it is a time when knowledge may be lost due to ineffective transfer to the successor [ 28 ]. Bracci and Vagnoni proposed a theoretical model by which the required knowledge transfer and creation processes for effective succession were dependent on the successor, incumbent and organization characteristics. These knowledge transfer and creation processes are dependent on social connections between the successor and incumbent, as well as external and organizational processes [ 28 ]. Another key finding on knowledge management in the succession process is that effective knowledge management for succession can actually improve the organization’s knowledge creation and absorptive capacity [ 29 ]. Furthermore, knowledge management, particularly knowledge transfer, is essential for strategic renewal of the organization between generations [ 30 ]. Strategic renewal is a critical process in the family firm, as it allows the firm to maintain its relevance through multiple generations of leadership. The knowledge management process, through which existing knowledge is both passed on and transformed by newer generations, is one of the key processes by which the firm maintains its longevity [ 30 ].

Thus, these studies’ findings support the importance of knowledge management in the succession process.

There have been several studies which have investigated the knowledge transfer process in family firms and the role it plays in the succession process [ 31 , 32 , 33 , 34 , 35 ]. In one case, which featured a family-owned high-tech measurement solution manufacturer, the firm developed what the authors termed ‘idiosyncratic capabilities’ to overcome the boundaries and barriers to intergenerational knowledge transfer for succession [ 31 ]. A multiple case study identified the concept of ‘knowledge-creating human capital’, which is a tool for knowledge transfer to facilitate succession by the gradual development of the knowledge of individuals in the line of succession [ 32 ]. A third study noted a specific barrier, that of cross-generational bias, and explored how it influenced cross-generational knowledge flows and the impact this had on the succession process [ 33 ]. A theoretical review identified a range of factors that influenced knowledge transfer in the succession process of family firms including trust, commitment to the business, intergenerational and intragenerational relationships, and other factors [ 34 ]. Finally, a study identified the role of power in intergenerational knowledge transfers and how it affects the succession process [ 36 ]. These studies have identified several different knowledge creation and transfer processes, which could take place during the process of succession. These studies clearly show that knowledge creation and transfer processes are an inherent part of the succession process, and that knowledge transfer occurs throughout the process. However, one aspect of the literature which is missing is that few of these studies have clearly identified at what stage of the succession process these knowledge processes may take place. This was part of the model development process, which was undertaken to establish what kinds of activities took place and at what stage.

There are limits to the role of knowledge management in family firm succession. As one study points out, family firms cannot remain successful in the long term simply by passing down knowledge; knowledge transformation, or the development of innovation from existing knowledge, is one of the processes for long-term success of the family firm [ 33 ]. The implication for this study is that a simple transfer of knowledge is not enough to guarantee succession or the continued existence of the firm afterward. Furthermore, many firms do not make use of all possible resources for knowledge transfer, due to an emphasis on tradition rather than innovation and on ‘familyness’ rather than change over time [ 34 ]. Furthermore, family firms, especially smaller family firms, may not have a clear knowledge management process in place at all, which limits their potential for knowledge transfer in the succession process [ 34 ]. Moreover, there are broader organizational questions of trust and identity that will influence the organization’s behavior as a whole, for example in domains like environmental responsibility [ 35 ], financial performance and investment outcomes [ 37 ]. This means that for many family firms, there can be severe limitations on both the use of knowledge management in the firm and the use of knowledge management for succession. The model developed here does try to acknowledge these limitations, particularly taking into account the limitations due to the resources and capabilities that smaller firms face [ 34 ].

2.5. Theoretical Framework

The theoretical framework ( Figure 1 ) is based on Handler’s [ 24 , 27 ] model of family firm succession, along with the SECI model of knowledge transfer [ 8 , 10 ]. An additional set of possible knowledge creation and knowledge transfer processes is also incorporated, each of which has been identified as a possible process for succession management.

In summary, although there are disparate models that address the firm’s succession process [ 24 , 27 ] and knowledge management processes [ 8 , 10 ], there has not previously been an attempt to understand how knowledge management processes are used within the succession process. This research integrates the two models, along with knowledge creation and transfer processes identified as relevant to an effective succession in the family firm. This theoretical framework serves as the basis for a qualitative investigation of family firms in Thailand.

3. Methodology

The study used an exploratory, qualitative multiple case study design, which was intended to allow for the most possible elaboration and exploration of the process of succession and the role of knowledge transfer within it. Exploratory qualitative research is intended to investigate phenomena in significant detail, allowing for exactly this process of fine-grained analysis [ 38 ]. The multiple case study approach was selected because it allows for in-depth analysis of specific instances and comparison between them [ 39 ]. This information-rich, highly detailed and specific design was chosen in recognition of the significant gap in the research outlined above.

Analysis was at the individual level, including perspectives of recently appointed and prior firm leaders of Thai family firms. A total of 30 firms were included (10 each of small, medium and large firms depending on the official Thai definition of firm size [ 39 ]). All firms were family firms, defined as those where more than 50% of economic ownership and/or significant managerial control was assigned to members of a single family [ 3 ]. Furthermore, all firms had undergone a generational succession process in the top leadership role within the past five years. A summary of the firms and interviewees is provided in Table 1 .

Data was collected using semi-structured interviews, which allowed the researcher to combine conciseness with the opportunity to explore the succession process in more detail and leaving space for participants to provide new information and challenge assumptions [ 40 ]. Interviews were conducted with the current and prior leader of each firm (the successors and predecessors), for a total of 60 interviews. The interviews were recorded and then transcribed for analysis. In some firms, additional data was also collected through observation (work shadowing with successor leaders) and secondary data provided by the firm, for example summary financial statements. However, this supplementary data was not available for all firms.

Data analysis was conducted using the NVIVO computer-assisted qualitative data analysis software package. The coding was performed using an iterative approach. The initial codebook was generated from the existing literature on knowledge transfer and succession planning [ 41 ]. The interviews were then coded, with successor and predecessor interviews from each firm coded together in order of collection. New codes were added to the codebook as needed. The initial coding process continued to the point of theoretical saturation, where no new codes were identified during the process [ 41 ]. Following this point, the codebook was finalized. The interviews were then coded again in the same order, with the new codebook applied. The results were tabulated and a narrative interpretation of the findings was prepared. The final stage of analysis was the development of the succession model, in which the initial theoretical framework was adapted based on the findings of the research.

4.1. Knowledge Creation and Transfer Approaches

The interviews identified a total of 16 different knowledge creation and transfer approaches, through which the successors either received knowledge directly from their predecessors or other senior workers within the firm or developed it through social interaction and discovery. These processes (summarized in Table 2 ) were identified by other predecessors and successors as the most important aspects of the preparation process for succession. There were a few unusual approaches identified by only one or a few organizations (for example, self-led learning, as identified by one predecessor but not confirmed by their successor as relevant), but as these were uncommon and later analysis did not identify them as particularly important, they have been excluded from the overall model.

The frequency of these knowledge creation and transfer processes (also summarized in Table 2 ) varied somewhat, though there was some consistency in the processes used. There were a few approaches, including OJT, teamwork, supervising and coaching, which were used in all firms. Several others, including early involvement, education, mentoring, project work and problem solving, and stakeholder involvement were used in at least five of six firms. At least two of three firms used work experience, observation, internal training and strategic planning involvement. The least frequently used approaches included seminars and courses, apprenticeships, and studying manuals and procedures, which were used by more than half of the firms but less than two-thirds. Thus, although there is a high degree of similarity in knowledge creation and transfer processes, it is not entirely consistent between firms.

4.2. Knowledge Forms and Knowledge Processes

Following the identification of the knowledge creation and transfer processes above, the researcher investigated what forms of knowledge they were applied to (tacit or explicit knowledge) and which of the SECI knowledge transformation processes they were used within ( Table 3 ). This follows the SECI model of knowledge transformation and the relationship of tacit and explicit knowledge [ 8 , 10 ].

Each of these knowledge processes was configured differently. Processes that were oriented toward only tacit knowledge included observation, teamwork and stakeholder involvement, while explicit knowledge-oriented processes included education, seminars and courses, apprenticeship, studying manuals and procedures, and strategic planning. Processes that combined tacit and explicit knowledge in various ways included early involvement, work experience, mentoring, project work, internal training, OJT, supervising, and coaching. Thus, half of the approaches that were identified were associated with both tacit and explicit knowledge. Furthermore, as summarized in Table 3 , most of these processes could be associated with more than one of the SECI model’s knowledge transformation processes. Only observation, seminars and courses, teamwork and stakeholder involvement seemed to be aligned to only one of these processes. From this analysis, it is possible to see that the knowledge creation and transfer processes used in succession planning and preparation do not serve only a single purpose. Instead, there is a dynamic interaction between tacit and explicit knowledge for many of them, and this dynamic interaction enables more than one kind of knowledge transformation.

4.3. Knowledge Processes across the Succession Phases

Following the analysis of the knowledge processes based on the SECI model above, the next stage was to investigate how these knowledge processes occurred across the phases of succession. Handler’s succession framework has four stages, including pre-succession, training, transition and succession [ 24 , 27 ]. This framework was used as the basis for the interviews. However, while participants clearly identified the pre-succession and succession phases of transition, there was no clear differentiation between the training and transition phases. Instead, this was viewed by participants as one long stage of preparation and training, during which the successor gradually took over more responsibility from their predecessor. Thus, the analysis of knowledge creation and transfer processes followed the insight of the participants, collapsing phases 2 and 3 of Handler’s succession framework into a single Transition phase [ 24 , 27 ]. Table 4 summarizes the knowledge processes used across these three succession phases.

In Phase 1 (Pre-transition), there were several activities that more than half of respondents identified, including early involvement (91.7% of firms), education (88.3%), work experience (78.3%), mentoring (91.7%), apprenticeship (60%), internal training (56.7%), OJT (58.3%), teamwork (83.3%), supervising (71.7%) and coaching (76.7%). Thus, during this phase, there is already active participation of the successor, including involvement in the company’s activities and work live. However, there are some important differences between this phase and later phases. For example, the successors’ role in activities like mentoring, teamwork, and coaching were more likely to be as a follower, coached employee or mentee rather than in the leadership role. For example, 13P entered the company as an ordinary team member, with her mother acting as her supervisor, a role she reprised for her son. It was also common at this stage for employees to undergo training, including formal training and OJT, as part of the company’s ordinary training process before moving onto a team as a normal worker, rather than immediately taking on a powerful role in the company. Thus, during the Pre-transition phase, while the successor is already taking part in formal knowledge creation and transfer activities and playing a role in the company, they do not yet have a role of power or control within the organization. This indicates that, rather than using entitlement nepotism to hire potential successors into roles they are not yet prepared for, most of the firms are actually using reciprocal nepotism, with successors using the pre-transition time to form social relationships and create networks of support and obligation that assist in their knowledge creation and transfer [ 16 ]. Thus, even though a family firm is by nature nepotistic, it appears that, at least for successful firms, simply assigning successors roles of responsibility at an early stage does not occur.

Phase 2 (Transition) is marked by a transition away from some of the activities of Phase 1, while in others the successor takes on more senior roles. Activities including early involvement, education, and work experience are no longer part of the training process. However, activities like observation (66.7% of firms), mentoring (96.7%), studying manuals and procedures (73.3%), project work (85%), internal training (73.3%), OJT (100%), teamwork (100%), stakeholder involvement (91.7%), supervising (100%), coaching (100%) and strategic planning involvement (66.7%) are now commonly used by successors to create and transfer knowledge. In some cases, these activities continue as before. For example, internal training and studying manuals and procedures may be used by successors to better understand the company’s activities, including roles they have not worked in previously. In other cases, the knowledge creation and transfer activities are changing during this phase. Successors take on supervisory roles, rather than being supervised, and are more likely to act as mentors and coaches for junior employees rather than being coached and mentored. They are also more likely to take on leadership roles, such as teamwork and leading projects and problem-solving activities. However, they also still continue to have knowledge transferred to them by their senior mentors and predecessors. For example, 17S reported that, as he began to meet with customers, his parents mentored him, passing on tacit knowledge about the customers and their previous experiences with them. Thus, even though they are taking on senior roles, they are still learning through a process of social interaction.

At this stage, the successors also become much more involved in activities that involve social interactions with external organizational partners, for example being involved with stakeholder management activities and strategic planning activities. Thus, this is a long stage that is poorly differentiated, but which does involve a gradual process of both accumulation of power and responsibility [ 24 , 27 ] and changes in the knowledge creation and leadership processes.

In Phase 3 (Succession), successors are still engaged in knowledge creation and transfer processes to some extent. Most of the successors and predecessors reported that mentorship relationships continued into this stage (96.7%), consistent with the role of the predecessor in the succession framework [ 24 , 27 ]. Teamwork (58.3%) and stakeholder involvement (70%) were still commonplace activities as well. In the other common activities, including supervising (100%) and strategic planning (80%), successors were more likely to engage in supervision and leadership roles. However, they were still engaging with both followers and their predecessors, who continued to provide useful knowledge, especially tacit knowledge about business partners and strategy. Thus, while the Successor phase seems to be a less intense period of learning, it remains a period of learning and knowledge transfer.

4.4. Knowledge Processes in Different Firm Sizes

The final aspect of development for the knowledge process model for succession was an investigation of how knowledge processes were different in firms of different sizes. The frequency of knowledge processes in firms of different sizes is summarized in Table 5 . While about half the knowledge processes were common among firms of all sizes, there was one process more common in small firms and seven that were more common in medium and large firms.

4.5. Knowledge Process Model of Family Firm Succession

The final stage of the research was to develop a knowledge process model of family firm succession ( Figure 2 ), taking into account the knowledge processes identified, the phases during which these processes occur, and the differences between small, medium and large firms. The model developed includes the activities reported by at least 75% of participants, either all participants (the shared knowledge processes) or within a firm size category (the firm size-dependent knowledge processes). The derived process model addresses, therefore, two dimensions of the ba or knowledge context [ 6 ]: the firm size, which affects both the internal knowledge processes of the firm and its resource and capacity constraints; and the stage of succession, which affects the knowledge processes and capabilities of the successor. As the model also shows, the SECI processes occur throughout all three stages of the succession process; thus, there is little sense that any particular process predominates at any given stage, although explicit knowledge processes are more common in Phases 1 and 2.

This model is a preliminary model and designed for further research into the knowledge creation and transfer processes that occur in the family firm succession process. The next steps for the development of the research model is a broader application to investigate knowledge creation and transfer in other conditions, including outside the initial sample, for failed or difficult succession processes, and in cross-cultural contexts (including different countries and different Thai cultures).

4.6. Discussion

There are some implications of the literature for the model as developed here. One of these implications is that relationships within the family surround and influence the processes here. For example, the nepotism-based relationships of the family firm [ 16 ] may mean that planned or potential successors have access to training opportunities that do not ordinarily exist. An example is the early involvement of planned successors in the operations of small family firms, which would not be available to non-family members. These positions may be driven partly by tradition, which holds greater sway than it does in non-family firms [ 17 ]. At the same time, the relationships of trust and affective bonds between family members will also influence the extent to which individuals have access to these training opportunities [ 19 , 20 ]. Successors and predecessors who have strong bonds of trust and affection may, therefore, be more effective at transferring knowledge than those whose relationship is less close. There are also other issues that could influence outcomes, including intergenerational biases, commitment to the organization and its success, and flows of power [ 33 , 34 , 35 ]. Therefore, the processes of succession can be expected to look different from firm to firm, and between generations within the same firm. There may also be competing tensions, for example the effect of tradition, which can limit innovation [ 18 ] against the demand for strategic renewal [ 30 ]. While firms may develop ways around these tensions to ensure effective knowledge transfer in any case [ 31 , 32 ], this is not guaranteed.

5.1. Academic Implications

The academic contribution of this research lies in its integrated process model of knowledge creation and transfer for the succession process. This model, which incorporated the concepts of the SECI model along with the succession phase model of the family firm’s lifecycle and the firm size and knowledge processes identified within the research, is a novel approach to understanding knowledge creation and knowledge transfer during the succession process. The key insight of the model is that knowledge transfer for succession in the family firm is not a one-time event. Instead, it is a continual process in which the successor’s knowledge gradually becomes more specific and more focused on higher-end issues such as leadership and strategy. Furthermore, the different resources and constraints in firms of different sizes means their knowledge process is different throughout the succession lifecycle. Thus, it is not possible to speak of knowledge processes for succession as a single set of practices—instead, these practices are heavily dependent on the organizational environment and context. This model offers other researchers a tool for understanding knowledge transfer throughout the lifecycle of the family firm, as well as insight into what kinds of processes may be used.

5.2. Managerial Implications

This research has some key findings that are relevant to knowledge creation and transfer processes in the family firm succession process, and which can be used to improve the management succession planning for the firm. First, the research has revealed that the knowledge creation and transfer processes of the family firm’s succession span the length of the succession process, beginning long before the chosen successor takes the reins and continuing after their formal succession period. This implies that the succession process should not only consider knowledge transfer at the point where a successor is named, but instead potential candidates should be included in knowledge transfer well before this point. Furthermore, the 16 knowledge processes identified are not used indiscriminately throughout the succession process. Instead, the pre-succession stage is characterized by external, formal learning processes and experience- and knowledge-building activities such as early firm experience. During and after the succession process, knowledge becomes more internal to the firm, and, to an extent less formalized, the chosen successor also begins to gain knowledge through formal involvement in the firm’s strategy, planning and operations, rather than through external learning. Thus, the candidates for succession should all undergo the initial, formal training process.

This research also revealed that that firms of different sizes have different succession knowledge processes. Successors in small firms, with their informal knowledge processes and resource constraints, rely heavily on external activities like apprenticeships but, conversely, may be less driven to formal education and training. In large firms, where there are more resources but, simultaneously, more demands on the successor, formal education and training is prevalent. Medium-sized firms fall in the middle, with some processes more in common with small firms and others consistent with large firms. Thus, while knowledge creation and transfer is part of the succession process for firms of all sizes, exactly how this takes place depends on the firm size, which is a proxy for resources and internal process formalization. Therefore, there is no one-size-fits-all solution for knowledge transfer within the succession process, and firms need to make choices that effectively prepare potential successors within the resources available to the firm.

5.3. Limitations

There are some limitations to this research, which suggest opportunities for further research. One of these limitations is that the extent of cross-cultural generalizability of the knowledge process succession model is unclear. Family firm succession processes do vary widely between cultures, and there are known issues in generalizability of the SECI model, especially as it relates to tacit knowledge and its transformation. Given these empirical and theoretical differences, it is possible that the research model may not generalize to all cultures. The second limitation is that the study only drew on the success cases of intergenerational transfer—failure cases were not investigated. Thus, it is unknown whether the factors identified are characteristic of success and not failure, or whether some or all of these conditions may also be in place in failed successions.

5.4. Opportunities for Further Research

There are several opportunities for further research that can be suggested, given the limitations of the current study. The issue of cross-cultural generalization of the findings can be addressed by cross-cultural model testing, in which the derived model is applied to firms in different cultures and explicitly investigated in relation to cultural differences. To address the limitation of positive bias, which occurred because this study only addressed success cases, it would be appropriate to incorporate failure cases, either through an extended case study or by including firms that failed in the transition period in a broader survey of family firms, when testing the model.

Author Contributions

Conceptualization, K.P. and V.V.R.; Data curation, K.P. and V.V.R.; Formal analysis, K.P. and V.V.R.; Investigation, K.P. and V.V.R.; Methodology, K.P. and V.V.R.; Project administration, K.P. and V.V.R.; Supervision, V.V.R.; Writing—original draft, K.P. and V.V.R. All authors have read and agreed to the published version of the manuscript.

Funding

This research was funded by The Royal Golden Jubilee Ph.D. Programme grant number [PHD/0075/2558].

Conflicts of Interest

The authors declare no conflict of interest.