The influence of corporate governance on succession planning and organizational performance in Chinese family firms
Abstract
Purpose
This study examines the impact of corporate governance on succession planning and organizational performance. Drawing on agency theory, the main purpose of this study is to identify the effect of corporate governance on succession planning by measuring the different characteristics of the board of directors.
Design/methodology/approach
This multi-quantitative research used primary and archival data. A total of 281 valid questionnaires were collected from Chinese listed family firms to gauge succession planning. Relevant archival data were obtained to measure board characteristics and organizational performance. All hypotheses were examined through structural equation modeling.
Findings
The outcomes indicate that corporate governance positively influences succession planning and, in turn, boosts superior organizational performance, which uncovers the mediating effect of succession planning on the relationship between corporate governance and organizational performance. Our findings reveal that board independence and education facilitate the development of succession planning, which is crucial in the family business’s life cycle.
Originality/value
The results of this study contribute to management succession, strategic management and leadership research by demonstrating how corporate governance fosters organizational performance through succession planning, thereby expanding the application scenarios of agency theory in family firms. Additionally, the article also enriches our understanding of how family businesses apply sound governance structures to promote organizational strategic decision-making during the succession process.
Keywords
Acknowledgements
We would like to deliver our sincere gratitude to Editor-in-Chief Dr Brandon Randolph-Seng, Associate Editor Dr Marwan Al-Shammari, and two anonymous reviewers who have provided such insightful and constructive comments and suggestions to our manuscript. We appreciate the proofreading services by Editage that polished the language of our manuscript. All the participants, contributors, and supporters of this manuscript are also highly appreciated.
Citation
Li, Z., Mustapha, M., Sheikh Hassan, A.F. and Saidin, S.F. (2024), "The influence of corporate governance on succession planning and organizational performance in Chinese family firms", Management Decision, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MD-02-2024-0412
Publisher
:Emerald Publishing Limited
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