To Join or Not to Join? Understanding the Succession Intentions of Next-generation Family Business Members

DCU NCFB's report, 'To join or not to join? Understanding the succession intentions of next-generation family business members', explores the aspirations of next-generation family business members across the island of Ireland.
Dr Eric Clinton

Dr Eric Clinton, NCFB Director

Dr Eric Clinton, Director NCFB

Family businesses are the dominant form of organisation worldwide. They constitute the majority of businesses in the Irish and Northern Irish economies, and like all businesses, they must future-proof themselves by adapting to ever-changing operating environments and consumer demands.  Although the competitive landscape is increasingly challenging, Irish family businesses continue to integrate themselves competitively and innovatively in national and international markets.

We have witnessed their astonishing resilience in seeing off the global financial crisis, remaining steady in the face of the Covid-19 pandemic and adapting to the energy dilemma. Moreover, they contribute to significant philanthropic and social aims across the island of Ireland.

Family businesses are not footloose; they are embedded in local communities, employ local people, source local produce and service local markets. As a society we can learn a lot from Germany, where the economic engine of the economy is fuelled by family businesses in the Mittelstand region and government policy encourages ownership transition while actively promoting entrepreneurship across generations. 

Key to family businesses’ longevity and transgenerational survival is an effective succession process; yet, when family and work dynamics combine, family businesses face distinct succession-led challenges: leadership planning, nurturing family talent, family governance, and the integration of non-family executives. Choosing the most qualified successor is an essential part of handling this complex uncertainty, but global studies suggest that succession intentions among next-generation members are low, creating a ‘succession crisis’. 

Following a conversation among colleagues in Dublin City University’s National Centre for Family Business (NCFB) and at Ulster University, University College Cork and the University of Limerick, a partnership was formed to conduct an all-island study to test the factual basis that there is a succession crisis across the island of Ireland. 

We found that succession aspirations are healthy across the island of Ireland, and the shaping of next-generation intentions regarding educational choices, sustainability, emotional well-being and socio-emotional wealth has a vital role to play in the realisation of these aspirations. 

“I would like to thank all the next-generation members who participated in our study, especially those who volunteered their family business profiles for this report. Thank you also to our sponsor, AIB . We hope the evidence-based and theory-driven recommendations in this report will provide practical steps and tools for family businesses managing succession planning for years to come."

Prof Dominic Elliott

Professor Dominic Elliott, Dean DCU Business School

Professor Dominic Elliott, Dean DCU Business School

Looking towards 2030 and beyond, Irish businesses must address the interlocking challenges of transitioning to a low-carbon economy, embracing digital transformation, and absorbing external shocks and higher operational costs resulting from global insecurity.

Given their continued prominence in the Irish economy, family businesses will have a leading economic role to play in remaining strong when faced with the financial uncertainties and unexpected shocks that these trends will bring. 

The NCFB led this timely all-island university partnership, recruiting almost 400 next-generation family business university students to give the pursuit of succession a contemporary voice. This report reveals the drivers and inhibitors of next-generation succession intentions. This is connected to sustainability in a climate crisis context, and sheds new light on how these intentions interact with attachment and commitment, trust, well-being and family businesses’ socio-emotional wealth. More than half of the respondents were young women presenting a unique opportunity to understand more about the generational shift for young women in purpose and influence. As well as learning about the forces shaping next-generation succession intentions, the findings provide unique insight into the new phenomenon of transgenerational entrepreneurship – a key area of strength for the Dublin City University (DCU) Business School. 

It has been our privilege to work with these families and students. The cutting-edge research produced will deliver key insights for higher-education institutions and businesses through tailored educational programmes, and co-create actionable insights that will sustain and develop Irish family businesses into the future. Finally, I want to thank the students sincerely for their commitment and enthusiasm in sharing their aspirations, and to wish them continued success in their future family business endeavours.