Leadership Transfer and the Successors Preparation in Bulgarian Family Enterprises

Abstract

Summary:

Leadership transfer is a key component of succession in family business. For example, if the leader of the family business does not intend or is not ready to transfer the control of the business to the next generation, no positive results from the transition process could possibly be achieved. In many cases the current leader does not see the need for succession as a priority, which causes a number of problems such as the extension of the transfer, the discouragement of the potential successors, tension among staff, and other problems. On the other hand, leadership transfer depends on the presence of motivated successors. Moreover, the lack of an adequate preparation of the successors may negatively impact the smooth transition process and thus call into question the future of the family business.

Concerning business succession in Bulgarian family enterprises, the families declare as their priority passing into the hands of the next generation stronger and more competitive business. However, the youth of the entrepreneurship in Bulgaria, the lack of family business tradition, and insufficient support from both the public organizations and NGOs hinders the survival and succession of family businesses. Moreover, Bulgarian family firms are managed mainly by the first generation of family entrepreneurs, therefore just now the issue of transfer of business to the next family generation appears. In this regard the article explores and analyses the process of leadership transfer, including the preparation of successors in Bulgarian family enterprises. Acquiring better knowledge of the process of leadership transfer, of its features and problems may form the basis necessary for improving the management of the process and succession outcomes as a whole.