SUCCESSION MANAGEMENT PLANNING DIMENSION: A CASE OF MUSLIM FAMILY BUSINESS OWNER’S IN KEDAH STATE

Abstract

Family business is very important to economic growth because it can contribute to the Gross Domestic Product (GDP) of a country. A family business is a business entity managed by the same family members. Although there are no complete statistics on the number of family businesses in Malaysia, but family businesses in Malaysia have a contribution to the country, especially family businesses owned by Muslims. The main objective of this paper is to study succession management planning in an Islamic family business in the state of Kedah. Thus, this paper discusses the succession planning process from the founder (original owner) to the second and subsequent generations. This study was conducted qualitatively using a case study approach. Interview techniques were used for data collection on second generation owners of Muslim family businesses. The results of the study found that there are six (6) main dimensions as contributors to the succession planning factors of a family business, namely (i) Identifying replacement candidates; (ii) Involvement of family members in business management; (iii) Develop survival tools for replacement candidates; (iv) Educate and nurture replacement candidates; (v) Consider assistance from outside parties and (vi) Develop an environment of respect and trust. Thus, family businesses should have a succession planning process so that the business can be administered by the next generation efficiently.