History Matters : How path dependence in the family business influence succession planning - A case study

Abstract: Background: Family businesses are a complex, overlapping system of business, ownership, and family, which contribute between 70 to 90 percent of the World’s economy. Family businesses do however struggle to survive over generations, to which only 30 percent makes it to the second generation, emphasizing the need for further research within this field, in order to increase the survival rate and positively affect the World’s economy. Purpose: To fill the research gap within succession in family businesses, by investigating the phenomenon of succession planning and how history matters, through the use of the path dependence framework. For this, we are analyzing the second generational Swedish family business, Holtab, which have undergone a conflicted succession in the past and now are planning for the next succession, to which we seek to answer, “How does path dependence influence succession in family businesses?”. Method: Qualitative, single case study with a relativistic ontology and a social constructionism epistemology to showcase how actors construct their realities, which follows an interpretivist philosophy. We follow abductive reasoning with an explorative research strategy to investigate the theory of path dependence, applied to the Swedish family business named Holtab.            Data was collected through in-depth interviews, both semi-structured and unstructured with open-ended questions. Conclusion: Our findings, with the framework of path dependence, clearly show that history matters, as the acknowledgment of it triggered the process of professionalization at Holtab and set a focus for a planned, well-thought succession process, in order to learn and build on the mistakes of the past [history].