International Small Business Journal

http://isb.sagepub.com Leadership Succession in Owner-Managed Firms through the Lens of Extraversion

Eleni T. Stavrou International Small Business Journal 2003; 21; 331 DOI: 10.1177/02662426030213005 The online version of this article can be found at: http://isb.sagepub.com/cgi/content/abstract/21/3/331

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Research Note
International Small Business Journal Copyright 2003 SAGE Publications (London, Thousand Oaks and New Delhi) [02662426 (200308)21:3; 331347; 034199] Vol 21(3): 331347

i s b j

Leadership Succession in Ownermanaged Firms through the Lens of Extraversion

E L E N I T. S TAV RO U
University of Cyprus, Cyprus Succession in owner-managed rms is rarely planned. Furthermore, it rarely occurs during the lifetime of the owner-manager. Even when it does, it is often ineffective. Although the literature cites various explanations as to the problems associated with succession in owner-managed rms, these explanations lack a coherent and encompassing theory to explain its dynamics. The author proposes that the issue of succession in ownermanaged rms be viewed under the prism of extraversion, a psychological attitude that may help clarify successions most fundamental features and explain the factors underlying its process. K E Y WO R D S : extraversion; owner-managed rms; succession

Introduction
Leadership succession is not a simple step but rather a complex, diachronic process (Gilmore, 1988; Sharma et al., 2001; Vancil, 1987). According to Kesner and Sebora (1984), succession affects not only members of the organization but the rms economic and political climate as well. Moreover, succession is an important process since organizations are a reection of their top managers and the decisions they make (Birley, 2002; Chaganti and Sambharya, 1987; Hambrick and Mason, 1984). Its importance stems from the fact that the successor will ultimately be both responsible and accountable for action on and reaction to an organizations strategy and performance (Dalton and Kesner, 1983; Stavrou and Swiercz, 1998). Finally, succession is important in ensuring a continuation of effective managerial control and involvement in an organization (Mancuso, 1990). Succession has long been the subject of interdisciplinary research (Sharma et al., 2001; Zajac and Westphal, 1996). Traditionally, this subject has been studied from ve points of view. One involves the economic factors leading to succession (Boeker, 1992; Harrison et al., 1988), a second focuses on behavioural elements, while a third involves the implications of succession for the organization (Beatty 331
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International Small Business Journal 21(3) and Zajak, 1987; Shepherd and Zacharakis, 2000). A fourth point of view examined the attributes of the organizational leader and a fth the origin of the leaders (Michel and Hambrick, 1992; Zajac and Westphal, 1996). In addition to the different points of view from which research on leadership succession has focused, researchers also have explored the succession issue in different types of organizations. These organizations range from non-prot (Alexander and Lee, 1996; Farquhar, 1994), to those that are large and publicly held (White et al., 1997), to small and entrepreneurial rms (Fox et al., 1996; Peay and Dyer, 1989), to family-owned businesses (Rubenson and Gupta, 1996; Davis and Harveston, 1998). Among publicly held organizations or in the non-prot sector, leadership succession is instigated often by poor organizational performance, environmental change, the incumbents decision to depart or the incumbents wrongdoing (Boeker and Goodstein, 1991; Farquhar, 1994; Friedman and Singh, 1989). In such organizations, the date on which the CEO is to be replaced is usually agreed in advance (Fox et al., 1996) and formalized guidelines for succession exist, making the process more a function of utility and rational decision-making (Davis and Harveston, 1998). In many owner-managed rms however, whether entrepreneurial or familyowned, leadership succession is rarely planned (Davis and Harveston, 1998; Rubenson and Gupta, 1996) and rarely occurs effectively, especially during the lifetime of the founder (Alcorn, 1982; Fox et al., 1996). To illustrate, McEachern (1975) cites that top executives of owner-managed rms have tenures three times those of the top executives of rms that are controlled by professional managers. Also, Molokotos (1991) notes that leadership takes 2530 years to change in owner-managed rms while it takes less than 20 years, usually 7, in publicly held ones. Such transitions, which often prove ineffective, tend to coincide with the founder-managers tenure, after which most owner-managed rms do not survive (Lansberg, 1988; Rosenblatt et al., 1985; Stavrou and Swiercz, 1998). Nevertheless, owner-managed rms constitute the majority of businesses worldwide and contribute substantially to local and national economies around the world (Davis and Harveston, 1998; Stavrou and Swiercz, 1998). Given the above discussion, the question is why succession and its planning are rare phenomena in owner-managed rms. Furthermore, when succession does take place in these rms, why it is often ineffective. Many researchers have focused on these queries and provided many reasons (Dyer, 1986; Kets de Vries, 1985; Sharma et al., 2001; Ward, 1987; Welsch, 1993; White et al., 1997). Close examination of this research points towards the need for a coherent and encompassing theory to diagnose the dynamics behind the various reasons provided in the literature and to explain the essence of the succession issue in ownermanaged rms. One such theory involves the underlying Jungian psychological attitude. Psychological attitude, different from a social attitude, may be dened as the readiness to act in a certain way, regardless of whether this readiness is conscious or unconscious (Jung, 1999: 414). According to Jung (1999), ones habitual attitude denes and orients ones whole psychology even in its most fundamental 332
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Stavrou: Succession in Owner-managed Firms features; it is the result of all the factors that exert a decisive inuence on ones being. Jung (1976) dened two opposite types of psychological attitude, namely extraversion and introversion, which characterize all human behaviour. Most often, one of the two attitude types is dominant in ones behaviour and actions. The introverted attitude involves an inward turning of psychic energy, where primary importance is placed upon ones internal values and needs. The extraverted attitude involves an outward turning of psychic energy, where such energy is diverted to a source outside ones self. Therefore, the extraverted type places primary importance on the outside sources values and beliefs over ones own (Jung, 1987; Briggs and McCaulley, 1989; Fiest and Fiest, 1998). Jung (1999) referred to oneself as the subject and sources outside oneself, regardless of whether human or not, as objects. In the literature so far, the above terms have been used to explain human behaviour. In the present study, I use these terms to explain the behaviour of the owner-managed rm during succession. I treat the owner-managed rm and, in turn, the owning family as two living systems that exist in and depend on each other and their wider environment for the satisfaction of various needs (Morgan, 1997). According to this study, personifying the owner-managed business as the subject and examining its habitual attitude towards succession may help clarify its most fundamental features and explain the factors underlying its process. Specically, I propose that the owner-managed business demonstrates an extraverted attitude during succession.1 In other words, the author claims that when it comes to leadership succession, the business (the subject) places primary importance on the values and beliefs of an outside source, namely the family (the object) over its own needs. Where business and family needs coincide, this attitude does not pose a threat to the well-being of the business. However, business and family needs are usually different (Birley, 2002; Stavrou and Swiercz, 1998) and by adhering to family needs during succession, the business puts its survival into jeopardy. Even though entrepreneurs, business owners and other types of managers have been the subjects of investigation from different psychological perspectives (Brown and Coverley, 1999; McHugh and Brennan, 1993; Moran, 1998; Morrison, 1997; Ward, 1993), the use of psychological approaches to the understanding of succession among owner-managed firms has been overlooked. Other psychological approaches, different from extraversion, could possibly be useful to examining the succession process depending on the focus of the investigation. To illustrate, one such approach is external versus internal locus of control. One could make the argument that owner-managed firms have an external versus an internal locus of control during the succession process. According to Morrison (1997), locus of control is characterized by the tendency to attribute cause or control of events to internal (i.e. ability and effort) or external (i.e. luck, task difficulty) causes. To take this argument one step further, internal locus of control has been associated with action while external locus of control has been associated with passivity or reaction (Ward, 1993). 333
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International Small Business Journal 21(3) Those with an internal locus of control are proactive, seeking out opportunities. On the contrary, those with an external locus of control believe that much in their environment, and in turn their capacity to influence it, is beyond their control. However, in the case of succession among owner-managed firms as explored in the present study, action or reaction, even though relevant, is not the main issue because the focus is on attention to needs and not on locus of control. The main argument has to do with the, active or passive, emphasis placed on the family versus the business during the succession process. Along similar lines, using locus of control instead of extraversion would distract from the underlying psycho-dynamics between the needs of the business and those of the family, an integral part of the succession process in owner-managed firms. In addition to locus of control, one could argue that adaptations (Barbuto, 1997) to Jungs original theories and specically to the concept of extraversion could be used in this study to explore succession. The most recent adaptation of Jungs attitude of extraversion is found in the ve-factor model (Sadowski and Cogburn, 1997). To illustrate, Mount and Barrick (1998) reanalysed all available published and unpublished research from 1952 to 1988 by categorizing scales from personality inventories mainly into the ve-factor model categories (Extraversion, Emotional Stability, Agreeableness, Conscientiousness, and Openness to Experience). In addition, a number of researchers also attempted to apply Jungs original concept of extraversion through various inventories. One attempt was through the StrongCampbell Interest Inventory of vocational interest and another was through the Experiential Learning Model of cognitive learning (Barbuto, 1997). A different adaptation of Jungs attitude of extraversion is found in the NEO Personality Inventory related to the ve-factor model mentioned above (Sadowski and Cogburn, 1997). The most widely used inventory related to Jungs concepts has been the MyersBriggs Type Indicator (Briggs and McCaulley, 1989). Such adaptations to the concept of extraversion have not changed substantially its original denition. They have, however, lost some of its original depth. While Jungs original concept of extraversion denotes a rich synthesis of actions, reactions and implications, these applications have simplied its meaning to overt behaviour related to sociability, assertiveness, action and expressiveness. For this reason, the present study focuses on Jungs original concepts and not to any adaptations of them.2 In turn, the author uses Jungs theory to explain how extraversion offers a unique insight into the succession process in owner-managed rms. Such an insight will provide not only a diagnosis of the succession issue but also ways of addressing it effectively. In the section that follows, the author provides the line of reasoning that justies her contention. She examines the ways in which the business behaves in an extraverted way during succession. Then she discusses the implications of an extraverted succession and proposes ways to avoid it. Finally, the author concludes with suggestions on how the present analysis may be enriched through further research.

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Stavrou: Succession in Owner-managed Firms

Why Succession in Owner-managed Firms is Extraverted

Many owner-managed rms are founded by entrepreneurs. As these rms grow and other family members join the rm as employees, they usually become family enterprises, regardless of whether they remain entrepreneurial in nature (Ward, 1987; Ward and Aronoff, 1990; Westhead and Cowling, 1998). In becoming family enterprises, these rms function within two main systems, the family and the business, where the major stakeholders are the owner-managers, the potential successors who are often members of the owning family, and other family members. Therefore, the main difference between these rms and otherwise similar organizations lies in the critical role that owners, and other key family members, play in organizational processes at every level (Davis and Harveston, 1998). As a result, succession-related issues in owner-managed rms are determined to a large extent by the owning family (Dyer, 1986; Fox et al., 1996), often on the basis of family needs and desires rather than business requirements or concerns (Cliffe, 1998; Riordan and Riordan, 1993). This situation in family rms is depicted graphically in Figure 1 below, where business and family needs are outlined on the two sides of a scale and where the major stakeholders are the drivers of the succession process. According to Welsch (1993) and Birley (2002), the interests of the owning family and those of the business are frequently in opposition, where the interests of the former interfere with the optimization of business operations. Hollander and Elman (1988) go as far as to suggest that the business system often falls victim to the power of the family. If that is the case, then the extraverted attitude in such rms prevails where the interest is transferred from the business (the subject) to the family (the object) with the danger that the subject is sacriced for the objects sake. As Jung (1999) would phrase it, A too extraverted attitude can become so oblivious to the subject that the latter is sacriced completely to socalled objective demands (p. 335). As shown in the centre of Figure 1, the ways in which the business is sacriced to the demands of the family in relation to succession are usually two (Handler, 1994; Kets de Vries, 1993; Kuratko et al., 1993). The rst involves the retirement of owner-managers from their rms and the second involves the selection and subsequent treatment of successors. The magnitude of such sacrice depends on the interplay between family and business needs.

The Interplay between Family and Business Needs

It is generally accepted that most owner-managers do not retire; they die in ofce (Navin, 1991; Brown and Coverley, 1999). Connected with their unwillingness to retire is the failure by the majority to plan for their succession (Davis and Harveston, 1998; Lansberg, 1988). Some studies suggest that owners are too busy running and controlling their rms to plan their replacement (Sharma et al., 2001), placing a low priority on such planning. Other researchers suggest that the procrastination of owners in planning their succession is connected with their fear that losing control of the business by retiring will lead to a demotion from their central role in the family (Lansberg, 1988). They also suggest that these owners 335
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International Small Business Journal 21(3)

Common Stakeholders: Owner-Managers Successors Other Family Members

Extraverted Succession Family System Business System

Key Management Issues in Succession: Retirement of owner-manager Selection and treatment of successor Interplay Between Family and Business Needs

Family needs in relation to succession: Continuation of owner-manager in ofce Selection of successor on the basis of family norms and characteristics Promotion of paternalism and nepotism among family members Support of the wellbeing of family members Dependence of successor on successee Governance by member bonds

Business needs in relation to succession: Planning for succession Retirement of successee Selection of successor on the basis of competence Independence of successor from, while collaboration with successee Successful market adaptation and survival Driven by prot and loss statements Governance by explicit rules

Figure 1. Extraverted Succession in Owner-managed Firms

develop a complex set of rationalizations and excuses to avoid retiring from the business. These excuses may be connected to feelings of rivalry and jealousy towards potential successors. Finally, since many owner-managers identify closely with their rms, they may associate their retirement from the rm with their own mortality (Brown and Coverley, 1999; Seymour, 1993). Regardless of the reasons behind owner-manager reluctance to retire, the business needs careful succession planning. Founder resistance to plan for succession robs the rm of its chance to be professionalized in order to meet its changing needs as a growing business (Cliffe, 1998; Tashakori, 1980). According to Ward (1987) and Birley (2002), careful succession planning can bring into the rm new leaders who could help regenerate the rm by challenging traditional 336
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Stavrou: Succession in Owner-managed Firms assumptions and bringing in new ideas. Furthermore, Longenecker and Schoen (1991) believe that effective planning can help achieve growth and protability because it can accommodate both business and owner needs; provide opportunities for potential successors to learn the business; and identify future needs and opportunities for the rm. Finally, it reduces the chance that such a rm will cease to exist after the founder is no longer there to run it (Alcorn, 1982; Sharma et al., 2001). In turn, the inability within the business system to plan for the ownermanagers retirement through careful succession planning is clearly against the best interests of the business. It denotes an extraverted attitude from the rms (the subjects) point of view as it serves the interests of the family (the object). According to Jung (1999: 5), . . . the object works like a magnet upon the tendencies of the subject; it determines the subject to a large extent and even alienates . . . [it] from . . . [itself]. Where the subject is the owner-managed business, it is alienated from its own needs by giving in to the needs of a family member, in this case the owner-manager, to stay in the business beyond the timeframe requisite for the rm without planning for his or her succession. While failing to plan for succession, the majority of owner-managers plan on transferring leadership control of the business to other family members, usually offspring (Dumas, 1992; Rosenblatt et al., 1985; Shepherd and Zacharakis, 2000). Acting in such a way serves more their own needs as well as the needs of the owning family rather than those of the business. To illustrate, 8090 percent of entrepreneurs, who have teenage children hope usually quietly that their offspring will someday join them in the business (Ward and Aronoff, 1990; Birley, 2002). As a result, family norms and characteristics like status, gender and birth order in the family determine to a large extent ones chances of taking over an ownermanaged business. Alcorn (1982) notes that many such rms are similar to monarchies in which the rst born son becomes the ruler and the rest of the offspring assume business roles based on their gender, birth order and status in the family (p. 34). Now it is more frequently acknowledged that the eldest may not always be the best and sons may not necessarily be better than daughters (Goldberg and Wooldridge, 1993). Nevertheless, many male entrepreneurs who value family succession as a means of transferring ownership and control of the business continue to consider sons but not daughters as appropriate successors (Dumas, 1992; Birley, 2002). However, such preferences among family members are not necessarily in the best interests of the rm. To begin with, successor selection is done from a very limited pool because blood relation is a very restrictive criterion. Adding criteria such as gender or birth order makes the selection even more limiting for the rm. Furthermore, criteria related to birth order, gender or general family standing may not have any real functional value for the rm. Although the focus could be on criteria that have functional value for the rm, such criteria are often ignored. This happens because the rms inner values are left unexplored since the whole focus is outer-directed and actions are based on family needs. According to Jung (1999), for the extravert objective happenings have an almost inexhaustible 337
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International Small Business Journal 21(3) fascination, so that ordinarily he never looks for anything else (p. 334). In other words, while focusing on the familys demands, the needs of the rm are neglected. Given the emphasis on family needs, criteria such as competence are frequently ignored during the succession process in many owner-managed businesses. Leadership transitions in these rms often are characterized by paternalism. Levinson (1983) denes paternalism as the kind of management that does for people what ideally they should do for themselves. (p. 75). The rm is there for the family, providing family members with nancial independence, social esteem and a respectable occupation. The rm takes care of incumbents if they follow this paternalistic culture. Companies place a premium on loyalty, not on personal growth. Not all owner-managed rms adopt this organizational culture, but those that do buy incumbents loyalty since management values compliance more than competence or independence (Aronoff and Ward, 1993; Birley, 2002). In turn, many owner-managed businesses employ a nepotism philosophy during succession to promote their relatives (Handler, 1992; Shepherd and Zacharakis, 2000; Ward, 1987). Someone may claim that nepotism may have a functional value. Being a relative to the predecessor means that one already knows the culture of the rm, is familiar with, and cares for the rms strengths and weaknesses. Being a relative means also that one has been exposed to the business environment (Bjuggren and Sund, 2002; Corry, 1990). However, such exposure to the rm should not be the primary criterion for selection. According to Danco (1982), nepotism is not a problem as long as the right nepots are selected. They can be sons or daughters, sons-in-laws or cousins. Also, they can be corporate sons managers raised in the business who become heirs. But the basic urge must be to leave a thriving business behind (Shepherd and Zacharakis, 2000). Nevertheless, when a nepotistic philosophy enters managements way of thinking, family rather than business needs are given priority, allowing for the extraverted attitude to prevail. Often, business owners show a remarkable capacity for closing their eyes to the weakness of their beloved sons or daughters and welcome their offspring in the family business regardless of their ability to contribute to its success (Kets de Vries, 1993: 59). It seems that in ownermanaged rms where nepotism is practised, most often it develops from the familys imposition of its own values and membership criteria on the business, regardless of the question of competence. Such nepotism may lead to a system that stresses family politics rather than business demands. As a result, non-family members with managerial talents have limited opportunities to assume important roles in the rm. Furthermore, the company is in a disadvantaged position with respect to its competitors who can draw from a wider pool of non-family members for the leadership role of a rm (Alcorn, 1982; Donnelley, 1964). As Donnelley (1964) notes, in many owner-managed rms, the essential task-orientation of the rm is destroyed considerably, jeopardising the companys long term prospects for survival (p. 25). As a result, parent-owners perceive their relation with their children as much 338
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Stavrou: Succession in Owner-managed Firms more important than the rms requisite functioning. According to Jungs framework, the subject (the business) is being put aside, and the object (the family) takes on a central role, where the objects needs become more important than those of the subject. As a result, judgements are made based on affection and not utilitarianism, unless utility is indicated by an outside source (Jung, 1987), namely the family. In these cases however, it is obvious common sense that when managerial decisions are inuenced by feelings about and responsibilities toward relatives in the business, when nepotism exerts a negative inuence, and when a company is run more to honour a family tradition than for its own needs and purpose, there is likely to be trouble (Levinson, 1971: 442). Therefore, given that nepotism tends to adhere to family rather than business needs during the succession process, it could be characterized as an extraverted behaviour from the part of the business. Consistent with extraverted behaviour on the part of the owner-managed rm is the co-existence of both successor and predecessor (owner-manager) in it even after ofcial succession takes place (Stavrou and Swiercz, 1998). Parents, who have technically resigned, want to stay in their rms and dictate to their heirs how to do things, in an attempt to be helpful to the rm and their offspring as well. Offspring successors often do not object to such dependency on parents because they fear hurting their parents, breaking family relations or being rejected by the family (Rosenblatt et al., 1985). Many times, successors crave the safety and comfort of having a parent run things. Offspring may feel that dismissing the dependent relationship with their parents will leave them without a role in the rm. This reluctance on the part of offspring to take full responsibility and parents to retire may lead to offspring incompetence the inability of offspring to run the business without parental guidance. In turn, when parents eventually leave for good, offspring may be unable to guide the rm on their own, leading to mismanagement (Rosenblatt et al., 1985; Stavrou and Swiercz, 1998). One may claim that since the rm is owner-managed, then the owner-manager and possibly key members of his or her family should play the determining role. However, does the determining role also mean putting personal or family member needs over and above business needs? Even if the business exists with the main purpose to serve the family, how can it do so in the long run if its needs are not given proper attention? In many cases, the rm is so extraverted towards the family that even the most obvious of all subjective facts, such as its own survival through succession, receives scant attention. The owners inability to relinquish control, the way successors are selected and the inability of successors to take real control of the business may drive the rm to near destruction (Birley, 2002; Hollander and Elman, 1988; Welsch, 1993). However, management often realizes that only when it is too late. As Jung (1999) says the body is not sufciently objective or outside, so that the satisfaction of elementary needs which are indispensable to physical well-being is no longer given its due (p. 335). Management will feel the loss of equilibrium when it announces itself in abnormal body sensations (Jung, 1999: 335) when the rm is on the verge of bankruptcy, sale or closing. To avoid such loss of equilibrium, demonstrated with a scale in Figure 1, 339
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International Small Business Journal 21(3) management needs to acquire a more introverted (i.e. business) orientation to succession practices. In other words, owners should understand that family and business are two interrelated, yet separate entities. They could explore the notion that what is good for the rm may not be good for the family and what is good for the family may not be good for the rm. As a result they may set limits that separate family from the rm and the rm from family. Both sides ought to understand that when they act in the business environment they should act in the way that is better for the rm. To illustrate, it does not seem requisite for management to overweigh the fact that a successor is a member of the family and ignore his or her (in)ability to lead the business. While family-related criteria such as blood relation or gender cannot change, business-related criteria such as work experience and academic degrees can. Family-related criteria may be considered during the process of selecting a successor but the most important criteria should be those ensuring what is best for the business. As Jung (1999: 373, 452) notes, although the introverted consciousness is naturally aware of external conditions, it selects the subjective determinants as the decisive ones . . . [acting] in a way that clearly demonstrates that the subject is the prime motivating factor and that the object is of secondary importance. In placing primary importance on the rm (the subject) and its needs, it would be easier for the rms management to clarify the purposes of the business from those of the owning family. For example, while the primary role of a family is the emotional maintenance of its members, the primary role of a business should be to adapt successfully to external market conditions (Janjuha-Jivraj and Woods, 2002 ). Where the purpose of the rm is to make money, the purpose of the family is to care for and develop its members. Furthermore, while a business ought to exist independently of particular people, a family is dened by its members. In addition, whereas the success criteria for a business are frequently explicit, such as prot and loss statements or market share, the success criteria of a family are implicit and conceptual, such as self-esteem or autonomy of its members. Finally, the rm should be held together by the rules that govern it, while the family should be held together by the emotional bonds and affectionate ties of its members (Kepner, 1983). By clarifying boundaries between business and family, owners may still view succession as the transfer of leadership for the purpose of continuing family control of the rm (Davis and Harveston, 1998; Handler, 1994). However, they must plan it in such a way as to enable the rm to have an orderly and suitable replacement of persons in key positions. Their goal needs to be obtaining the right number of properly prepared managers to take over when they are needed (Deegan, 1986; Cliffe, 1998). These managers must be equipped with the necessary competence to perform effectively their particular role, while encouraged to use their own natural leadership style (Jaques and Clement, 1991). Their relationship with predecessors should be characterized by respect, mutual understanding and cooperation (Handler, 1992; Lansberg, 1988; Seymour, 1993; Shepherd and Zacharakis, 2000). Furthermore, these managers need to demonstrate the ability to create and establish a positive trend toward growth and prot for the business (Churchill 340
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Stavrou: Succession in Owner-managed Firms and Hatten, 1987; Sonnenfeld, 1988). They should not only have the title but also the power of ofce, given to them by owner-managers who are able and willing to give up control of their rms. Owner-managers also ought to accept the possibility that changes may occur in these rms and be willing to plan for succession with the persons who need to be involved in the process (Birley, 2002; Goldberg and Wooldridge, 1993; Rosenblatt et al., 1985). According to Jaques and Clement (1991) leadership is the process in which one person sets the purpose or direction for one or more other persons, and gets them to move along together with him or her and with each other in that direction with competence and full commitment (p. 4).

Conclusions, Implications and Suggestions

Given the importance of succession, this article is the rst to explore its problems in owner-managed rms through Jungs lens of extraversion, providing a basic theory to explain many of the burning issues related to its underlying dynamics. Recognizing the underlying psychological attitude integral to succession, ownermanagers will be in a better position to clarify the purpose of their rms. If the purpose of the rm is merely to serve the owning family, then an extraverted attitude during succession will not inevitably be in opposition to that purpose. In this case, extraversion may lead to serving the family, even if only for the short run. However, if the purpose of the rm is its continuity and the best performance that it can achieve, while serving the family, extraversion as the primary attitude during succession will probably lead to ineffectiveness, which will gradually inhibit the rm from accomplishing its targets. Extraversion during succession will put both the rm and its owners in an undesirable position. The rm may eventually go bankrupt or be sold and the owning family will feel it is losing one of its members. The loss will be especially strong for owner-managers, who will feel as though they are losing a part of their lives. When the succession process is not dominated by an extraverted attitude, owner-managed rms may have a better chance to survive it. Not having an extraverted attitude to dominate the succession process means that the rm system is mature enough to consider and practise what is good for the rm; management is in the position to judge and act for the rms benet. Of course in order to provide a better understanding of the succession process in owner-managed rms, future researchers may explore whether the countrys culture affects the importance a family gives to its business and the importance that a business gives to its owning-family. It would be useful if the contention of this article within the context of culture were subjected to empirical investigation. Furthermore, an investigation of the organizational subculture of an owning-family and its business may shed some light on when extraversion is practiced most. For example, if roles in the family are well dened, the fact that family and rm are interrelated may not provide for an extraverted attitude in succession since the subculture of the family is transferred to that of the rm. However, if family members do not have or operate within clear boundaries 341
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International Small Business Journal 21(3) among themselves, then this behaviour could be transmitted to the rm environment, causing extraverted behaviour. In addition to the above, the investigation of how other possible Jungian psychological attitudes during succession would lead to effective succession could be fruitful. To illustrate, someone could claim that acting with an introverted dominant attitude would help (rm)management focus on the rms inner values. In turn, an in-depth investigation of introversion and its implications during the succession process would be quite interesting. Psychological approaches beyond Jung may also be valuable. As mentioned in the introduction of this study, the relationship between locus of control and the issue of succession could provide insight on how owner-managers may handle the succession process more effectively. For instance, it would be interesting to study how internal versus external locus of control could energize the business system to proactively plan for effective succession. Finally, the psychological attitude of the succession process in owner-managed rms could be compared to that of the succession process in otherwise similar businesses. Then, a general model of requisite attitude for the succession process could be suggested. This model could be empirically tested. In conclusion, succession is a vital part of any professional system of management (Deegan, 1986: 28). Therefore, all organizations that do not wish to disappear from the social scene and owner-managed rms are no exception must have some arrangement to perpetuate their existence (Goody, 1966). In doing so, these rms need to have an internal focus and a clear understanding of inner needs and values.

Acknowledgement
Special thanks to Elena Iona for her valuable contribution to this manuscript.

Notes
1. The author is referring to the business itself not any of its members. Such members could have either introverted or extraverted personality attitudes. However, the succession process as far as the business is concerned, is hypothesized to have an extraverted attitude. 2. According to Opt and Loffredo (2000), the Jungian personality attitude of extraversion remains by far the most widely used and thoroughly researched.

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ELENI STAVROU has a PhD in Management and Organization, with an emphasis on family business, from the George Washington University. She has been the Director of Programs and Operations of the Center for Family Enterprise at the same university. Her research interests are: succession planning; leadership and management development; group and family dynamics; intergenerational transitions; and human resource management. Presently, she is Assistant Professor at the University of Cyprus. Largely as a result of her initiative, the University of Cyprus is one of the few in Europe and the Middle East to promote and publish research in the emerging eld of family enterprise. Please address correspondence to: Eleni T. Stavrou, PhD, Assistant Professor, Department of Public and Business Administration, University of Cyprus, 75 Kallipoleos Street, Nicosia, Cyprus. [email: eleni1@ucy.ac.cy]

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Stavrou: Succession in Owner-managed Firms Succession la tte des entreprises gres par leur propritaire travers lobjectif de lextraversion Eleni T. Stavrou Universit de Chypre, Chypre
La succession dans les entreprises gres par leur propritaire est rarement planie. Par ailleurs, elle a rarement lieu du vivant du grant propritaire. Mme si elle a lieu du vivant du grant propritaire, elle est souvent inefcace. Bien que la documentation cite diverses explications concernant les problmes lis la succession dans les entreprises gres par leur propritaire, ces explications ne fournissent pas une thorie cohrente et globale pour expliquer sa dynamique. Lauteur suggre que la question de la succession dans les entreprises gres par leur propritaire soit examine travers le prisme de lextraversion, attitude psychologique qui peut aider clarier les caractristiques les plus fondamentales de la succession et expliquer les facteurs qui sont la base de son processus. Mots cls: extraversion; entreprises gres par leur propritaire; succession

La sucesin al liderazgo en las empresas dirigidas por el propietario estudiada desde el prisma de extraversin Eleni T. Stavrou Universidad de Chipre, Chipre
La sucesin en las empresas dirigidas por el propietario casi nunca est planeada con antelacin y es raro que suceda durante la vida del empresario propietario. Aun cuando se toman las medidas del caso, no suelen dar resultado. Aunque la literatura referente al tema cita varias explicaciones respecto a los problemas relacionados con la sucesin en las empresas dirigidas por el propietario, estas explicaciones carecen de una teora coherente y global para exponer su dinmica. La autora propone que el asunto de la sucesin en las rmas dirigidas por el propietario se estudie desde el prisma de extraversin, una actitud psicolgica que podra ayudar a claricar las caractersticas ms fundamentales de la sucesin y explicar los factores que sirven de base al proceso. Palabras claves: extraversin; empresas dirigidas por el propietario; sucesin

Fhrungsnachfolge in eigentmergefhrten Firmen: durch die Lupe der Extraversion betrachtet Eleni T. Stavrou Universitt Zypern, Zypern
Die Nachfolge wird in eigentmergefhrten Firmen selten geplant. Zudem wird diese Frage zu Lebzeiten des Eigentmer-Unternehmers nur gelegentlich akut. Und auch dann ist die Nachfolge oft ineffektiv. Obwohl in der Literatur verschiedene Erklrungen zu den mit der Nachfolge in eigentmergefhrten Firmen verbundenen Problemen angefhrt werden, fehlt diesen Erklrungen eine zusammenhngende und umfassende Theorie zur Erluterung ihrer Dynamik. Der Autor schlgt vor, das Problem der Nachfolge in eigentmergefhrten Firmen durch das Prisma der Extraversion zu betrachten, eine psychologische Betrachtungsweise, die mglicherweise hilft, die grundlegendsten Eigenschaften der Nachfolge zu klren und die ihrem Prozess zugrunde liegenden Faktoren zu erklren. Schlagwrter: Extraversion; eigentmergefhrte Firmen; Nachfolge

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