The nexus of aging in family businesses: Decision-making models on preferring a suitable successor

Abstract

Purpose: The purpose of this paper is to elaborate on the preferences of parent founders within family businesses in selecting a suitable successor with the increase in life expectancy. Design/methodology/approach: The study presents alternative decision-making preference models of a suitable succession for parent founders based on the models of microeconomic theory in the context of family businesses. Findings: The theories and models of economics in the current study illustrate that the increase in the life expectancy of the parent founders with their decisions toward the preference of a suitable successor under the age constraint may restrict the sustainability of their family businesses. As a result the opportunity cost theory appears as to be at the ahead of the other theories in microeconomics in order to support the decision making of parent founders on selecting the suitable successor for the future of the family business. Research limitations/implications: The paper illustrates the models on the preferences of the parent founder for the future of the family businesses with their perception toward the increase in overall life expectancy. The current study is limited to the perspectives of founder entrepreneurs toward an effective succession decision. Future research may consider the perspectives of in-family as well as non-family successors. Originality/value: In the light of alternative preference decision-making models for parent founders for choosing a suitable successor under the age constraint this study will make a noteworthy contribution to the sustainable growth of their family businesses. The approach of this study through the microeconomics not only methodologically contributes to the body of knowledge in aging and employment in general but also to the intergenerational relationships of parent founders especially their succession-related plans at their early stages of career. © 2021 Elsevier B.V. All rights reserved.