This chapter will explore the methodology used in this study and the research methods informing the choice of these methods. It is a practical project of the field of study. It will address the methods of gathering information needed to answer research questions outlined in the first chapter. The section will cover population, sample-sampling procedure, instruments used to collect data, ethical issues and analysis methods.
The purpose of this study as introduced in chapter one is to determine development Interventions for effective organizational succession planning in mid-sized companies of Singapore. The focus will be to find out whether mid-sized companies in Singapore have embraced succession planning and if they have the interventions, they have put in place. The study has to be carried out within the time, space and resources available (Blaxter, et al., 1999).
There are several succession plans available for business. These include internal succession, external succession, liquidation, or dissolution. Whichever method one chooses for the business, it is important that proper strategic planning be done to find out which one is best for the firm. Among these, liquidation or dissolution should only be considered as the last option. The company should be prepared to continue despite any changes that might come up in the process of the company’s existence.
Under internal succession, a successor is found within the business. This plan is suitable for family owned businesses. In this scheme, the replacement is well known to the owner. However, there is a need for potential replacements to be scrutinized carefully so that the succession plan works perfectly and does not affect the business operations in a negative way. In such a plan, the business owner has to be careful in dealing with those members, whether employees or family members who may feel disgruntled about the succession. That may adversely affect the operations of the business and even lead to the downfall of the business. Inside tussles have a way of stalling or hurting the daily functioning of the business. They give out a weak point of the business, which competitors can use to gain a competitive advantage over it. Therefore, it is imperative that every person, especially those who hold key positions, is satisfied with the choice of a successor.
The external succession plan looks for a replacement outside the business entity. The business owner may look for acquisition or a merger. In such a situation, third parties such as brokers or investment banks can come in handy in procuring a merger or acquisition. It is vital to check for compatibility between the two businesses so that there will be a smooth transition. The owner can decide to sell the business outright. As such, all the operations of the business go to the one who purchases the business entity. However, after the sale of the business, it may be necessary that the owner of the business stay as an employee of the business for some time.
The choice to liquidate or dissolve the business may be a better option for those who intend to retire. In this case, the business owners sell off the assets of the company, pay off any liabilities, and pocket the net proceeds from the sale of the property. That might not be without some challenges, however. That should however be considered as last resort. The operations of the business should outlive the owner. That should be done given the fact that a business entity is separate from its owner. They are essentially two different entities, and the exit of one should not necessarily mean the stalling of the other. They should exist as two distinct entities, which they are.
Any change is bound to affect a business entity one way or the other. Despite legacy systems, no single person can run a business the same way as the other. Changing business environments call for a change in the way we do business. Therefore, successors have to be innovative and work towards matching business operations with the current market demands. There should also be a consideration to forecasting. The planner needs to understand that business does not operate in static environments but rather in places where changes occur every day. Innovations are being made, and new competitors are emerging. The business should be able to adapt to these changing environments and be able to deal with emerging competitors.
With the opening up of the global market, many companies are finding themselves with the challenge of a widening talent gap. Succession planning therefore should take into consideration processes that will work for both the individual and the company. Succession planning remains informal in many companies thus creating huge gaps in skills and performance. That calls for a need to invest in tools and technology for talent development within a company. Companies, which will invest in this area, will be able to survive in an expanded business field. They will view globalization as an opportunity for growth rather than a threat to their existence. The changing market scenario also means that older business models cannot work efficiently for the company. There is a need to sensitize workers and managers within the organization of the changing business trends. That will prepare them for succession and bring the company up to par with the current market needs. If the workers can work in these changing environments, they will be able to shield the company against the tremors brought about by change. The business will be able to stand the test of time and outdo others. One important aspect of business can maintain a competitive advantage over its rivals. If it can match up with the changing market trends and adapt to new technological innovations, it will be able to rise above the rest and create a niche for itself in the market.
Another major challenge in succession planning has to do with the fact that companies have to contend with technological innovations. These changes are making catching up with the current market needs an uphill task. Companies need to invest in research and to adapt to current technological innovations. That should integrate into succession planning process for the company to avoid being phased out by their competitors. Planners who fail to factor in technology are setting up their business to major threats. Eventually, their opponents no matter how insignificant they may be will be able to catch up with them or even overtake them when they adopt the new technology.
A company’s inability to motivate and retain key employees can also pose a significant challenge in succession planning (Muhoho, 2014). That may mean that potential successors may exit the organization even before getting an opportunity to drive the mission of the company. Motivation involves proper remuneration for the job done among another thing. Sometimes, the organization may not be in a position to give its key employees the same or better rates than their competitors leading to an exodus of key employees from the company. Conducive working environment and involvement in decision making also form part of employee motivation. Employees work well when they can identify with the organization and feel part of it. If they feel like outsiders, they will be looking for a way out, and this might not be useful for the operations of the business. The organization might even lose good potential successors in the process since employees will look to work in areas where they are appreciated.
Some organization may not have all the details about their employees. This limited knowledge about the employees could pose a challenge while planning for succession. Sometimes qualified persons may be left out of the succession plan. Some of these employees may be disgruntled in case someone less qualified than them is picked. The company might then end up losing good employees or even have to work with rebellion from the disgruntled employees, which might not be good for the enterprise (Muhoho, 2014). The company should keep an up to date employees database and work towards knowing their employees well. This will make it possible to assign each employee where they are best suited and be a starting point in identifying potential successors in case one is being sought from among existing employees.
Lack of awareness especially by those in positions of leadership can be a significant hindrance to succession planning. The leadership may not prepare itself adequately for succession just because it lacks the necessary information regarding succession planning. In such a case, the company may be faced with a real transition problem when the term limit of such individuals expires or in the event of their death. Some companies may have to wind up in the case of the death of their leader just because there was no succession plan in place (Muhoho, 2014).
Ineffective business practices and lack of a clear-cut vision for the business also poses a challenge to succession planning. Without a clear vision for the business, it will be difficult to put in place a succession plan and if it is there, it may not have the survival of the business in mind (Muhoho, 2014). Best business practices are the lifeline of successful businesses. These practices include having a clear vision for the business and not only establishing a business for the sake of it. A business that follows sound business practices will be able to have proper succession planning strategies and will be able to survive long in the market.
Succession planning is a vital component of any company’s strategic plan. One fails to comprehend why many companies have neglected to put in place effective succession plans despite having knowledge of the need to have one. It is observed that most leaders acknowledge that succession planning form a pivotal role in a company’s corporate plan. However, these companies are unwilling to put in place effective successive plans.
According to available research, planning for leadership succession should be part of the way a company should be managed. This process involves grooming potential leaders (Avelino & Rotmans, 2009). This process takes time and companies need to invest time and resources. Leadership succession should be entrenched in the company’s strategic plan.
There are many options available for companies conducting a succession. They can choose to have an internal successor or an external one. Whichever plan the company wants, there is merits and demerits. Therefore, a company should choose a plan that best suits its needs. However, businesses should focus more on sustenance of the business rather than winding up. Selling of the business should not also be considered as an option if a company has a proper succession plan in place. Those starting up businesses should have the future of the business of such businesses in mind before they even start.
It is possible to create successful businesses that go on for generation after generation and this requires adequate planning. Without proper planning, such businesses are doomed to failure. As the Chinese proverb states, “a person who does not worry about the future will shortly have concerns about the present.” Many companies are not planning for their succession, and therefore, executives need to think deeply about better successful plans that will ensure sustenance of their companies, so they stand the test of time and run for generations.
The future of any company lies in how effectively such a company adopts a succession plan. Failure to establish a succession plan could insinuate that the business is on its way to closure. A business that does not take an adequate succession plan may not have a future especially with the current market trends for businesses. The global opening means that many companies will have to deal with competition from not only local competitors but also international ones. Those that do not give serious time and resources to proper planning will have either to wind up or sell out. Companies will have to change their strategies on succession planning to survive in the market. Succession should be a core strategy in the business model for any company (Amburg et al. 2011).