Old money in the West: Succession processes and the persistence of family business dynasties in the Western world

Family business dynasties encounter more complex succession processes than do general family businesses because their succession involves an extended family beyond incumbents and successors, which includes in-laws and members from multiple branches of the family. Although the institutional view argues that market-based transactions should make family-based successions less relevant and thus that family business dynasties should disappear in developed countries, we still observe prominent family business dynasties in the Western world today. Therefore, we explore how family business dynasties persist by managing succession processes with an extended network of family members under such an institutional setting. Based on the historical case studies of six family business dynasties, we differentiate succession processes into three stages-variation in the pool of successors, selection of successors, and retention of nonsuccessors after succession-and distinguish the underlying forces within and outside the family domain. These succession processes depend on the dynamics among extended family members, including grandchildren, in-laws, and nonsuccessors, as well as external parties. A family business dynasty is more likely to be sustained in the case of effective variation, selection, and retention of family ties across multiple generations.