The father, the son and the refreshed spirit : strategic renewal after family business succession in the context of the textile, clothing, leather and footwear industry

Abstract

This study describes the strategic renewal of family business after succession in the textile, clothing, leather and footwear industry (T/C) in light of three examples. Family firms often have an individual approach to developing capabilities for new generations. A turbulent environment, internal resources and the capabilities of the management all have an impact on strategic decisions. The research is a multiple case study of three cases. In each of the companies the succession process, the different roles of the successor, the critical incidents and how they relate to the succession are described. In addition the capability for renewal, renewal process and its effects are introduced. All the firms are situated in the same geographical area, where small family firms are the main source of employment. Data was collected by open-ended, thematic interviews, phone interviews and corporate analyses made from annual reports by Finnvera Oyj. The first interview for the research was made in May 2002 and the latest phone calls in November 2004. The researcher interviewed the successor and the incumbent of each company. The interviews also included space for free conversation. Following the interviews, several short phone discussions have taken place with the successor when more detailed information was needed. The collapse of business with the Soviet Union, and the strong currency of the Finnish mark at the end of the 1980’s, and in the beginning of the 1990’s, changed the Finnish textile and clothing field completely. The last and perhaps the worst critical incident was the devaluation of the Finnish mark in 1991. After this in two of these cases the predecessors had neither the motivation nor the energy to continue. This was the trigger for the succession and the renewal process. Today the scope of the market is more concentrated and focuses on fewer customers. Specific strategies used in the Finnish T/C industry are design and delivery flexibility as differentiation, and responding with speed and dependability being the competitive advantages. Anyhow, Finland has new global problems to face in the enlarged EU market. According to the corporate analyses it can not be said that all of the companies had succeeded in their strategies, but they are successful in so far as the business still exists. They all had different strategies. A new product-line saved one of the companies and enabled growing export. The other started to divest and developed new marketing strategies, gaining new market areas. All the successors had been employed in the company and with the family since a young age, even from childhood. They had good technical skills and some of them also had experience in the marketing field. The potential for renewal depends on the person, but its roots lie in the family firm’s history. The ability and the agility for renewal after succession depend on the entrepreneurial skills and the resources of the family firm built in the past. The managerial and paternal support of the incumbent and the family also play their part. Essential factors in entrepreneurial capability and commitment are motivation, culture and values of the family firm. In many ways the present owner could have chosen an easier way to earn a livelihood, but the belief and pride in the family name and the independence in decision-making can be seen in the interviews.

Liisa Niemi tutki kolmen pienen tekstiili-, vaatetus-, nahka- ja kenkäteollisuuden alan perheyrityksen strategista uudistumista sukupolvenvaihdoksen jälkeen.- Parhaiten menestyneiden yritysten strategiavalinnoissa ratkaisevana tekijänä on eri vaihtoehtojen arvioiminen. Valittua strategiaa arvioidaan ja tarvittaessa kyseenalaistetaan kaiken aikaa. Valinnat suhteutetaan perheen tulevaisuuden näkemyksiin ja resursseihin. Näin strateginen uudistuminen on jatkuva osa toimintaa. Ajattelun tuoreus on uudistumisen suurimpia haasteita. Sukupolvenvaihdoksen jälkeen on uuden sankarin aika, Niemi kuvaa.Niemi selvitti, kuinka sukupolvenvaihdos pienessä perheyrityksessä toteutettiin. Organisaationa perheyritys on haastava, sillä perhe-, omistus-, johtamis- ja yritysroolit menevät monin osin päällekkäin.