Korean Women in Leadership by Yonjoo Cho & Gary N. McLean

Author:Yonjoo Cho & Gary N. McLean
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

Gendered Business Succession

Business succession in the context of family business refers to the process in which founders (or next-generation family members) pass on to the family’s next generation the management and control of the family business, for the purpose of continuity of their business (Han, 2008; Handler, 1994; Lee et al., 2003; Ward, 1987). As Ward (1987) noted, family businesses inherently include business succession processes, a crucial aspect for the growth of family business (Birley, 1986; Kets de Vries, 1993).

Men (sons or sons-in-law) take over the family firm, while women (wives, daughters, or daughters-in-law) support the men and are less involved in decision-making processes (Barnes, 1988; Dumas, 1989; Wang, 2010). Most family firms consider women to be invisible or a helper in the leadership of the family business, even though women actually play a crucial role in the day-to-day running of the family business (Marshack, 1994). As such, men-dominant business succession processes may reflect that family business elicits gender-role segregation (Hollander & Bukowitz, 1990). However, women can also take the initiative in business succession. Dumas (1989) found that many daughters in her sample “considered entering the family business, let alone becoming manager or successor, until a crisis or unforeseen circumstances had forced them to consider the family business as a source of employment” (p. 39). This suggests that, practically, business succession tends to focus on the intergenerational transition of management itself, rather than the successor’s gender (Beckhard & Burke, 1983; Han, 2008). In Han’s (2008) study of social networks in chaebols (large Korean family-run conglomerates), women successors are present in the business succession process.

Therefore, in terms of business succession in a family business, there are two reasons why gender differences may not be found. First, founders of family businesses pursue the retention of family control even after their management authority has been turned over to non-family members (Astrachan, Allen, & Spinelli, 2002; Sharma, 2004). Han (2008) illustrated how Korean chaebols have made connections with people with particular social status (such as politicians or people in other chaebols) to reinforce their corporate governance. In this sense, the gender of the successor is not as important as whether the successor is a family member. In addition, given that family members are strongly tied to one another (Aldrich & Cliff, 2003; Granovetter, 1985), all the decisions made in a family business tend to be internally rationalized. Furthermore, if a family business builds its own knowledge throughout its business history , a CEO outside of the family would have difficulty in fully understanding the vision or philosophy of the business (Burkart, Panunzi, & Shleifer, 2003). As a result, business succession is likely to take place among family members (whether the members are men or women); this is considered an efficient and rational way to keep the competitive advantages of the family business (Lee et al., 2003).

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