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Most businesses that have grown into large or well-established entities started as family businesses. Family owned businesses contribute immensely to sustainable economic growth and development (Abdulla, Hamid and Hassim as cited in Nyamwanza et al. 2018, p. 32). However, according to the International Finance Corporation (2018) only 5% to 15% of family owned businesses continue into the third generation in the hands of descendants of founders. This speaks variations in intergenerational leadership in family businesses whereby after the death of the founder member the leadership focus will change significantly.
Researchers in the family business area acknowledge that leadership is integral to the successful operation of such businesses, (Doraiswamy, 2012 & Van der Westhuizen, 2014). Mujani et al (2012) highlighted the importance of having strong leaders to shape a civilized and competitive society in this era of boundary-less world. Kyagera (2013) further highlighted that leadership is at the heart of any organization and thus it determines the success or failure of an organization. Mujani et al. (2012) defined leadership as the process of influencing human conduct or behavior to achieve organizational tasks. To illustrate this influence, Kyagera (2013) sees leadership as a way of changing the minds of others so as to accomplish organizational goals. Influencing the behaviors of people in a family set up appears to be a complex task as compared to leading in non-family businesses.
Family businesses are unique given the family’s involvement in governance, ownership, management and setting vision or the strategic direction, (Rautiainen & Ikävalko, 2012). This involvement leads to what Tagiuiri and Davis (1996) called “Bivalent Attributes.” Tagiuiri and Davies (1996) advised that the success or failure of family firms will depend on how well the aforementioned attributes are managed. This summarizes the importance of leadership in family firms. In Rautiainen & Ikävalko’s (2012) views, these attributes are known as familiness which is defined as the resources and capabilities which come as a result of family involvement and interactions. Thus familiness can lead to systematic synergies which have the potential to create both advantages and disadvantages for the family firm. Fries et al. (2020) argued that a family firm has a lot of idiosyncrasies that originate from the interaction of family and the firm. Fries et al (2020) goes on to say such characteristics differentiate family firms from non-family firms and determine the leadership styles to be adopted and possibly, leadership practices.
Leaders across the world face a plethora of challenges. However, the challenge of this role is unique in a family context, (Nicholson & Björnberg, 2005). A leader in the family firm is supposed be a conduit for innovation, protector of culture and the focus of vision and values. Gomez-Mejia et al. (2011) weighed in and said family business leadership is different from that in other entities given the emotional consideration that is mainly emphasized by leaders in such firms. The leader is thus expected to balance the needs of the firm and family relationships. This is a mammoth task that has to be achieved at all costs by a leader in such firms. This has led to adoption of a plethora of leadership practices by family business leaders in an effort to achieve primary goals of such families