CEO Succession Influence on Internationalization of Family Businesses : An Interview Study of Internal and External CEO Successors and their Influence on the Internationalization of Family Businesses

Abstract

Background: CEO succession is a critical process in organizations, marked by its potential for disruption andstrategic changes. CEO succession can significantly influence corporate strategy, with the CEOwielding considerable power in shaping organizational direction. As part of corporate strategy,internationalization is considered one of the most important future priorities in many familybusinesses. It holds the potential to help those businesses survive in an increasingly competitivebusiness environment while also maintaining the business for generations to come. As the CEOsuccession entrusts a new person with a role that can have a significant influence oninternationalization, the challenge is to ensure that this person not only follows financial goalsin internationalization but also balances non-financial goals. This is because family businessesgenerally attach great importance to SEW, which are non-financial attributes. An influence ofthe CEO successor on internationalization that is not in line with the SEW could therefore beundesirable for the family businesses. Hence, choosing an appropriate CEO becomes crucial. Purpose: This study aims to examine how CEO succession influences the internationalization of familybusinesses. The study intends to contribute to the current literature by investigating theindividual influence of CEO successors on internationalization, offering both theoreticalinsights and practical implications. By identifying the diverse outcomes associated withdifferent succession types, this research intends to support family businesses to better predictand anticipate the consequences of CEO succession and internationalization. Method: The methodology of this study follows an ontological relativism approach, meaning weacknowledge that multiple truths exist. This further aligns with our epistemological stance onsocial constructionism. The basis of our master thesis is built on a qualitative study followingan inductive approach to generate new theories arising from the empirical data collected.Therefore, we conducted an exploratory interview study and analyzed the acquired dataaccording to the Gioia method. The sampling of our interviewees was done purposively byincluding predefined selection criteria. Conclusion: This paper examines how CEO succession in family businesses affects their internationalizationstrategies, considering successors from within the family, internal employees, and externalhires. It was found that all types of successors can influence internationalization, yet withvarying outcomes as a result. Intra-family successors, while not necessarily having a greaterinfluence on the board, often align with family values, leading to continuity in internationalstrategy. Internal employee successors tend to maintain existing strategies, benefiting fromfirm-specific knowledge, while external successors may bring about strategic changes due totheir outside perspectives and lack of familiarity with the family culture. Various factors caneither reverse or strengthen the successors' influence on internationalization