Succession planning and knowledge management with knowledge sharing perspective in business families

Loss of knowledge is a critical factor for organizations. This paper approaches the topic of a combined research of knowledge management and succession planning.

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SUCCESSION PLANNING AND KNOWLEDGE

MANAGEMENT WITH KNOWLEDGE SHARING

PERSPECTIVE IN BUSINESS FAMILIES

Antonette Asumptha J and Mathan C

National Institute of Technology, Trichy, India

ABSTRACT

Objective: Loss of knowledge is a critical factor for organizations This paper approaches the

topic of a combined research of knowledge management and succession planning Factors like death and family partition and sudden loss of the key member is faced with succession planning This research has a glimpse of knowledge management and detailed study on succession planning

in particular family owned business The scarcest resource today is top management talent that can handle anything negative that arises

Methods: Here in this research we have tailored Structural Equation Modeling and Theory of

Planned Behavior

Findings: From a managerial perspective, our results suggest that cultivating positive

normative beliefs of significant members motivation to comply as well as positive attitude for sharing knowledge

Novelty: A causal path from Attitude to Perceived Behavioral Control

Key words: Family owned business, Succession Planning , knowledge management, knowledge

sharing

Cite this Article: Antonette Asumptha J and Mathan C., Succession Planning and Knowledge

Management with Knowledge Sharing Perspective in Business Families International Journal of

Management, 7(7), 2016, pp 70–81

http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=7&IType=7

1 INTRODUCTION

Knowledge leads to successful competitive advantage Hence we accentuate on strategic knowledge management Knowledge management is nothing other than collecting, using, disseminating and growing knowledge in a concern It involves the use of people, technology and processes (Awad and Ghaziri 2004, 2-3) One process that can be put in place is to enhance the capture of knowledge is succession management

Succession planning has been defined as “the process of ensuring that qualified persons are available to assume key managerial positions once the positions are vacant” (Mondy and Noe 2005, 506)

Succession planning is an explicit plan for management succession to fill in key roles within the company at all levels of the organization Succession planning is a process whereby an organization

ensures that employees are recruited and developed for future purpose Through the succession planning process, organizations can recruit superior employees, develop the recruited person’s knowledge, skills, and abilities, and prepare them for advancement or promotion for more challenging roles (Kathy, PHD) Some jobs are the lifeblood of the organization, hence it can’t be neglected or kept vacant for a

long time, thus succession planning came into being Succession planning should be actively pursued when the organization expands and loses the key role employees The developmental needs of the employee have to be fulfilled and ensured that all employees are developed to fill in their key roles which are expected out of them

1.1 Advantages of Succession Planning

To face sudden attrition the organization should be well prepared in advance and this is done by success planning

Key roles are maintained

Identification of employee strengths, skills, abilities

A motivating factor for the employees

Advantage of recruiting internal employees who are aware about the organization reduces cost and time

The process of succession planning is as follows:

1 In order to ensure leadership continuity, creating a talent pool

2 Building potential successors

3 Scrutinizing candidates and obtaining the best candidature

4 Yielding a greater return on investment by cotemplating resources

Effective succession planning is required to recognize the lifeblood jobs of the organization essential to

be filled up and is critical

2 GAP AND OBJECTIVES

The story of family succession has been there right from the 1950’s.Brazil has done a lot of studies in the area of succession planning but Asia hasn’t touched this part Hence we draw attention to succession planning combined with knowledge management in family business This paper is aimed to bring out the concept of succession planning and knowledge management in family owned businesses

3 COMMON PITFALLS INCLUDE

Full responsibility delegated to human resources

Succession Planning has to be updated regularly or else there would be adverse results Friendships and relationships cloud the judgment

Before getting into in depth understanding of succession planning let us consider what knowledge management

4 KNOWLEDGE MANAGEMENT

“Systematic management of knowledge takes on new importance with the current economic reality where knowledge is a differentiating competitive factor for individuals, corporations, and nations This reality is the driving force behind broad adoption

Knowledge Management: A Working Definition Simply stated, in the opinion of this author, the objectives of knowledge management (KM) are: (1) To make the enterprise act as intelligently as possible

to secure its viability and overall success and (2) To otherwise realize the best value of its knowledge assets.” KARL M WIIG (1997)

5 THE RELATIONSHIP BETWEEN SUCCESSION PLANNING AND

KNOWLEDGE MANAGEMENT

Eddleston and Kellermanns (2007) portray that family business may be stuck without a succession strategic process Succession planning is important when the present generation wants to grow and develop the new generation Hence transfer of knowledge from current generation to the new generation in family owned business is crucial Morris et al (1997) and Tirsadari and Dhewanto (2012) Two types of knowledge that is used in succession planning are implicit and explicit knowledge, explicit knowledge is easily codified as a excel database while implicit knowledge is concerned with leadership, entrepreneurship and risk taking Factors that directly affect the succession process are: (1) tendency of the holder to leave, (2) disposition of the successor to take over, (3) a deal among the family members to maintain family involvement in the business, (4) acceptability of the individual roles, and (5) succession planning (SHARMA;

CHRIMAN; CHUA, 2003).”W Gibb Dyer (1989) has corroborated on the reason why should a family business be professionalized.” One reason among them is acquiring or developing management expertise

to prepare for leadership succession The founder or family leader may want to retire in the near future and may feel that family members in the business need additional training before assuming the mantle of leadership, or the founder may feel t9hat no one in the family is capable of running the business after he or she is gone A search is then made to find managers that can be trusted with the future leadership of the firm.”

Succession planning, generally, in whatever industry it may be, is critical, especially when the business

is transferred to the next generation Depending upon Coleman (2013) here one should appreciate the entrepreneurship skills of the team leader as he has already set up the platforms, the new generation just needs to build on Here the team leader selects the new leader as he retires, here is way knowledge sharing plays a role the succession planning helps the leader to select the right one trained for taking up the position

6 RESEARCH MODEL

6.1 The Theory of Planned Behaviour Model

Ajzen (1992) proposed the TPB model an extension of TRA model Attitude is the favorable or unfavorable effect of performing a behaviour Subjective Norms is the social pressure for performing the behavior Perceived Behavioral Control is the ease or difficulty in performing behaviour

Figure 1 The Theory of Planned Behaviour Model

6.2 Hypothesis

The proposed hypothesis are :

H1 Family members attitude has a positive effect on the intention to share knowledge

H2 Family members subjective norms has a positive effect on the intention to share knowledge

H3 Family members perceived behavioral control has a positive effect on the intention to share

knowledge

Figure 2 The THEORY OF PLANNED BEHAVIOUR Model

Figure 3 Technology Acceptance Model (Davis et al,1989)

PBC is the perceived ease or difficulty that the individual faces to perform the behaviour (Emma L Pelling and Katherine M White,2009),2001a,b; Bock et al 2005; Ryu et al(2003) & Lin 2007c; Chang

1998, Chau & Hu 2001

Perceived ease of use (PU) – This was defined by Fred Davis as "the degree to which a person believes that using a particular system would enhance his or her job performance"

Figure 4 Extended Model

The Extent to Which a Person Feels Able to Enact the Behaviour: has two Aspects Attitude Influences Pbc: How much a Person has Control over The Behaviour and Attitude Influences Pbc: How Confident a Person Feels about being Able to Perform the Behaviour

Table 1 Measurement Model Fit –Table1 Measurement Model Fit

Factor

Attitude toward knowledge

sharing (AT)

Table 2 Item Statistics

Table 3 Reliability Statistics

Discriminant validity was found by evaluating the square construct correlation values The construct correlation values of AVE values.(Fornell and Larcker 1981)

Figure 5 Confirmatory Factor Analysis (CFA) Model

Figure 6 The Theory of Reasoned Action

Figure 7 Extended TPB Model with Causal Path from Attitude to PBC

Table 5 Overall fit indices of the Investigated

Overall fit indices of the Investigated Model

Index Action(TRA) behavior(TPB) Path from Attitude to PBC cut-off value Measures of Absolute Fit

Near to Degree of

The greater,

RMSE

Incremental Fit Measures

Parsimonious Fit Measures

The higher,

The higher

7 PATH COEFFICIENTS

Table 6 Implication of individual paths

Attitude To PBC

Table 7 Effect on Academicians Intentions to Share Knowledge

Model2 Causal Path from Attitude to PBC

EFFECT

EFFECT

EFFECT

The aim of this research was to cull out the applicability of social psychological theories, the Theory of Reasoned Action and Theory of Planned Behaviour moto the predict knowledge sharing among family 'members in succession planning and extend the predictability of original TPB model by including causal path from Attitude to Perceived Behavioral Control Results show that attitude and subjective norm are not

as independent, and is consistent with the previous research in other domains

8 CONCLUSION

This study investigated the knowledge sharing behavior of family members in succession planning by applying prevalent psychological social psychology models in business families This study focused to bring out the applicability of the Theory of Reasoned Action and Theory of Planned Behaviour and we also tested the extended model by adding a causal path from Attitude to Perceived Behavioral Control Several implications from the study can be shed light on in knowledge sharing behavior in family members with the key focus on succession planning

Results from the study shed light on several implications in physician's knowledge sharing behavior First, findings of the study show that the TPB model can be used quite successfully Second, the amended TPB model shows that the indirect effects with a causal path from Attitude to Perceived Behavioral Control are significant Third, the research has the intrinsic worth of conducting a knowledge sharing investigation in a real-world business setting that involves family members From a managerial

perspective, our results suggest that cultivating positive normative beliefs of significant members motivation to comply as well as positive attitude for sharing knowledge

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APPENDIX

Knowledge Sharing and Succession planning in a family owned business

Highest Qualification: Department:

Position: Years of Experience with UG:

Organization Type: Govt./Private If Government : State/ Central

If Private: Self-Financing / Non Self – Financing

Appendix A Questionnaire Items

Construct Items

Intentions to share knowledge(IN:4 items)

I always will

IN1: plan to share knowledge with my family members

IN2: try to share knowledge with my family members

IN3: make an effort to share knowledge with my family members

IN4: intend to share knowledge with my family members, if they ask

Attitude toward knowledge sharing (AT: 5 items)

If I share my knowledge with other faculty members, I feel

AT1: very harmful very beneficial

AT2: very unpleasant very pleasant

AT3: very bad very good

AT4: very worthless very valuable

AT5: very unenjoyable very enjoyable

Subjective norms (SN: 5 items)

SN1: It is expected of me that I share knowledge with other faculty members

Most academicians who are important to me

SN2: think that I should share knowledge with other faculty members