Obstacles and Challenges of Business Succession in Central Europe

The transfer of a business to the next generation is a very important issue entailing several different social and economic influences. Failed business successions cause a loss of jobs, company knowledge and innovation potential. Creating an environment where business transfer is supported should therefore be of major importance for company owners and for policy makers. For better succession planning it is important to know the obstacles and challenges associated with business succession. Especially Eastern European countries face many challenges as these countries have no experience in business succession. To analyze the obstacles and challenges of business succession in Central Europe, three Eastern countries (CZ, SK and PL) with no experience in business succession were analyzed and compared to Austria where half of family businesses are at least in their second generation. Literature analysis and two focus groups with stakeholders (local public authorities and private entrepreneurs) were undertaken in all four countries. The results show that one of the main obstacles and challenges for business succession is the absence of a successor. Especially in Austria, this is recognized as the main obstacle. The Eastern countries (CZ, SK and PL) face different challenges to Austria that can mainly be explained by the lack of experience and supporting schemes for business succession. Especially knowledge and awareness related obstacles play an important role in Eastern European countries. Business succession is an individual process involving many emotions; therefore psychological and social issues are perceived as a huge obstacle in each analyzed country. Austria has a lot of experience with successful business transfers and offers various support mechanisms. However, many similar problems to Eastern countries were detected. A change of the business succession environment and the raising of awareness of the topic is therefore necessary in all investigated countries.