KNOWLEDGE MANAGEMENT PRACTICES AND SUCCESSION PLANNING OF FAMILY BUSINESS CONTINUITY IN LAGOS STATE, NIGERIA
Knowledge management practices and succession planning have gained much prominence in recent years and are said to improve organizational performance and continuity of family businesses. Context observations have indicated that family businesses are common in Nigeria and their going concern has generated academic debate and public discourse. Nevertheless, the factors orchestrating their continuity are divergent and geographically diverse. Ownership dilution; transfer of both leadership and ownership tend to be seen as a phase in the company’s life cycle, which form a part of managing continuity but less practiced by SMEs’ owner/managers. This stems out from owners’ emotional attachment or connection with the business and thus transfers are often very problematic, challenging or not considered at all as evidences suggest only 30 per cent of family businesses survive their founder. One of the major issue to which this can be attributed to is the rarity in proper knowledge management practice and heritage struggle due to lack of or poor succession planning.
This study adopted survey research design. Target population comprised 503 of selected SMEs operating in Lagos State and Yamane sample size method was adopted. Data was collected through the use of validated questionnaire adapted and validated for the study. The Cronbach’s alpha coefficient for the constructs ranges between 0.850, 0.851 and 0.775. The response rate was 93.2%. The data were analyzed using descriptive and inferential (Pearson Product moment correlation and regression analysis) statistics.
The analysis of the data revealed that Knowledge management practices had significant influence on family business continuity in Lagos State (R2=.493, F(6, 467) = 24.735; p<0.05); Succession Planning had significant effect on business continuity (R2=.538, F(7, 460) =78.821; p<0.05); knowledge management practices had significant effect on profitability of family business (R2=.614, F(6, 461)= 125.006); p<0.05); Knowledge management practices significantly influenced Growth of Family Business (R2=.252, F(6, 461)= 27.167; p<0.05); and Knowledge Management Practices jointly affected Family Business Continuity (R2=.193, F(1, 466)= 112.948; p<0.05).
The study concluded that knowledge management practices, family values, governance and founder’s influence are pertinent to enhance family business continuity. The study recommended that for family businesses to continue to survive, succession planning should be put into a strategic plan and consideration so that a successor has an adequate capability and knowledge of the family business.
Keywords: Knowledge management practices, Succession planning, Family business continuity, Length of time, Lagos State.