The relationship of self-efficacy and entrepreneurial intentions on the commitment of the next generation in family-owned agribusinesses

Abstract

Orientation: Poor intergenerational survival rate of family-owned agribusinesses is a matter of serious concern in family business literature. Ageing population of senior leaders and a lack of commitment from the next generation are often cited as the main contributing factors.

Research purpose: The purpose of this research was to investigate the relationship between cognitive factors (self-efficacy and entrepreneurial intentions) and commitment of the next generation in family-owned agribusinesses.

Motivation for the study: Family business literature is extensive regarding the phenomena of high failure rate amongst family-owned business, and agribusinesses are not immune to this phenomenon. However, previous research has focussed more on situational factors that relate to ‘contextual’ environment surrounding the individual, whilst little research has focussed on ‘cognitive’ (person-related) factors.

Research design, approach and method: Following a positivistic paradigm, a cross-sectional design was followed using a quantitative self-administered questionnaire through multi-stage probability sampling, resulting in a sample of 125 next-generation individuals in family-owned agribusinesses. The data was subjected to an exploratory factor analysis and Pearson’s correlation test.

Main findings: The results revealed that there was a significant relationship between self-efficacy, entrepreneurial intentions (person-related factors) and commitment of the next generation. Furthermore, the relationship between self-efficacy and entrepreneurial intentions was also found to be positively significant.

Practical/managerial implications: A committed, willing and ready next generation is a prerequisite for effective succession in family businesses, given the expected exodus of a large cohort of senior leaders. Therefore, succession planning, especially from the successor’s side, needs effective management. Investment in career planning and development of the next generation is a step in the right direction.

Contributions/value-add: Given the dearth of research exploring successor-related factors affecting succession, the current article adds to the literature by examining the relationship between person-related factors (self-efficacy and entrepreneurial intentions) and commitment (behavioural outcome) of the next generation within the realm of agribusiness development.