A study of the factors influencing the laws and management of family business succession in Saudi Arabia

  • Riyadh Alshaeel

    Student thesis: Doctoral Thesis

    Abstract

    The main purpose of this study is to explore, the family business in the Saudi Arabian context and to identify the factors that underpin the succession of the business. Although family businesses have an important role in the economy, the majority of Saudi family firms appear to be failing to achieve intergenerational succession to maintain the businesses in the future.
    The goal of this study is to focus on the way the continuity of the family business is affected by transferring the power and management of the company to the next generation, by investigating the factors that might relate to the succession process. It also aims to explore the role of the founder, and to recognise the influence of the next generation preparation plan regarding the succession. This qualitative study was carried out through semi-structured, in-depth interviews, conducted with the founders and the next generations of Saudi family businesses.
    The findings show that there is a succession problem facing Saudi family businesses. The founder has extraordinary power, which derives from social culture. However, the succession plan and preparing the next generations is one of the main roles for the founder. In addition, the founder’s management styles and his/her awareness of the importance of strategic planning to align the family and business goals, the relationships between family members, the conduct of Islamic values and beliefs, and the successor preparation plan were all found to significantly influence the prospects for family business continuity.
    This study will add more literature on family business succession in the Middle East, and, more specifically in Saudi Arabia and also makes a significant contribution to knowledge in practice. The implications of this study are that family businesses in Saudi Arabia should prepare a succession plan from an early time, to avoid the collapse of the company in the future. Moreover, the application of corporate governance and the formulation of regulations that guarantee the rights and justice between partners contribute to the stability and sustainability of the company. Furthermore, the separation of the management from the ownership, and implementation of strategic planning for the company's development and optimisation of the resources to compete in the market by attracting managerial talent from outside the family business are all important factors in ensuring continuity.
    The thesis also helps to provide a clear insight into the family businesses that constitute the majority of the private sector in Saudi Arabia, to improve the understanding of overseas investors wishing to establish a partnership with companies of this type.
    Date of AwardMay 2016
    LanguageEnglish
    Awarding Institution
    • Abertay University
    SupervisorMohamed Branine (Supervisor)

    Cite this

    A study of the factors influencing the laws and management of family business succession in Saudi Arabia
    Alshaeel, R. (Author). May 2016

    Student thesis: Doctoral Thesis