International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR SUCCESSION DILEMMA: POWER OF PERCEPTION.
TRANSITION
COURAGE.
AND ASSUMING THE HELM
Nikolas Wongso1.
Metta Padmalia2 Universitas Ciputra Surabaya1,2 Email: nwongso01@student.
id1* metta.
padmalia@ciputra.
Corresponding author: Metta Padmalia Abstract:
Succession process is one of the greatest challenges involved in the continuance of family businesses through generations.
Incumbent reluctance to step down is one of the most prevalent challenges, which can prevent successors from replacing incumbents accordingly.
This study aims to examine the impact of perceived business performance on successor willingness to step in, the impact of successor willingness to step in on incumbent willingness to step down, and the mediating role of successor willingness in the relationship between perceived business performance and incumbent willingness to step down.
This study utilizes the quantitative approach with the data collected through 182 respondents that include incumbents, successors, or a combination of the two in family businesses.
Data analysis was carried out using the Partial Least SquaresStructural Equation Modeling (PLS-SEM).
Results indicate that perceived business performance has a significant, positive impact on successor willingness to step in.
Additionally, successor willingness has a significant impact on incumbent willingness to step down.
Analysis establishes successor willingness to step in to mediate the relationship between perceived business performance and incumbent willingness to step aside.
These findings can be helpful to enhance succession planning, leadership replacement strategies, and sustainability of family businesses.
Keywords: Family Business.
Perceived Business Performance.
Successor Willingness to Step In.
IncumbentAos Willingness to Step Aside.
Succession Submitted: 2025-05-15.
Revised: 2025-05-27.
Accepted: 2025-06-20 Introduction Indonesia ranks 21st globally in terms of the percentage of entrepreneurs who continue their family businesses, with the figure at 31%(Ridwan, 2.
This shows just how vital family-run enterprises are to the country's economy.
On a global scale, the 500 largest family businesses play a major role in supporting a sustainable workforce, employing over 25.
1 million people worldwide (Oinaala et al.
, 2.
Although such a contribution exists, numerous family enterprises experience severe issues with succession processes that jeopardize the continuation of the same.
These become more sophisticated due to incumbent reluctance to relinquish power and the successor's involvement to maintain the continuity of the enterprise (Kristanti & Nuradhi, 2.
As per the 2022 Global NextGen Survey of PwC, 57% of next-gen successors reported that current generation leaders don't want to retire, while 39% reported that the current International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 354 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR generation resists change in the family firm.
It is indicative of the lack of leadership transition Moreover, only 28% of the successors are engaged in the internal business activities, and only 19% of the companies surveyed in the 2023 EY and University of St.
Gallen Family Business Index are under the age of 40 with members at the board of the company.
These figures indicate that succession processes remain suboptimal, with the majority of the family enterprises getting caught in unanticipated leadership changes.
One of the succession problems is the incumbent reluctance to give up the reins to the next Most Indonesian family businesses fail to have mature succession planning.
Preparing successors' willingness to take over is the most important aspect, whereas lack of willingness can result in deteriorated performance in the business (Sari et al.
, 2.
Therefore, successor willingness to step in is an important element of succession.
While previous studies have acknowledged the complexity of family business succession as a critical challenge for intergenerational continuity, there remains a gap in understanding the psychological dynamics that underpin the willingness of family business leaders to transition Existing literature, such as Habash and Baidoun .
, emphasizes how strong financial and operational performance influences the next generation's desire to take over the family business.
However, most research has yet to explore the nuanced role of successor willingness as a key mediating factor that bridges perceived business performance and incumbent readiness to step aside.
This study addresses this gap by proposing a conceptual model that frames successor willingness to step in as a critical pathway, rooted in Identity Theory, that explains how successors' perceptions of business success fuel their leadership identity, ultimately encouraging incumbents to relinquish control.
Furthermore, this research contributes to the existing literature by examining succession dynamics in Indonesian family businesses, an important yet underexplored context in family business studies.
Drawing on this paradigm, an issue of prime importance to be determined is how perceived firm performance impacts successor willingness to assume office, mediated through incumbent willingness to step aside.
Literature Review The appropriate Grand Theory that applies to succession dynamics in family businesses is Identity Theory.
This theory describes the manner in which individual identity is constructed through the jobs that one performs, and how identity, in turn, guides individual motivation and behavior under such situations (Stets & Burke, 2.
As an identity theory.
Identity Theory is paramount to explain the incumbents' emotional attachment to the position of company Stets and Burke .
assert that identity attached to a job inspires individuals to maintain the status quo, regardless of the call to change that may be needed at some point.
Family business incumbents identify themselves with the success and longevity of the enterprise that they lead.
This presents incumbents with an inner barrier to pass the reins to successors, fearing irrelevancy, loss of purpose, and sense of possession gained through the The relationship between perceived business performance and successor willingness to step in is critical to ensuring the continuity and success of the family business.
If successors perceive that the business is doing well, it can inspire them to get more involved.
This happens because they see the possibilities and success that can be achieved to continue the family tradition.
Empirical research indicates that the motivation to take over the family business is highly determined by the perception that the successor has regarding the success of the business (Gagny et al.
, 2019.
Kiwia et al.
, 2.
As successors perceive the family business to be International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 355 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR successful, this inspires them, along with the motivation to take it forward into the future.
Habash and Baidoun .
support this perception, demonstrating that family business financial and operational performance is the primary determinant of the willingness of the successors to assume the position.
The research indicates that well-performing enterprises are more attractive to the successors, as they present greater chances of growth, financial returns, and stability in the long run.
Additionally, what actually propels a successful succession is the Successor Willingness to Step In.
This goes beyond technical skills it's shaped by emotional and motivational elements, like how confident the successor feels, their readiness to embrace change, and the quality of their relationship with both the incumbent and other family members (Habash & Baidoun, 2.
According to Identity Theory, successors who strongly associate themselves with future leadership roles within the family business are more inclined to accept and pursue leadership Gagny et al.
suggest that successors perceiving their family firms as thriving are more driven to develop their identity as the next generation of leaders.
Similarly.
Habash and Baidoun .
reported that 63% of Palestinian incumbents holding higher education credentials showed greater openness to succession, believing that formal education enhances the successorAos identity formation and readiness.
Moreover, incumbent willingness to step aside is shaped by their confidence in the successorAos abilities, as well as the endorsement of family Lee et al.
highlight that a supportive founder-successor relationship facilitates smoother power transitions.
Their findings indicate that incumbents are more willing to relinquish control when successors exhibit strong leadership intentions and competencies.
Therefore.
Identity Theory, supported by the findings of Habash and Baidoun .
, provides a strong theoretical and empirical foundation for explaining how perceived business performance influences successor willingness to step in, which is in turn mediated by the incumbentAos readiness to step aside.
This study contributes to academic discussions on family business succession and offers practical insights for designing effective leadership succession Perceived Business Performance dan Successor Willingness to Step In Perceived Business Performance is an important factor influencing the successor's willingness to step in to become involved in the family business.
This perception includes how the successor assesses the financial success, operational stability, and potential for future business growth.
Previous research has shown that successors who view the family business as an entity that is successful not only economically but also has added value are more motivated to take over (Garcia et al.
, 2.
Furthermore, successors who are given the opportunity to be involved in operational activities from the start tend to form a strong sense of belonging to the business, which then strengthens their drive to take on a more significant role (Kallmuenzer et al.
, 2.
Positive perceptions of business performance are also often influenced by the educational background and experience of successors.
Those with relevant education and hands-on experience in the family business typically exhibit higher levels of confidence in their managerial capacity, which in turn encourages Successor Willingness to Step In (Kiwia et al.
, 2020.
Skrbkovy et al.
Building positive perceptions of business performance is therefore an important foundation for successors to feel confident in taking over leadership.
This emphasizes the importance of transparency and active involvement of successors as part of an effective succession strategy.
International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 356 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR H1: Perceived Business Performance has a positive effect on Successor Willingness to Step In.
Successor Willingness to Step In dan IncumbentAos Willingness to Step Aside Successor motivation and confidence to lead directly influences Incumbent Willingness to Step Aside.
Most of the incumbents have a solid identity attachment to their leader status that makes them reluctant to give it up (Varhegyi & Jepsen, 2.
But the successor's proactive intrusiveness in showing that they are ready and that they care can help assuage any reluctance from the incumbent.
But the successor's proactive intrusiveness in showing that they are ready and that they care can help assuage any reluctance from the incumbent, as trust in successorsAo abilities and intentions plays a crucial role in shaping the incumbentAos willingness to relinquish control (Gagny et al.
, 2.
Intergenerational trust and emotional support also provides a key role.
Good reporting or strong relationships built on the confidence of open communication often translate into an environment that supports the leadership transition process.
Successors who believe that the incumbent supports them exhibit higher confidence with decision-making, which reinforces the incumbent's willingness to pull back (Kiwia et al.
, 2.
Additionally, the relationship between successor willingness to step in and incumbent willingness to step aside is both dynamic and mutually reinforcing.
According to Oudah et al.
, this reciprocal interaction also strengthens the successorAos dedication to sustaining the family business.
Essentially, successor willingness to assume leadership and incumbent readiness to relinquish control reinforce one another.
Understanding these interconnections can serve as a critical foundation for developing more effective succession programs and fostering intergenerational communication.
H2: Successor Willingness to Step In has a positive effect on Incumbent's Willingness to Step Aside Perceived Business Performance dan IncumbentAos Willingness to Step Aside dengan Successor Willingness to Step In sebagai mediator In the context of family business succession, the relationship between Perceived Business Performance and Incumbent's Willingness to Step Aside may be mediated by Successor Willingness to Step In.
A positive Perceived Business Performance may increase the successor's readiness to take over, which in turn affects the incumbent's attitude to relinquish control.
Research indicates that when successors perceive the business as performing well, their confidence increases, motivating them to take a more active role in managing the company (Nwuke & Adeola, 2.
This heightened confidence and motivation make successors more inclined to take over leadership responsibilities (Kamener et al.
, 2.
Successor Willingness to Step In serves as an important mediator in leadership transitions.
When successors have high confidence in the performance of the business, they tend to feel more prepared and eager to take over, which may reduce the incumbent's uncertainty and concerns about the future of the firm (Nwuke & Adeola, 2.
In this regard, successors' positive attitudes toward business performance may strengthen their desire to engage in the leadership process, which in turn may influence incumbents to be more willing to relinquish control (Kamener et al.
, 2.
When successors demonstrate readiness and willingness to take over, incumbents feel more confident to step down, creating an environment more conducive to a successful leadership transition (Kamener et al.
, 2.
In conclusion, the willingness of successors to step in is key in mediating the relationship International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 357 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR between perceptions of business performance and incumbents' willingness to step down.
Successors' positive perceptions of business performance can increase their perceived readiness to take over, which in turn, enhances the incumbents' willingness to relinquish their control.
also underscores the need to establish trust and good communication in the family business succession process for the continuity and success of the company.
H3: Successor Willingness to Step In mediates the relationship between Perceived Business Performance and Incumbent's Willingness to Step Aside.
Research model Based on the literature review and hypotheses that have been compiled, the research model can be seen in Figure 1 below.
Figure 1.
Research Model H1: Perceived Business Performance has a positive effect on Successor Willingness to Step In H2: Successor Willingness to Step In has a positive effect on Incumbent's Willingness to Step Aside H3: Successor Willingness to Step In mediates the relationship between Perceived Business Performance and Incumbent's Willingness to Step Aside.
Research Methods This research utilized primary data collected firsthand from respondents, eliminating the use of intermediaries.
Data collection was executed through questionnaires, employing a Likert scale to assess individuals' perceptions, attitudes, and opinions regarding the studied The Likert scale provided five options: 1 = strongly disagree, 2 = disagree, 3 = somewhat agree, 4 = agree, and 5 = strongly agree (Pratiwi et al.
, 2.
The research sample was taken using Hair's formula.
According to Hair, a very large sample size has the potential to hinder researchers from obtaining optimal analysis results.
Therefore.
Hair recommends having a sample size of at least 5Ae10 observations for each parameter (Hair et al.
, 2.
In this research model, 10 out of 10 parameters were used, with 11 indicators multiplied by 10, so that in this research model, 110 samples were randomly selected from potential successors of family businesses.
Sampling Criteria:
Actively involved in the family business Middle to upper income Minimum age of 18 Variables and Operational Definitions This study will measure three main variables, as follows:
The dependent variable is Incumbent's Willingness to Step Aside (Y) The independent variable is Perceived Business Performance (X) International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 358 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR Mediating variable is Successor Willingness to Step In (M) The operational definitions employed in this study are detailed in Table 1.
Table 1.
Operational Definitions of Variables Variable Variable Definition Indicator Perceived Business Perceived Business Performance 1.
My business profits have Performance (X.
refers to the financial and increased significantly in operational attractiveness of the the last 12 months family business as perceived by the 2.
Customers have provided successors, which includes elements positive such as profitability, family wealth regarding the products I Businesses that perform well 3.
Business operating costs that have decreased without successors will continue the legacy, compromising while poor performance can hinder quality succession (Habash & Baidoun, 4.
Business increased significantly Successor willingness to step in (M) Successor willingness to step in 1.
I am driven to increase my refers to the successorAos desire and involvement in the family enthusiasm to undertake leadership businessAos in the family business.
This activities.
readiness is recognized as a crucial 2.
I believe I possess the precursor for successful succession capability to take on the and is influenced by perceptions of role their leadership capability and effectively.
commitment to preserving the 3.
I am willing to learn from family legacy (Habash & Baidoun, current leaders to gain deeper understanding of future responsibilities.
participating in the family businessAos IncumbentAos willingness to step aside (Y) IncumbentAos willingness to step 1.
The incumbent is willing aside signifies the current leaderAos or to engage in discussions founderAos preparedness to surrender about succession planning control and delegate authority to the with me.
This readiness is crucial 2.
The incumbent provides for facilitating a seamless succession support to help me prepare and serves as a key factor in ensuring for assuming leadership of an effective leadership transition the business.
(Habash & Baidoun, 2.
The incumbent has started transferring operational International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 359 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR control of the business to The key responsibilities to me.
Results and Discussion Result The research employed a quantitative approach to systematically investigate the relationships among variables through numerical data collection and analysis.
As noted by Priadana and Sunarsi .
, this method facilitates objective measurement of phenomena using statistical, mathematical, or computational techniques.
Data collection was carried out via questionnaires, ensuring the results were measurable and empirically verifiable.
The study aims to assess the influence of perceived business performance on successor willingness to step in, with incumbent willingness to step aside serving as a mediating variable.
Data analysis utilized Partial Least Squares-Structural Equation Modeling (PLS-SEM).
According to Sarwono .
, this method evaluates model validity and minimizes measurement error through Confirmatory Factor Analysis (CFA).
The study involved 182 respondents.
Data Analysis and Research Results Testing Outer Model with SmartPLS 4.
Figure 2.
Research Measurement Model Bootstrapping Table 2.
Sample Characteristics Respondent demographic characteristics are summarized in Table 2.
Respondent Characteristics Category Quantity Percentage Gender Male Female 2nd Generation 3rd Generation 4th Generation Successor generation in family business International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 360 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR Tabel 3.
Convergent Validity Variabel
Loading Factor
AVE
Keterangan Valid Valid Valid Valid X1.
X1.
Valid X1.
Valid Valid Valid Valid Indikator Successor Willingness to Step In Perceived Business Performance IncumbentAos Willingness to Step Aside Valid Valid Source: SmartPLS 4.
0 Program Output .
The results of the convergent validity test in Table 3 indicate that all indicators achieved loading factor values above 0.
70 and an average variance extracted (AVE) exceeding 0.
Consequently, the research instrument satisfies the requirements for convergent validity.
Tabel 4.
Discriminant Validity (Fornell LarckerAos Criterio.
Successor Willingness to Step In (M) Successor Willingness to Step In (M) Perceived Business Performance (X.
IncumbentAos Willingness to Step Aside (Y) Perceived Business Performance (X.
IncumbentAos Willingness to Step Aside (Y) Source: SmartPLS 4.
0 Program Output .
As shown in Table 4, the discriminant validity test using the Fornell-Larcker criterion confirms that the model meets discriminant validity standards.
This is demonstrated by the square root of AVE surpassing the correlations between constructs, with all values above 0.
International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 361 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR Tabel 5.
Construct Reliability Variable Cronbach's Alpha Composite Reliability Description Successor Willingness to Step In (M) Reliable Perceived Business Performance (X.
Reliable IncumbentAos Willingness to Step Aside
(Y)
Reliable Source: SmartPLS 4.
0 Program Output .
Table 5 presents the reliability test results, showing that each variableAos CronbachAos Alpha and Composite Reliability values exceed 0.
70, indicating acceptable internal consistency.
Tabel 6.
Determination Coefficient (R-Squar.
R-Square R-Square Adjusted Excitement Affective Response (Y) 0.
Source: SmartPLS 4.
0 Program Output .
Table 6 reports an R-square value of 0.
415, implying that the Excitement Affective Response variable accounts for 41.
5% of the variance in the dependent variable.
However, as Widarjono .
R-square alone does not fully determine model success, since other factors not included in the model explain the remaining variance.
Tabel 7.
Path Coefficient Test
Relationship
between variables Original (O) Sample (M) Standard
(STDEV)
T statistics (|O/STDEV|) Description Perceived Business Performance (X.
> Successor Willingness to Step In (M) Accepted Successor Willingness to Step In (M) -> IncumbentAos Willingness to Step Aside (Y) Accepted Source: SmartPLS 4.
0 Program Output .
Table 7 shows the path coefficient test conducted using the bootstrapping method via SmartPLS.
A relationship is considered significant if the t-statistic surpasses 1.
96 and the p- International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 362 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR value is below 0.
05 (Ghozali, 2.
Tabel 8.
Specific Indirect Effects Test
Relationship
between variables Original (O) Sample (M) Standard
(STDEV)
T statistics (|O/STDEV|) Description Perceived Business Performance (X.
> Successor Willingness to Step In (M) Accepted Source: SmartPLS 4.
0 Program Output .
Table 8 presents the specific indirect effect analysis conducted through bootstrapping with SmartPLS.
The findings indicate that the indirect relationship between perceived business performance and incumbent willingness to step aside, mediated by successor willingness to step in, is statistically significant, as evidenced by a p-value below 0.
Discussion Perceived Business Performance and Successor Willingness to Step In The findings of this study highlight the role that Perceived Business Performance .
erceived business performanc.
has on the decision of the successor to take over the leadership role .
he willingness of successors to take over the rol.
, which is evident from the path coefficient value of 0.
546 with a p-value of 0.
This finding is consistent with the study by Mokhber et al.
in which a significant relationship had been identified where good performance stimulates successor involvement, they said successors are often attracted to family businesses in good standing, as they notice the potential for business sustainability and Investigating Palestinian family firms.
Habash and Baidoun .
argued that both financial and operational firm performance shape the willingness of the incumbent to exit the business since financially feasible businesses attract successors.
As servitudes identity theory show, the fact that family business is a successful and viable entity for the successors increases the identity that they can be a family business successor.
According to Gagny et al.
, successors who perceive strong business performance in their family firms are more motivated to claim their identity as future top leaders.
Similarly.
Habash and Baidoun .
found that 63% of Palestinian incumbents with higher education were receptive to succession, as they believed that formal education enhanced successor readiness and facilitated the succession process.
Successor Willingness to Step In and IncumbentAos Willingness to Step Aside Successor willingness to step in was shown to have a significant impact on incumbent willingness to step aside, with a path coefficient of 0.
644 and a p-value of 0.
This finding aligns with the research by Lee et al.
, which emphasizes that a strong relationship between the founder and the successor can facilitate a smoother transition of leadership.
Their study also indicated that incumbents feel more assured in transferring control when successors demonstrate enthusiasm to assume leadership.
Additionally.
Habash and Baidoun .
found that the successorAos desire to become involved in the family business .
ean score of 4.
International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 363 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR significantly influences Palestinian entrepreneursAo willingness to step down, particularly when the successor possesses sufficient leadership capabilities.
According to identity theory, successors who possess a strong desire to lead the family firm also tend to develop a robust leadership identity.
As successors refine their entrepreneurial identity, they are better positioned to overcome obstacles and pursue opportunities, allowing the family business to remain resilient and flourish across generations (Kiwia et al.
, 2.
This is consistent with the findings of Habash and Baidoun .
, who state that successors with a heightened sense of identification as future leaders are more inclined to embrace their leadership roles and contribute to the ongoing viability of the family business.
Role of Mediation in Successor Willingness to Step In The results of this study indicate that successor willingness to step in mediates the relationship between perceived business performance and incumbent willingness to step aside, with a p-value below 0.
This finding aligns with Dawson et al.
, who observed that successorsAo active involvement in the family business significantly influences the incumbentAos decision to relinquish control.
Their research revealed that a high level of successor commitment to the family enterprise facilitates a smoother leadership transition, making it easier for the incumbent to step down.
Identity theory, as a theoretical foundation, posits that successors who develop a strong leadership identity within the family business are more likely to be motivated to participate in the succession process.
Gagny et al.
argue that successors often become integral to the family business from an early age, allowing their leadership identity to form through ongoing exposure and involvement.
Habash and Baidoun .
further identified successor willingness to take over as a key mediating factor linking successor qualifications and incumbent willingness to relinquish control.
Their study showed that successors who possess adequate leadership competencies and demonstrate strong readiness to lead enable incumbents to feel more confident in transferring authority.
These findings are further reinforced by Lee et al.
, who emphasize that a positive relationship between the founder and the successor plays a crucial role in easing the transition of power.
Their research revealed that incumbents gain greater confidence in transferring control when successors exhibit strong motivation to assume leadership.
This dynamic influences not only the successorAos level of preparedness but also shapes how the incumbent approaches and participates in the succession process.
Research Implications The results of this study provide important insights for incumbents and successors of family businesses in Indonesia, particularly in the context of successor readiness and leadership The findings indicate that positive perceptions of business performance significantly encourage successors to take over roles in family businesses.
Therefore, it is important for incumbents to build a positive perception of performance in the eyes of successors, including through information disclosure, involving successors in strategic activities, and achieving measurable business performance.
Incumbents should ensure that successors are familiarized with different facets of the business at an early stage.
This can be achieved through mentoring, participation in decisionmaking, and assigning strategic projects.
When successors perceive that the family business is thriving and they possess the required skills, their enthusiasm to maintain the family business will grow.
International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 364 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR In addition, the result that the willingness of successors in office affects the willingness of the incumbents to go down indicates the significance of cultivating mutual trust and sound emotional connections among the two generations.
Incumbents should view the preparedness of successors as a positive sign to transfer responsibilities gradually.
This is possible by creating a formalized plan for succession and allowing successors to step into the new rolealbeit with some handholding by the prior owner.
Even while the succession process is known to be fraught with emotional dynamics and opposition to the new order, this research highlights that perceived good performance of the business and the successor-readiness are prominent factors leading to a more seamless " The intergenerational balance and dialogue should be preserved to minimize the conflict and ensure a lasting renewal of leadership.
This research offers meaningful contributions to the body of knowledge on family business succession by validating the mediating role of successor willingness in the relationship between perceived business performance and incumbent readiness to step aside.
Applying identity theory, the study elucidates how successorsAo leadership identities are shaped by perceptions of business performance and elder generation support.
Beyond academic contributions, the findings provide practical implications for practitioners by uncovering the psychological and managerial dynamics underpinning family business succession.
Conclusion This study concludes that perceived business performance exerts a positive and significant influence on successor willingness to step in.
Higher successor perceptions of family business performance correlate with increased readiness to assume leadership.
Additionally, successor willingness to step in significantly and positively affects incumbent willingness to step aside, suggesting that successor preparedness can encourage incumbents to relinquish their leadership Additionally, this study demonstrates that Successor Willingness to Step In plays a significant mediating role in the relationship between Perceived Business Performance and the Incumbent's Willingness to Step Aside.
In simpler terms, positive perceptions of business performance do not directly lead incumbents to step down.
instead, they influence the successors' willingness to assume the role.
This highlights the critical role of successors in the family business succession process and indicates that the successful transition of leadership is largely determined by the successors' psychological readiness and motivation.
Therefore, family business owners need to pay special attention to how business performance perceptions can be positively built in the eyes of successors, as well as creating an environment that encourages their active involvement from an early stage.
Steps such as information transparency, operational involvement, and training and mentoring can be important strategies to support the success of intergenerational succession in family businesses.
Recommendations and Limitations The limitations of this study are that the sample used was a general sample of family business practitioners, not separated according to business scale .
small, medium, larg.
and industry characteristics.
Thus, the findings of the present study may not provide an extensive account for particular differences between succession dynamics in different industrial branches or at other business levels.
Further, this study is only focused on one mediation model, which is Successor Willingness to Step In, and does not include other contextual variables like family cultural International Journal of Economics.
Business and Accounting Research (IJEBAR) Page 365 International Journal of Economics.
Business and Accounting Research (IJEBAR) Peer Reviewed Ae International Journal Vol-9.
Issue-2, 2025 (IJEBAR) E-ISSN: 2614-1280 P-ISSN 2622-4771 https://jurnal.
stie-aas.
id/index.
php/IJEBAR values, trust between family members and the incumbent's leadership style to explain why the incumbent is willing to resign.
Based on these findings, several suggestions for further research are presented below:
Research might consider other mediators and moderators .
, intergenerational trust, emotional attachment, or family social support in the succession proces.
Explore how organizational culture or cultural values of different business families to incorporate the richness of cultural behaviors, especially in Indonesia that has a rich cultural This study suggests that succession be explored in other sectors by utilizing a cross-industry comparative lens, to provide insight into why succession can be managed/occur differently in particular industrial contexts.
Besides quantitative methods, qualitative or mixed methods could also be used to further the understanding of the psychological and relational dynamics among different family members that occur during succession process.
References