The Revelation of a Trade-Off: A Case Study of CEO succession in a Swedish Family Firm

Abstract: This case study explores the presence of a competence trade-off contingent on company needs when choosing a CEO successor in a family firm. This is done through the guidance of our research question: What is the trade-off between formal and cultural competence in a family firm when choosing a CEO successor?Our purpose is to contribute to the literature by building further on findings that challenge the traditional understanding of CEO succession in family firms. The research was conducted using a qualitative method in the context of the Swedish family firm, Lyko Group AB. The primary data was collected through six semi-structured interviews with former and current board members of the firm. Three different CEO transitions are isolated, analyzed, and thematically categorized in a chronological manner, using theory and previous research. Our findings illuminate the importance of incorporating cultural competence in the analysis of CEO succession through the force of example. The findings fortify existing research challenging the dominant view on professional management. Further, the study extends the understanding of CEO succession in family firms by emphasizing the sociocultural dynamics.