The combined effect of succession planning, succession timing and successor commitment on corporate growth strategy among local family businesses in the manufacturing sector in Nairobi County.
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The dilemma of management succession is considered a potential source of danger and conflict in family businesses. The continued existence and growth of family businesses is important and their growth depends on effective management succession and the growth strategies that they adopt overtime. The generally accepted figure for succession is 3 out of 10 surviving to second generation and 16% to the third. Statistics in Kenya show that 3 out of 5 businesses fail within the first three years of operation. It is estimated that approximately half of all family businesses fail to make it to the next generation because of inefficient succession and those that survive 3 to 4 generations have a complex web of structures, agreements, councils and forms of accountability to manage their wealth. Management succession is a double-edged sword where on one hand the successor may encourage strategic initiatives that move the business to a higher level or stifle the growth of the business by having no strategies in place. It is therefore important that family businesses plan the succession on time and ensure the successor is committed to the growth of the organization. This study sought to establish the combined effect of succession planning, succession timing and successor commitment on corporate growth strategy in local family businesses in the manufacturing sector in Nairobi County.