Abstract
A succession plan is essential for an organisation's longevity, stability, and sustainability. The absence of a succession plan may prove detrimental when key leaders exit an organisation through either a planned or unplanned withdrawal, leaving other members vulnerable. Literature has shown that organisations must prioritise succession plans to avoid business failure. Small, Medium and Micro Enterprises (SMEs) are the most significant contributors to the labour force, and their economic importance cannot be underestimated. Given the integral role of SMEs in a country's economy, succession planning for SMEs remains a pressing corporate governance issue. Construction companies are typically owned by technically inclined individuals operating within an industry where precision and expert knowledge are paramount. In such an industry, a lack of succession planning may lead to business failure, increasing unemployment and crime rates, social instability, and structural inequalities.
The study examines the importance of succession planning for SMEs in the construction sector by investigating how management teams engage in succession planning practices to achieve business sustainability. A qualitative research methodology was applied, and data was collected using in-depth, semi-structured interviews with business owners and executives of 12 construction companies. Thereafter, data was analysed using the ATLAS.ti qualitative analysis software. When comparing the study findings with the priorities of business founders, it becomes evident that business founders are primarily oriented towards business expansion and profit maximisation, while the research emphasises the need for more formalised and structured strategic succession planning activities. This study concludes that business founders connect succession planning with negative connotations linked to estate planning, leading to resistance to leadership buy-in. Other factors that negatively affect succession planning initiatives include a need for more effort to implement training and skills development programmes, misaligned organisational goals with succession plans, and an inability to pursue succession plans aligned with corporate culture. The study further explores and presents limitations, recommendations, and suggestions for future studies. s
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Keywords: organisational culture, skills development, SME, South Africa, succession planning, sustainability, training