OWNERS’ PERSPECTIVES ON KEY INTERNAL FACTORS FOR A FAMILY BUSINESS GENERATIONAL TRANSITION: THE CROATIAN CONTEXT

Abstract

Purpose: Generational transition presents a significant challenge for family businesses in Croatia, where most entrepreneurs are encountering succession for the first time. This study explores internal factors that influence the transition process from the perspective of family business owners.
Methodology: This research uses a mixed-methods approach, combining a questionnaire completed by 35 family business entrepreneurs with a focus group involving 6 entrepreneurs at various stages of generational transition.
Results: Most entrepreneurs recognize the importance of succession but tend to treat it as a one-time event rather than as a structured, long-term process. A significant number of them lack formal succession plans and rely on informal decision-making, shaped more by family dynamics than by strategic considerations. Furthermore, generational transition is often postponed until a “right moment”, reflecting a reactive rather than proactive approach driven by emotional ambivalence, fear of identity loss, and uncertainty about successors’ motivation and readiness.
Conclusion: Successful succession requires more than structural planning; it demands recognition of the deeply personal, emotional and cultural dimensions of a family business environment, along with more responsive and human-centered support systems. The findings show that the older generation’s delay in initiating succession is not primarily due to a lack of knowledge, but instead arises from emotional ambivalence, fear of identity loss, and uncertainty about the younger generation’s motivation. This emotional reluctance highlights a significant gap in existing support structures, which often focus on legal, financial, or educational aspects, while neglecting the psychological and relational support essential for a successful transition.