Performance below and above aspirations as an antecedent of succession planning in family firms: A socio-emotional wealth mixed gamble approach

This study builds on the behavioral theory of the firm to show that firm performance is an essential antecedent of succession planning activities in family firms. A sample of 209 family firms reveals that (i) when family firm performance is further below historical aspirations, the level of succession planning is higher and (ii) when family firm performance is further above social aspirations, the level of succession planning is lower. Thus, this study sheds light on potential differences in family firm behavior depending on the feedback mechanism family firms use. Furthermore, integrating a mixed gamble perspective on the interaction between socio-emotional and financial wealth, this study shows that the effect of family firm performance below historical aspirations on the level of succession planning is negatively influenced when the family firm strongly focuses on the goal of family control and influence. However, this effect is positively influenced when the family firm strongly focuses on the goal of renewing family bonds through dynastic succession. Thus, this study embraces family firm heterogeneity in socio-emotional wealth and empirically substantiates that particular socio-emotional wealth dimensions differently affect family firm behavior.