Abstract:

The characteristics and importance, including the antecedents to performance, of small to medium-sized family owned firms to respective economies is widely known in business literature. While many have studied factors which determine the business performance of family-owned firms, none has investigated how succession issues (ranging from authoritarian owner, communication problem with siblings, incompetencies, motivation to succeed, differences in opinions and decision-making power)  and succession experience  on part of second or third generation owner (2GO/ 3GO) could affect the links to the performance of such firms. The purpose of this paper is to reaffirm various factors influencing family business performance among sixty family-owed firms situated in Northeastern of Peninsula Malaysia, and establish succession issues and experience as the potential mediators which are contributive to the business well-being. The main data source for the study was self-administered surveys of sixty 2GOs or 3GOs, of three major races (Malay, Chinese and Indians) in Kelantan, Malaysia.