AN INVESTIGATION ON THE IMPACT OF SUCCESSION PLANNING ON ORGANIZATIONAL SUSTAINABILITY IN SELECTED SMALL-SCALE BUSINESSES IN CAMEROON

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

In economies characterized by free markets, such as Cameroon and various developed and developing nations, the role of private individuals and businesses is indispensable. They make significant contributions to the Gross Domestic Product (GDP) and generate countless job opportunities for the unemployed. Across the world, private indigenous enterprises especially small-scale businesses are universally recognized as catalysts for economic growth and essential contributors to wealth accumulation and job creation (Sharma, 2018; Ward, 2018). A small-scale business, also known as a small business or small enterprise, typically refers to a privately owned and operated business with a relatively small number of employees and lower annual revenue compared to larger corporations. However, theses businesses often serve niche markets or local communities and can include various types of enterprises such as retail shops, restaurants, consulting firms, and family-owned businesses. Similarly, they play a significant role in driving economic growth, providing employment opportunities, and fostering innovation in many industries. Managing succession stands out as a significant challenge encountered by small-scale enterprises owned by family globally (Wasim et al., 2018; Bozer et al., 2017). Less than a third of such businesses endure into the second generation, with fewer than one in 20 reaching the third (Ferrari, 2019; Wang & Jiang, 2018). A primary contributing factor to this phenomenon is the frequent selection of inappropriate heirs to lead these businesses. Additionally, ensuring the continuation of small-scale family-owned businesses  relies heavily on succession planning. Researchers like Brockhouse (2019) have emphasized its significance for business growth and stability. Nwadukwe (2018) also emphasizes  its importance for long-term sustainability. Also, Singhry (2020) highlights how crucial it is for the ongoing operation of small-scale business. Effective succession planning, as noted by Chrisman, Sharma, and Yoder (2019), ensures a smooth transition in management and ownership. Luna (2022) describes it as a methodical, long-term process that involves determining organizational goals, needs, and roles, and preparing individuals for their responsibilities. Collins (2019) suggests that succession planning facilitates seamless leadership transitions across the organization, involving steps such as identifying needs, assessing candidates, and selecting suitable individuals (Dessler, 2019). Succession planning significantly contributes to the sustainabiltiy of small-scale business. Therefore, a survey will be conducted to investigate on the impact of succession planning on organizational sustainability in selected small-scale businesses in Cameroon.

1.2 Statement of the Problem

Many nations rely heavily on small-scale businesses to bolster their GDP and employment rates, a notion widely supported by numerous authors. However, a recurring observation is that these enterprises often struggle to endure over time. In Cameroon, small- scale businesses owned by family face similar challenges to their counterparts worldwide. While official records of failed small-scale family businesses in Cameroon are scarce, it's evident that many collapse upon the passing of their first-generation founders. Even those that persist often become embroiled in prolonged legal battles stemming from management succession issues and familial discord. However, the concerning trend lies in the frequent collapse of these enterprises, particularly upon the demise of their founders, resulting in unemployment and impeding the country's economic progress. Furthermore, the primary factors contributing to this collapse are presumed to be inadequate succession planning and the reluctance of founders to relinquish control, even as they age. This issue is particularly acute in Cameroon, where many family businesses are small-scale, owner-operated enterprises run by polygamous individuals with extensive familial obligations (Akeem, 2020). Hence, it is in the light of these that the study seeks to investigate on the impact of succession planning on organizational sustainability in selected small-scale businesses in Cameroon.

1.3  Objectives of the Study

The main purpose of this study is to investigate on the impact of succession planning on organizational sustainability in selected small-scale businesses in Cameroon. Specifically, the study will;

Determine the extent to which succession planning practices are implemented in selected small-scale businesses in Cameroon.

identify the succession planning practices adopted by small-scale businesses in Cameroon

Assess the perceived impact of succession planning on small-scale businesses sustainability in Cameroon.

Investigate the challenges hindering the effective implementation of succession planning in small-scale businesses in Cameroon.

1.4 Research Questions

The following questions have been prepared for the study:

To what extent are succession planning practices implemented in selected small-scale businesses in Cameroon?

What succession planning practices are adopted by small-scale businesses in Cameroon?

How do small-scale businesses in Cameroon perceive the impact of succession planning on their sustainability?

What are the challenges hindering the effective implementation of succession planning in small-scale businesses in Cameroon?

1.5  Research Hypothesis

H0: There is no significant relationship succession planning on organizational sustainability in selected small-scale businesses in Cameroon.

Ha: There is a significant relationship succession planning on organizational sustainability in selected small-scale businesses in Cameroon.

1.6  Significance of the Study 

Small-scale businesses often play a vital role in local economies, providing employment opportunities and contributing to community development. Further insight into the management of small-scale businesses in Cameroon will be provided by this study. Better understanding of how failing businesses might learn from those that have experienced notable success in terms of sustainability is thus provided. small-scale businesses owned by families in Cameroon will be able to survive even after the founders pass away if they examine the lessons learned from other companies across the world that have managed family conflicts and succession concerns. Further more, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to the impact of succession planning on organizational sustainability in selected small-scale businesses in Cameroon.

1.7 Scope of the study 

The scope of this study is boarded on the impact of succession planning on organizational sustainability in selected small-scale businesses in Cameroon. Empirically, this study will determine the extent to which succession planning practices are implemented in selected small-scale businesses in Cameroon, identify the succession planning practices adopted by small-scale businesses in Cameroon, assess the perceived impact of succession planning on small-scale businesses sustainability in Cameroon and investigate the challenges hindering the effective implementation of succession planning in small-scale businesses in Cameroon.

Geographically, the study will be delimited to owners of small-scale businesses in Bamenda, Cameroon.

1.8 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. 

More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

 1.9 Definition of Terms

Succession Planning: is a strategic process designed to identify and develop future leaders within an organization to ensure continuity and smooth transitions in key positions. It involves assessing current talent, identifying potential successors, and implementing strategies to prepare them for future roles.

Small-scale business: also known as a small business or small enterprise, typically refers to a privately owned and operated business with a relatively small number of employees and lower annual revenue compared to larger corporations.

Sustainability: is the capacity to endure and thrive over time while maintaining balance across social, environmental, and economic dimensions. It involves meeting the needs of the present without compromising the ability of future generations to meet their own needs