Factors affecting family owned businesses in Durban, KwaZulu-Natal

Abstract

Family owned businesses play a vital role in the entire South African economy. The main objective of the study was to investigate the factors affecting family owned businesses in Durban, KwaZulu Natal (KZN), as well as to establish the leadership styles of management present in family owned businesses. The study also aimed to establish the effect of succession planning on these businesses and propose strategies for the sustainability of family owned businesses. The study was exploratory and qualitative research methods were used to conduct the research. Scheduled individual in-depth interviews with family owned business managers/business owners were conducted by the researcher. The respondents consisted of five businesses that were selected by the researcher around Durban; the respondents were chosen by means of non-probability sampling methods. The findings of the study revealed that there is a lack of communication between family owned businesses and the government; hence, the government has no support towards family owned businesses. The majority of the respondents indicated strategic planning and succession plans as major factors affecting the survival of family owned businesses. Other factors that the respondents highlighted include poor financial management, lack of technology, globalisation, family feuds, lack of education within the family owned businesses, lack of business experience, skill shortages and poor leadership. Based on these findings, the researcher recommended that family owned businesses need to critically evaluate all the internal and external factors before and during the progress of the business. The researcher further indicated that a clear succession plan is required, while family owned business managers need to lead by example.