Reference no: EM132707605

Question - Jack is 62 years old and feels he will work for about six more years before retiring. The business is very profitable and Jack and his wife do not need to worry about retirement income. However, Jack is concerned about what to do with the business. He has two children who work with him, Bob (31 years old) and Tim (25 years old). Jack has not asked either of them if they would want to take over the operation. He assumes they will. He also has a nephew, Richard (37 years old), working for him. All three of these relatives have been with Jack for nine years. Jack believes that any one of the three could successfully head the venture. But he is concerned about in-fighting should he favour one over the others. On the other hand, if he turns the business over to all three of them collectively, will they be able to get along with one another? Jack has no reason to believe the three cannot work things out amicably, but he is unsure. Jack has decided he cannot wait much longer to groom an heir. The major stumbling block is identifying who that person will be. Additionally, Jack really does not know anything about picking a successor. What characteristics should the individual possess? What types of training should the person be given? What other steps should be followed? Jack feels he needs to answer these questions as soon as possible. 'I know how to plan business operations,' he told his wife last week. 'However, I don't know how to go about planning for the succession of business operations. It's a whole different idea. I need some help on this one.'

Required -

1. What are five qualities or characteristics successors should possess? Identify and briefly describe characteristics you would expect to find in a successful manager of this type of venture.

2. What steps does Jack need to follow to successfully identify and groom a successor? Be complete in your answer.

3. A number of barriers to succession in privately held businesses exist. Using Table 15.1 of the text book, identify some of the key barriers.

4. What are three of the contextual aspects that must be considered in an effective succession plan? 5. If you were going to advise Jack, what would you recommend he do first? How should he get started with his succession plan? What should he do next? Offer him some general guidance on how to handle this problem.