Succession versus harvest in family businesses: The role of passion and family involvement in exit strategies

Abstract

Through this research, I investigate the influence of leadership passion and family involvement on family businesses’ exit strategies (succession versus harvest). I execute two studies to do this: 1) a survey of 118 family business family managers, and 2) a survey of 33 private equity/investment professionals who acquire family businesses. In Study 1, I analyze how family leadership passion influences firms’ strategic choices toward succession versus harvesting. I also investigate whether family involvement in firms moderates the relationship between leadership passion and exit strategy. In Study 2, I use a postdictive survey to uncover how private equity investors view the value of leadership passion and family involvement in their intent to invest in family firms.