The Role of Knowledge Creation and Transfer in Family

sustainability
Article
The Role of Knowledge Creation and Transfer in Family
Firm Succession
Kalin Pipatanantakurn and Vichita Vathanophas Ractham *
College of Management, Mahidol University, Bangkok 10400, Thailand; [email protected]

* Correspondence: [email protected]
Abstract: The purpose of the study is to investigate the role that knowledge creation and knowledge
transfer processes play in family firm intergenerational succession in Thailand. An exploratory
qualitative case study approach is used. Interviews were conducted with successors and predecessors
of small, medium and large Thai firms that have undergone leadership succession within the past
five years (30 firms, for n = 60 interviews). Data were analyzed using a qualitative content analysis
approach. There were 16 different knowledge approaches identified that are undertaken by the succes-
sor. These processes are commonplace to firms, including formal and informal, internal and external
processes of knowledge creation and transfer. Most of these occur at different stages of preparation for
succession (pre-succession, transition and succession stages). While some knowledge approaches are
used across firms, others are specific to small or large firms. These knowledge approaches and stages
were used to develop a knowledge process model for family firm succession. The research develops
an original model of the knowledge processes associated with family firm succession. This model,
which incorporates a staged succession model with the knowledge processes identified, explains how
and why knowledge creation and transfer occur during the succession process.
Keywords: succession planning; family firms; intergenerational knowledge transfer; succession

knowledge transfer process model
Citation: Pipatanantakurn, K.;
Ractham, V.V. The Role of
Knowledge Creation and Transfer
in Family Firm Succession.
Sustainability 2022, 14, 5845. https:// 1. Introduction
doi.org/10.3390/su14105845 On a global scale, family firms are a dominant sector of the economy. One recent esti-
Academic Editors: Constantin
mate shows that family firms account for over half of global GDP and around 67% of global
Bratianu and Ruxandra Bejinaru
employment [1]. During the COVID-19 pandemic, family firms have been highly resilient,
with 64% expecting revenues to increase in 2021 and 79% not needing additional capital
Received: 10 April 2022 in 2020 [1]. Family firms are equally important in Thailand, where they comprise at least
Accepted: 9 May 2022 80% of Thai firms, including around 75% of the Stock Exchange of Thailand (SET)-listed
Published: 11 May 2022
domestic firms, accounting for 64.9% of the total market valuation [2]. However, relatively
Publisher’s Note: MDPI stays neutral little is known about some aspects of family firm management, including the transfer of
with regard to jurisdictional claims in knowledge during the leadership succession process. Family firms are characterized by the
published maps and institutional affil- transfer of both knowledge and leadership between generations [3], but firms still suffer
iations. from change resistance and poor preparedness [1]. Some family firms may not even engage
in active succession planning, or leave it too late to prepare effectively for the sudden death
or incapacitation of the current leader [4]. Only around 30% of family firms successfully
transfer between the first and second generations; later generational successions occur even
Copyright: © 2022 by the authors.
less frequently [5]. Thus, the success of the succession process poses a major challenge for
Licensee MDPI, Basel, Switzerland.
long-lived family firms.
This article is an open access article
One of the ways that the succession process can succeed is ensuring that the desig-
distributed under the terms and
nated successor has the requisite knowledge to effectively lead the firm [4]. However,
conditions of the Creative Commons
problems such as a reliance on tacit knowledge [6] and the multiple roles of leaders [7]
Attribution (CC BY) license (https://
creativecommons.org/licenses/by/
make knowledge transfer particularly challenging. To date, there has been no formal
4.0/).
investigation of knowledge processes and how they influence the knowledge creation and
Sustainability 2022, 14, 5845. https://doi.org/10.3390/su14105845 https://www.mdpi.com/journal/sustainability

Sustainability 2022, 14, 5845 2 of 18
transfer process throughout the succession cycle. This research gap limits both the practical
understanding of succession preparation and planning within the family firm and the
theoretical understanding of the role of knowledge transfer in the succession process.
The objective of this research is to investigate the role that knowledge creation and
knowledge transfer processes play in family firm intergenerational succession in Thailand.
The research questions include: (1) What processes are used for knowledge transfer in
the succession planning of family firms? (2) When are these processes used during the
succession process? (3) What differences can be observed between firms of different sizes?
In answering these research questions, the researcher will be able to develop a theoretical
model of knowledge transfer along the succession process lifecycle, beginning with the
earliest stages of preparation (typically before the successor enters the workplace formally)
and ending at the point of succession. This will be both a novel theoretical model and one
that offers practical value for the succession planning process.
The paper begins with a review of the literature, including key concepts of the knowl-
edge management process, knowledge management in family firms, succession in family
firms, and the role of knowledge management in the succession process. This culminates
with a presentation of the theoretical framework. The research method is then described.
The findings resulting from the study are presented and then discussed. The final section of
the paper is the conclusion, which summarizes the academic and managerial implications,
limitations, and further research opportunities.
2. Literature Review
2.1. The Knowledge Management Process
The knowledge management process model that is most commonly used is the SECI
model of knowledge transfer [6,8–10]. This model, which was developed by researchers
Nonaka and Takeuchi [10] through a study of Japanese manufacturing firms, proposes a
spiral model through which knowledge is transformed between tacit and explicit knowl-
edge. Tacit knowledge is that which is individual, contextual and difficult to formalize,
instead passing between individuals or being learned through physical experience [11].
Explicit knowledge, on the other hand, is shared and formalized, typically written down for
future use and transfer between individuals [11]. The SECI model proposes four processes
of knowledge transformation, which are: socialization (transfer of tacit knowledge between
individuals); externalization (transformation of tacit knowledge to explicit knowledge);
combination (creation of new knowledge through integration of two streams of explicit
knowledge); and internalization (the integration of explicit knowledge into the individual’s
tacit knowledge) [6,8–10].
A key aspect of the knowledge management process is that knowledge is constructed
through social interaction processes [12]. This research focuses on two specific knowledge
construction processes. The first is knowledge creation, or social interaction intended to
produce new knowledge (consistent with the Combination process of the SECI model) [13].
As Gourlay notes, the SECI definition of this process is problematic because it is limited
to managerial interaction. Regardless, knowledge creation is central to organizational
activities such as innovation [14]. Therefore, it is important for the organization’s strategy.
The second process of knowledge construction considered here is knowledge transfer, which
is the direct or indirect communication of knowledge from one individual to another [15].
Unlike knowledge creation, knowledge transfer is not inherently a competitive advantage,
but it does create the possibility that knowledge may be applied more widely; thus, it can,
if used effectively, also constitute a competitive advantage.
2.2. Knowledge Management in Family Firms

There are several conditions of family firms that influence the knowledge management
process. One of these characteristics is that family firms, regardless of size, have some
degree of nepotism (or favorable treatment of family members) [16]. The effects of nepotism
are complicated. In cases of entitlement nepotism (hiring and preferential treatment regard-
less of capability), nepotism can threaten the performance and sustainability of the firm.
However, reciprocal nepotism (creation of reciprocal networks of support and obligation)
can actually benefit the firm and enable the transfer of tacit knowledge [16]. Another
characteristic of knowledge management in family firms is that they are often bound to
tradition to a greater extent than non-family firms [17]. This does offer the family firm the
opportunity to create and transfer knowledge drawn from this tradition (which Magistretti
et al. term ‘innovation through tradition’). However, it could also stymy knowledge
creation and transfer due to change resistance, which can accumulate in tradition-bound
firms [18]. Knowledge management in family firms is also strongly influenced by affective
relationships and trust between the family members [19]. These affective bonds and trust,
along with the family’s history, influence the extent to which knowledge transfer will be
successful, because they have an effect on communication patterns. The internal relation-
ships of the family also have an effect on family firm culture [20]. The culture of family
firms is established internally through family leadership, but it is also influenced through
the relationships and interactions of the family members themselves. Thus, knowledge
sharing and knowledge management in general are influenced by family relationships,
not only the intergenerational knowledge transfer between family members [20]. Thus,
knowledge management may be different in family firms than in non-family firms, due to
the entanglement and ‘familyness’ of the relationship of members of the organization.
Additionally, family firms of different sizes may have different knowledge manage-
ment processes, due to differences in resources, capabilities and absorptive capacity. Small
and medium-sized enterprises (SMEs) have resource constraints, including financial and
knowledge capital constraints, that limit the extent to which they can use formal knowledge
management processes [21]. This means that SMEs may rely on socialization processes (for
example on-the-job training), which transfer tacit knowledge directly between individuals,
rather than a more formalized process of knowledge externalization or combination. They
may also rely heavily on external sources of knowledge, including informal and formal
sources; for example, they may draw on community connections, make use of external
training and experts, or exploit available knowledge from competitors, government agen-
cies and other stakeholders. This contrasts to larger firms, where internal knowledge
and innovation is viewed as a competitive advantage [21]. Organizational resources also
have a direct effect on knowledge management process capability development, mean-
ing that resource-constrained firms may struggle to make use of the knowledge they do
have [22]. Small firms may have not just resource constraints, but constraints on absorp-
tive capacity [23]. These absorptive capacity constraints are important because, as the
research of Chaudhary and Batra shows, absorptive capacity is directly related to the firm’s
entrepreneurial, market and technology orientations and, in turn, the firm’s financial perfor-
mance. Thus, small firms, including family firms, have resource, capability and absorptive
capacity constraints that mean that knowledge management and its effects are not the same
for these firms as for larger firms. In response to this, the present study anticipates that
knowledge management processes will be different in small and medium firms compared
to large firms.
2.3. Succession in Family Firms

In family firms, succession can be the period in the firm’s lifecycle where managerial
control and economic ownership of the firm are transferred to the younger generation,
typically to a designated successor or successors who have been prepared for their new
roles over a period of time [4]. The succession stage of the family firm’s lifecycle is what
makes the firm a sustained family firm [3]. This period can be a time of considerable strain
in the family firm, both because of the need to prepare the successor and because of the
organizational and familial tensions that arise [24]. These tensions can cause resistance to
transfer of power, as well as social and organizational issues [25]. If not effectively managed
through the succession process, this can cause the firm to fail, either immediately or over
time [26]. Thus, the knowledge creation and transfer processes used in the succession
process are potentially critical for the effective firm succession.
This research uses Handler’s succession process model, which is a role-based model [24,27].
In this four-phase model, the roles of the predecessor and successor gradually change,
with the successor taking on more power while their predecessor withdraws. To begin
(pre-succession, or phase 1), the predecessor is the sole operator/leader of the company. In
this stage, one or more potential successors has been identified and is undergoing education
and preliminary training, but is not yet heavily involved with the business and plays no
formal leadership role. Over time (training, or Phase 2), the chosen successor begins to
undergo more formal training and act in a helper role, but does not yet hold real power in
the organization. The predecessor takes on a ‘monarch’ role, with full control over decisions,
while the successor acts as a ‘helper’. In the transition phase (or Phase 3), the successor
takes on more power and responsibility, while still gaining more in-depth knowledge. The
predecessor’s transition to an overseer and delegator role is paired with the transition of
the successor to a managerial role, wielding some power but looking to the predecessor
for overall decisions. The final stage of the succession process (Phase 4, or succession) is
the transfer of organizational power and control to the successor, who now acts as the
chief decision-maker. The predecessor then recedes into the background as an advisor or
consultant to the successor [24,27]. Thus, this process is not just a gradual transfer of power
and responsibility for decision-making, but also a process of successor learning, through
which they are prepared for their eventual role.
2.4. Knowledge Management’s Role in the Succession Process

The succession period is a challenging time for knowledge management within the
firm, because it is a time when knowledge may be lost due to ineffective transfer to the
successor [28]. Bracci and Vagnoni proposed a theoretical model by which the required
knowledge transfer and creation processes for effective succession were dependent on
the successor, incumbent and organization characteristics. These knowledge transfer
and creation processes are dependent on social connections between the successor and
incumbent, as well as external and organizational processes [28]. Another key finding on
knowledge management in the succession process is that effective knowledge management
for succession can actually improve the organization’s knowledge creation and absorptive
capacity [29]. Furthermore, knowledge management, particularly knowledge transfer,
is essential for strategic renewal of the organization between generations [30]. Strategic
renewal is a critical process in the family firm, as it allows the firm to maintain its relevance
through multiple generations of leadership. The knowledge management process, through
which existing knowledge is both passed on and transformed by newer generations, is one
of the key processes by which the firm maintains its longevity [30].
Thus, these studies’ findings support the importance of knowledge management in
the succession process.
There have been several studies which have investigated the knowledge transfer
process in family firms and the role it plays in the succession process [31–35]. In one case,
which featured a family-owned high-tech measurement solution manufacturer, the firm
developed what the authors termed ‘idiosyncratic capabilities’ to overcome the boundaries
and barriers to intergenerational knowledge transfer for succession [31]. A multiple case
study identified the concept of ‘knowledge-creating human capital’, which is a tool for
knowledge transfer to facilitate succession by the gradual development of the knowledge
of individuals in the line of succession [32]. A third study noted a specific barrier, that
of cross-generational bias, and explored how it influenced cross-generational knowledge
flows and the impact this had on the succession process [33]. A theoretical review identified
a range of factors that influenced knowledge transfer in the succession process of family
firms including trust, commitment to the business, intergenerational and intragenerational
relationships, and other factors [34]. Finally, a study identified the role of power in intergen-
erational knowledge transfers and how it affects the succession process [36]. These studies
have identified several different knowledge creation and transfer processes, which could
take place during the process of succession. These studies clearly show that knowledge
creation and transfer processes are an inherent part of the succession process, and that
knowledge transfer occurs throughout the process. However, one aspect of the literature
which is missing is that few of these studies have clearly identified at what stage of the
succession process these knowledge processes may take place. This was part of the model
development process, which was undertaken to establish what kinds of activities took
place and at what stage.
There are limits to the role of knowledge management in family firm succession. As
one study points out, family firms cannot remain successful in the long term simply by
passing down knowledge; knowledge transformation, or the development of innovation
from existing knowledge, is one of the processes for long-term success of the family firm [33].
The implication for this study is that a simple transfer of knowledge is not enough to
guarantee succession or the continued existence of the firm afterward. Furthermore, many
firms do not make use of all possible resources for knowledge transfer, due to an emphasis
on tradition rather than innovation and on ‘familyness’ rather than change over time [34].
Furthermore, family firms, especially smaller family firms, may not have a clear knowledge
management process in place at all, which limits their potential for knowledge transfer
in the succession process [34]. Moreover, there are broader organizational questions of
trust and identity that will influence the organization’s behavior as a whole, for example
in domains like environmental responsibility [35], financial performance and investment
outcomes [37]. This means that for many family firms, there can be severe limitations on
both the use of knowledge management in the firm and the use of knowledge management
for succession. The model developed here does try to acknowledge these limitations,
particularly taking into account the limitations due to the resources and capabilities that
smaller firms face [34].
2.5. Theoretical Framework

The theoretical framework (Figure 1) is based on Handler’s [24,27] model of family
firm succession, along with the SECI model of knowledge transfer [8,10]. An additional
set of possible knowledge creation and knowledge transfer processes is also incorporated,
each of which has been identified as a possible process for succession management.
In summary, although there are disparate models that address the firm’s succession
process [24,27] and knowledge management processes [8,10], there has not previously
been an attempt to understand how knowledge management processes are used within
the succession process. This research integrates the two models, along with knowledge
creation and transfer processes identified as relevant to an effective succession in the family
firm. This theoretical framework serves as the basis for a qualitative investigation of family
firms in Thailand.
Sustainability 2022, 14, x FOR PEER REVIEW 6 of 19
Figure 1. Theoretical framework of the paper.

Figure 1. Theoretical framework of the paper.
3. Methodology
3. Methodology
The study used an exploratory, qualitative multiple case study design, which was
The study used an exploratory, qualitative multiple case study design, which was
intended to allow for the most possible elaboration and exploration of the process of suc‐
intended
cession andto allow forofthe
the role most possible
knowledge transferelaboration and exploration
within it. Exploratory of the
qualitative process
research is of
succession
intended to and the role of
investigate knowledgeintransfer
phenomena within
significant it. allowing
detail, Exploratory qualitative
for exactly this research
process is
intended to investigate phenomena in significant detail, allowing for
of fine‐grained analysis [38]. The multiple case study approach was selected because exactly this process
it
ofallows
fine-grained
for in‐depth analysis of specific instances and comparison between them [39]. This it
analysis [38]. The multiple case study approach was selected because
allows for in-depthhighly
information‐rich, analysis of specific
detailed instances
and specific andwas
design comparison
chosen in between
recognition them [39].
of the This
sig‐
information-rich, highly detailed and
nificant gap in the research outlined above. specific design was chosen in recognition of the
significant gap in the research outlined above.
Analysis was at the individual level, including perspectives of recently appointed
andAnalysis
prior firm was at theofindividual
leaders Thai familylevel,
firms.including perspectives
A total of 30 firms were of recently
includedappointed
(10 each ofand
prior firm
small, leaders
medium of large
and Thai firms
familydepending
firms. A total
on theofofficial
30 firms were
Thai included
definition of (10
firmeach
size of small,
[39]).
medium
All firms and large
were firmsfirms,
family depending
definedonasthe official
those whereThai definition
more of firm
than 50% size [39]).owner‐
of economic All firms
were
shipfamily
and/or firms, defined
significant as thosecontrol
managerial wherewas more than 50%
assigned of economic
to members ownership
of a single familyand/or
[3].
significant managerial control was assigned to members of a single family [3]. Furthermore,
all firms had undergone a generational succession process in the top leadership role within
the past five years. A summary of the firms and interviewees is provided in Table 1.
Table 1. Summary of firms and participants 1 .
Predecessor Successor
Firm Number General Firm Operations Area
Family Position Code Family Position Code
Small Firms
1 Manufacturing Father 1P Son 1S
2 Retail Father 2P Daughter 2S
3 Personal Services Father 3P Daughter 3S
4 Manufacturing Mother 4P Daughter 4S
5 Food Mother 5P Son 5S
6 Manufacturing Grandmother 6P Grandson 6S
7 Hospitality Mother 7P Daughter 7S
8 Retail Father 8P Son 8S
10 Food Processing/Production Father 10P Son 10S
11 Food Processing/Production Grandfather 11P Grandson 11S
12 Food Processing/Production Older Cousin 12P Younger Cousin 12S
13 Food Service Mother 13P Son 13S
Medium Firms
14 Food Service Mother 14P Daughter 14S
16 Information Technology Grandfather 16P Granddaughter 16S
18 Tourism Services Uncle 18P Niece 18S
19 Hospitality Mother 19P Son 19S
Large Firms
23 Manufacturing Uncle 23P Nephew 23S
25 Media Aunt 25P Niece 25S
26 Information Technology Grandfather 26P Grandson 26S
27 Personal Services Father 27P Son 27S
28 Hospitality Grandfather 28P Grandson 28S
29 Food Processing/Production Father 29P Son 29S
30 Food Service Father 30P Daughter 30S
1 Source: Author.
Data was collected using semi-structured interviews, which allowed the researcher to
combine conciseness with the opportunity to explore the succession process in more detail and
leaving space for participants to provide new information and challenge assumptions [40].
Interviews were conducted with the current and prior leader of each firm (the successors
and predecessors), for a total of 60 interviews. The interviews were recorded and then
transcribed for analysis. In some firms, additional data was also collected through observa-
tion (work shadowing with successor leaders) and secondary data provided by the firm,
for example summary financial statements. However, this supplementary data was not
available for all firms.
Data analysis was conducted using the NVIVO computer-assisted qualitative data
analysis software package. The coding was performed using an iterative approach. The
initial codebook was generated from the existing literature on knowledge transfer and
succession planning [41]. The interviews were then coded, with successor and predecessor
interviews from each firm coded together in order of collection. New codes were added to
the codebook as needed. The initial coding process continued to the point of theoretical
saturation, where no new codes were identified during the process [41]. Following this
point, the codebook was finalized. The interviews were then coded again in the same order,
with the new codebook applied. The results were tabulated and a narrative interpretation
of the findings was prepared. The final stage of analysis was the development of the
succession model, in which the initial theoretical framework was adapted based on the
findings of the research.
4. Findings
4.1. Knowledge Creation and Transfer Approaches
The interviews identified a total of 16 different knowledge creation and transfer ap-
proaches, through which the successors either received knowledge directly from their
predecessors or other senior workers within the firm or developed it through social inter-
action and discovery. These processes (summarized in Table 2) were identified by other
predecessors and successors as the most important aspects of the preparation process for
succession. There were a few unusual approaches identified by only one or a few organiza-
tions (for example, self-led learning, as identified by one predecessor but not confirmed
by their successor as relevant), but as these were uncommon and later analysis did not
identify them as particularly important, they have been excluded from the overall model.
Table 2. A summary of the knowledge creation and transfer processes identified during the interviews 1 .
Knowledge Frequency
Management Brief Definition Illustrating Quotes # of % of
Approach Firms Firms
“I worked in the store during the weekends
Involvement in the company
from when I was 13.” (24S)
Early Involvement prior to adult work life, for 55 91.7
“I began to introduce my daughter to my
example weekend jobs.
clients and suppliers in her teens.” (14S)
Formal education related to
managing the business, e.g., “I studied tourism at university because
Education business or relevant technical I knew I would be taking over my aunt’s 53 88.3
degrees at the vocational or business.” (18S)
undergraduate level.
Experience in work-related “I started on the manufacturing line in
Work Experience roles in the company or in high school, then moved into a supervisor 47 78.3
other companies. role.” (1S)
Observational training in
“I spent my summers in university
different roles in the
Observation shadowing the design, production and 40 66.7
company, including job
sales departments.” (21S)
shadowing and internships.
External, short-term
non-university training related
“I have done my food safety certification
Seminars and Courses to the business and its activities, 36 60
and first aid training already.” (30S)
including technical and
non-technical information.
A close formal or informal
relationship with one or “The plant supervisor was my informal
more older employees to mentor, he taught me how the process
Mentoring 58 96.7
assist in organizational and worked and introduced me to a lot of
technical problems and make important people.” (17S)
social connections.
A formal period of training,
“I did a computer science apprenticeship
typically in technical or
Apprenticeship in university which helped me understand 36 60
vocational roles, either inside
the bigger technology picture.” (16S)
or outside the company.
Table 2. Cont.
Knowledge Frequency
Management Brief Definition Illustrating Quotes # of % of
Approach Firms Firms
Formal or informal reading
and learning of company “I learned almost everything about our
Studying Manuals
policies and procedures, manufacturing process by reading the 38 63.3
and Procedures
technical specifications and manuals.” (22P)
other information.
“I am on the company’s customer service
Involvement in projects
response team, which deals with customer
Project Work/ and solving problems within
service failures, online complaints and other 51 85
Problem Solving the company, either as a team
problems. Our goal is to make the customer
member or a team leader.
happy even if we failed the first time.” (19S)
Participation in formal training
programs in the company “Before taking over the company I
(provided internally or through was expected to complete our internal
Internal Training 44 73.3
external programs), typically management training course. My
to learn different technical and grandson is doing the same.” (28P)
organizational roles.
Participation in informal or OJT
training programs related to “My first learning experiences were
On-The-Job Training
different organizational roles OJT from the line supervisor and line 60 100
(learning by doing)
(commonly lower-level roles workers.” (20P)
such as manufacturing).
Engaging with teams in
the company, both as team “Right now I lead a technical team, we are
Teamwork members and team leaders, investigating upgrading the manufacturing 60 100
for short-term projects or line to Industry 4.0.” (22S)
long-term problem solving.
Playing a significant role in
stakeholder management, “I have been working with our logistics and
Stakeholder
including customers, suppliers, supply chain department for a few years now, 55 91.7
Involvement
and others, to achieve the dealing with our suppliers.” (24S)
company’s strategic objectives.
Supervising and managing
“Right now, I manage one of our
Supervising other employees in formal teams 60 100
locations.” (13S)
or departments.
Participating in coaching
relationships with other “I work with our new graduate training
Coaching employees, either as a program, and have coaching sessions 60 100
coached employee or coach, to with our interns.” (24S)
improve performance.
“I have been involved in our strategic
Participating in the strategic
planning process for about five years.
Strategic Planning planning process for the firm, 48 80
It’s the last thing my father has kept
as team member or team leader.
control of.” (29S)
1 Source: Author.
The frequency of these knowledge creation and transfer processes (also summarized in
Table 2) varied somewhat, though there was some consistency in the processes used. There
were a few approaches, including OJT, teamwork, supervising and coaching, which were
used in all firms. Several others, including early involvement, education, mentoring, project
work and problem solving, and stakeholder involvement were used in at least five of six
firms. At least two of three firms used work experience, observation, internal training and
strategic planning involvement. The least frequently used approaches included seminars
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Manuals  
 Proce-
and 

 
  
 
 



 
 

Internal
OJT
Project Training
Work Apprenticeship
OJT Internal
OJT
Project 
1 Training
Author,
Work 
 OJT
based 
on the SECI 
 

model 
Apprenticeship

of Nonaka  



and OJT
Takeuchi  [10]. 

  
 


  

 
 
   



 

Studying
Teamwork Manuals
Studying
and
Teamwork Proce-
Manuals Studying
and 
 Proce-
Manuals 
 
Studying
and
Teamwork
 Proce- 
Manuals
  and
 Stakeholder
 
Proce-  
Studying
Teamwork  
Manuals  and 
Proce-      
dures
OJT
dures
Stakeholder Involvement
Stakeholder Involvement Stakeholder
OJT  

dures
Involvement
Stakeholder
 

Involvement
     



 Stakeholder
Involvement 
dures  Proce- 



 



Involvement  


 


    


  
Teamwork
Internal Studying
Teamwork
Training Manuals and
Teamwork
Internal  Proce-
Training 
 
Teamwork 

 
 Studying
 
 
Manuals

  
and
Teamwork 
 
 
 
 

 
  
  
  
dures
Stakeholder dures
Involvement
Stakeholder
Project Work Project Work dures
Involvement   dures 
Stakeholder
Project  Work 
Involvement   dures

Stakeholder
Project Work   
Involvement       
 
Teamwork
Stakeholder
OJT
Project Work dures
Involvement
Stakeholder
Project Work Teamwork
Involvement 

Stakeholder
OJT
Project Work Each 
 of these
Involvement 
Stakeholder
Project Work 
knowledge
   dures
Involvement 
 processes
 

 
 was configured

Stakeholder
Project 


Work  

  differently.
Involvement 

   
Processes
 that
 
were

 

Internal Training
Internal Training    Training
Internal   Internal   

Training     
Project Work 
Stakeholder
 oriented 
toward
Involvement
  only 
 tacit
 
knowledge
Project
 
Work 
 
included
 
observation,

 
 teamwork
 
  and

 stakeholder 


Teamwork
Internal
OJT Training
Internal
OJT Training Teamwork
Internal  Training
involvement,
 OJT
Internal
 Training 

while explicit
 

knowledge-oriented
 Internal OJT 
   
Training

processes


included

  

education,

 
seminars

 
Internal Training   
  
 Internal
 
Training
   

 
   
 
   
 


Stakeholder
OJT
Teamwork Involvement
OJT
Teamwork Stakeholder
OJT  Involvement
and courses, OJT 
Teamwork 
apprenticeship, studying manuals OJT and
Teamwork 
procedures,      
 
Teamwork OJT
Teamwork Teamwork   

Teamwork    OJT   Teamwork
  
    and 
 

strategic
 

planning. 
 
Stakeholder Involvement  Processes that combined tacit and explicit knowledge in various ways included early in- 
 
Stakeholder  
Involvement   
Stakeholder   
Involvement      
Teamwork
Stakeholder Involvement 
Stakeholder 
Involvement 
 experience,
  Teamwork
Involvement 
project 
internal
 
Involvement  
       
volvement, work mentoring, work, training, OJT, supervising,
Stakeholder Involvement   Stakeholder Involvement      
and coaching. Thus, half of the approaches that were identified were associated with
both tacit and explicit knowledge. Furthermore, as summarized in Table 3, most of these
processes could be associated with more than one of the SECI model’s knowledge trans-
formation processes. Only observation, seminars and courses, teamwork and stakeholder
involvement seemed to be aligned to only one of these processes. From this analysis, it
is possible to see that the knowledge creation and transfer processes used in succession
planning and preparation do not serve only a single purpose. Instead, there is a dynamic
interaction between tacit and explicit knowledge for many of them, and this dynamic
interaction enables more than one kind of knowledge transformation.
4.3. Knowledge Processes across the Succession Phases

Following the analysis of the knowledge processes based on the SECI model above, the
next stage was to investigate how these knowledge processes occurred across the phases
of succession. Handler’s succession framework has four stages, including pre-succession,
training, transition and succession [24,27]. This framework was used as the basis for
the interviews. However, while participants clearly identified the pre-succession and
succession phases of transition, there was no clear differentiation between the training and
transition phases. Instead, this was viewed by participants as one long stage of preparation
and training, during which the successor gradually took over more responsibility from their
predecessor. Thus, the analysis of knowledge creation and transfer processes followed the
insight of the participants, collapsing phases 2 and 3 of Handler’s succession framework
into a single Transition phase [24,27]. Table 4 summarizes the knowledge processes used
across these three succession phases.
Table 4. Knowledge creation and transfer processes throughout the succession phases.
Phase 1: Phase 2: Phase 3:

Knowledge Approach Pre-Transition Transition Succession
Total % Total % Total %
Early Involvement 55 91.7 0 0.0 0 0.0
Education 53 88.3 0 0.0 0 0.0
Working Experience 47 78.3 0 0.0 0 0.0
Observation 20 33.3 40 66.7 0 0.0
Seminars and Courses 3 5.0 12 20.0 21 35.0
Mentoring 55 91.7 58 96.7 58 96.7
Apprenticeship 36 60.0 6 10.0 0 0.0
Studying Manuals and Procedures 0 0.0 38 63.3 0 0.0
Project Work 0 0.0 51 85.0 0 0.0
Internal Training 34 56.7 44 73.3 0 0.0
OJT 35 58.3 60 100.0 0 0.0
Teamwork 50 83.3 60 100.0 35 58.3
Stakeholder Involvement 26 43.3 55 91.7 42 70.0
Supervising 43 71.7 60 100.0 60 100.0
Coaching 46 76.7 60 100.0 22 36.7
Strategic Planning 2 3.3 40 66.7 48 80.0
In Phase 1 (Pre-transition), there were several activities that more than half of respon-
dents identified, including early involvement (91.7% of firms), education (88.3%), work
experience (78.3%), mentoring (91.7%), apprenticeship (60%), internal training (56.7%),
OJT (58.3%), teamwork (83.3%), supervising (71.7%) and coaching (76.7%). Thus, during
this phase, there is already active participation of the successor, including involvement in
the company’s activities and work live. However, there are some important differences
between this phase and later phases. For example, the successors’ role in activities like
mentoring, teamwork, and coaching were more likely to be as a follower, coached employee
or mentee rather than in the leadership role. For example, 13P entered the company as an
ordinary team member, with her mother acting as her supervisor, a role she reprised for
her son. It was also common at this stage for employees to undergo training, including
formal training and OJT, as part of the company’s ordinary training process before moving
onto a team as a normal worker, rather than immediately taking on a powerful role in the
company. Thus, during the Pre-transition phase, while the successor is already taking part
in formal knowledge creation and transfer activities and playing a role in the company,
they do not yet have a role of power or control within the organization. This indicates that,
rather than using entitlement nepotism to hire potential successors into roles they are not
yet prepared for, most of the firms are actually using reciprocal nepotism, with successors
using the pre-transition time to form social relationships and create networks of support
and obligation that assist in their knowledge creation and transfer [16]. Thus, even though
a family firm is by nature nepotistic, it appears that, at least for successful firms, simply
assigning successors roles of responsibility at an early stage does not occur.
Phase 2 (Transition) is marked by a transition away from some of the activities of
Phase 1, while in others the successor takes on more senior roles. Activities including
early involvement, education, and work experience are no longer part of the training
process. However, activities like observation (66.7% of firms), mentoring (96.7%), studying
manuals and procedures (73.3%), project work (85%), internal training (73.3%), OJT (100%),
teamwork (100%), stakeholder involvement (91.7%), supervising (100%), coaching (100%)
and strategic planning involvement (66.7%) are now commonly used by successors to create
and transfer knowledge. In some cases, these activities continue as before. For example,
internal training and studying manuals and procedures may be used by successors to better
understand the company’s activities, including roles they have not worked in previously.
In other cases, the knowledge creation and transfer activities are changing during this
phase. Successors take on supervisory roles, rather than being supervised, and are more
likely to act as mentors and coaches for junior employees rather than being coached and
mentored. They are also more likely to take on leadership roles, such as teamwork and
leading projects and problem-solving activities. However, they also still continue to have
knowledge transferred to them by their senior mentors and predecessors. For example,
17S reported that, as he began to meet with customers, his parents mentored him, passing
on tacit knowledge about the customers and their previous experiences with them. Thus,
even though they are taking on senior roles, they are still learning through a process of
social interaction.
At this stage, the successors also become much more involved in activities that involve
social interactions with external organizational partners, for example being involved with
stakeholder management activities and strategic planning activities. Thus, this is a long
stage that is poorly differentiated, but which does involve a gradual process of both
accumulation of power and responsibility [24,27] and changes in the knowledge creation
and leadership processes.
In Phase 3 (Succession), successors are still engaged in knowledge creation and transfer
processes to some extent. Most of the successors and predecessors reported that mentorship
relationships continued into this stage (96.7%), consistent with the role of the predecessor
in the succession framework [24,27]. Teamwork (58.3%) and stakeholder involvement
(70%) were still commonplace activities as well. In the other common activities, including
supervising (100%) and strategic planning (80%), successors were more likely to engage
in supervision and leadership roles. However, they were still engaging with both follow-
ers and their predecessors, who continued to provide useful knowledge, especially tacit
knowledge about business partners and strategy. Thus, while the Successor phase seems to
be a less intense period of learning, it remains a period of learning and knowledge transfer.
4.4. Knowledge Processes in Different Firm Sizes

The final aspect of development for the knowledge process model for succession was
an investigation of how knowledge processes were different in firms of different sizes.
The frequency of knowledge processes in firms of different sizes is summarized in Table 5.
While about half the knowledge processes were common among firms of all sizes, there was
one process more common in small firms and seven that were more common in medium
and large firms.
Table 5. Knowledge creation and transfer processes in firms of different sizes 1 .
Knowledge Creation/ Small Firms Small Firms Large Firms

Transfer Approach Total % Total % Total %
Early Involvement 20 33.3 20 33.33 15 25.0
Education 14 23.3 19 31.7 20 33.3
Working Experience 11 18.3 17 28.3 19 31.7
Observation 4 6.7 16 26.7 20 33.3
Seminars and Courses 6 10.0 10 16.7 20 33.3
Mentoring 20 33.3 18 30.0 20 33.3
Apprenticeship 18 30.0 10 16.7 8 13.3
Studying Manuals and Procedures 6 10.0 14 23.3 18 30.0
Project Work/Problem Solving 18 30.0 13 21.7 20 33.3
Internal Training 8 13.3 16 26.7 20 33.3
OJT 20 33.3 20 33.3 20 33.3
Teamwork 20 33.3 20 33.3 20 33.3
Stakeholder Involvement 20 33.3 17 28.3 18 30.0
Supervising 20 33.3 20 33.3 20 33.3
Coaching 20 33.3 20 33.3 20 33.3
Strategic Planning 11 183 17 28.3 20 33.3
1 Source: Author.
4.4.1. Shared Knowledge Processes

Some of the knowledge processes were observed at around the same frequency in
small, medium and large firms. These shared processes included early involvement,
mentoring, project work and problem solving, OJT, teamwork, stakeholder involvement,
supervision and coaching.
4.4.2. Processes More Common in Small Firms

Apprenticeships were common in small firms. However, they were much less common
for medium and large firms.
4.4.3. Processes More Common in Medium and Large Firms

There were several knowledge processes that were far more common in medium
and large firms than they were in small firms. These activities included work experience,
observation, internal training, seminars and courses, and studying manuals and procedures,
along with strategic planning involvement. Between 70% and 100% of medium and large
firms used these processes, but typically 55% or less of small firms. Education, used in
almost all medium and large firms, was slightly less common in small firms, though this
difference was not as sharp as some of the other processes.
The reason for these differences can be understood through the lens of knowledge
management processes of small firms in general, which are affected by resource constraints.
For example, small firms’ more frequent use of apprenticeships can be understood as a way
to access external knowledge from other firms, which is a common knowledge strategy
for small firms [21]. Specifically, many of the apprenticeships discussed in the interviews
were not with the organization itself, but externally arranged at competing firms or in other
industries. Thus, the use of apprenticeships in preparation of the successor means that the
firm can also draw on the knowledge resources of other organizations. This could ultimately
increase the firm’s absorptive capacity [23], overcoming one of the key constraints of the
small firm and enabling higher levels of knowledge creation and innovation in the future.
There is also some possibility that resource and capacity constraints limit the potential for
successors in small firms to make full use of the organizational resources available [22].
For example, 7P observed during the interviews that activities like observation and job
shadowing were not possible because the organization simply did not have the spare
capacity for the successor to engage in internships or similar activities. Resource constraints
like low levels of process documentation and lack of formal training procedures also meant
that some of the knowledge transfer activities were less common or simply not used in
small firms. Thus, there are several differences in the resources and capacities of small firms
and those of larger firms that changed how successors were prepared, particularly in the
pre-transition stage, compared to the medium and large firms. However, small firms did
not show more reliance on socialization processes in general as presupposed in some of the
literature [21]; instead, many of the socialization processes were used by firms of all sizes.
Perhaps a better explanation is that small firms are equally likely to engage in socialization
and internalization processes, but less likely to engage in the explicit knowledge transfer
processes of externalization and combination. One of the unexplained differences is the
lower engagement with strategic planning activities. However, this was explained in the
interviews, as several of the interviewees (1P, 3S, 4P, 4S, 5P, 5S, 7P, 8S, 9P) indicated that the
company simply did not do a lot of strategic planning. Thus, this is a substantive difference
in the operations of small firms compared to medium and large ones.
Another major difference between small firms and medium and large firms was that
successors took on roles with significant responsibilities earlier in the succession period.
For example, it was more common for successors in small firms to take on teamwork,
supervision, and strategic planning and stakeholder involvement roles during the pre-
transition phase, while successors in large firms were more likely to still be engaged in
further education and formal training processes. Elaboration from small firm participants
made it clear that successors were expected to take on more responsibility earlier than
those in larger firms, and needed to either spend time learning technical skills through
apprenticeship or move directly to a leadership role. Although this may look like a form of
entitlement nepotism [16], which would otherwise be unhelpful to the succession process,
the interviews revealed that this was more about resource constraints. Simply, as 6S stated,
there was no room in the small firm (with fewer than 10 employees) for the successor
to engage in a protracted learning period, due to resource constraints that limited non-
productive employees. This contrasts sharply with the experience of large firm successors
like 27S, who spent nearly a decade learning positions in the company from the ground up.
4.5. Knowledge Process Model of Family Firm Succession

The final stage of the research was to develop a knowledge process model of family
firm succession (Figure 2), taking into account the knowledge processes identified, the
phases during which these processes occur, and the differences between small, medium
and large firms. The model developed includes the activities reported by at least 75%
of participants, either all participants (the shared knowledge processes) or within a firm
size category (the firm size-dependent knowledge processes). The derived process model
addresses, therefore, two dimensions of the ba or knowledge context [6]: the firm size,
which affects both the internal knowledge processes of the firm and its resource and
capacity constraints; and the stage of succession, which affects the knowledge processes
and capabilities of the successor. As the model also shows, the SECI processes occur
throughout all three stages of the succession process; thus, there is little sense that any
particular process predominates at any given stage, although explicit knowledge processes
are more common in Phases 1 and 2.
This model is a preliminary model and designed for further research into the knowl-
edge creation and transfer processes that occur in the family firm succession process. The
next steps for the development of the research model is a broader application to investigate
knowledge creation and transfer in other conditions, including outside the initial sample,
for failed or difficult succession processes, and in cross-cultural contexts (including different
countries and different Thai cultures).
Sustainability 2022, 14, x FOR PEER REVIEW 15 of 19

sample, for failed or difficult succession processes, and in cross‐cultural contexts (including
different countries and different Thai cultures).
Figure 2. A knowledge process model of family firm succession.

Figure 2. A knowledge process model of family firm succession.
4.6. Discussion
There are some implications of the literature for the model as developed here. One
of these implications is that relationships within the family surround and influence the
processes here. For example, the nepotism-based relationships of the family firm [16] may
mean that planned or potential successors have access to training opportunities that do
not ordinarily exist. An example is the early involvement of planned successors in the
operations of small family firms, which would not be available to non-family members.
These positions may be driven partly by tradition, which holds greater sway than it does
in non-family firms [17]. At the same time, the relationships of trust and affective bonds
between family members will also influence the extent to which individuals have access to
these training opportunities [19,20]. Successors and predecessors who have strong bonds
of trust and affection may, therefore, be more effective at transferring knowledge than those
whose relationship is less close. There are also other issues that could influence outcomes,
including intergenerational biases, commitment to the organization and its success, and
flows of power [33–35]. Therefore, the processes of succession can be expected to look
different from firm to firm, and between generations within the same firm. There may also
be competing tensions, for example the effect of tradition, which can limit innovation [18]
against the demand for strategic renewal [30]. While firms may develop ways around these
tensions to ensure effective knowledge transfer in any case [31,32], this is not guaranteed.
5. Conclusions
5.1. Academic Implications
The academic contribution of this research lies in its integrated process model of
knowledge creation and transfer for the succession process. This model, which incorporated
the concepts of the SECI model along with the succession phase model of the family firm’s
lifecycle and the firm size and knowledge processes identified within the research, is a
novel approach to understanding knowledge creation and knowledge transfer during the
succession process. The key insight of the model is that knowledge transfer for succession
in the family firm is not a one-time event. Instead, it is a continual process in which the
successor’s knowledge gradually becomes more specific and more focused on higher-
end issues such as leadership and strategy. Furthermore, the different resources and
constraints in firms of different sizes means their knowledge process is different throughout
the succession lifecycle. Thus, it is not possible to speak of knowledge processes for
succession as a single set of practices—instead, these practices are heavily dependent on
the organizational environment and context. This model offers other researchers a tool for
understanding knowledge transfer throughout the lifecycle of the family firm, as well as
insight into what kinds of processes may be used.
5.2. Managerial Implications

This research has some key findings that are relevant to knowledge creation and
transfer processes in the family firm succession process, and which can be used to improve
the management succession planning for the firm. First, the research has revealed that the
knowledge creation and transfer processes of the family firm’s succession span the length
of the succession process, beginning long before the chosen successor takes the reins and
continuing after their formal succession period. This implies that the succession process
should not only consider knowledge transfer at the point where a successor is named, but
instead potential candidates should be included in knowledge transfer well before this
point. Furthermore, the 16 knowledge processes identified are not used indiscriminately
throughout the succession process. Instead, the pre-succession stage is characterized by
external, formal learning processes and experience- and knowledge-building activities such
as early firm experience. During and after the succession process, knowledge becomes
more internal to the firm, and, to an extent less formalized, the chosen successor also
begins to gain knowledge through formal involvement in the firm’s strategy, planning
and operations, rather than through external learning. Thus, the candidates for succession
should all undergo the initial, formal training process.
This research also revealed that that firms of different sizes have different succession
knowledge processes. Successors in small firms, with their informal knowledge processes
and resource constraints, rely heavily on external activities like apprenticeships but, con-
versely, may be less driven to formal education and training. In large firms, where there are
more resources but, simultaneously, more demands on the successor, formal education and
training is prevalent. Medium-sized firms fall in the middle, with some processes more in
common with small firms and others consistent with large firms. Thus, while knowledge
creation and transfer is part of the succession process for firms of all sizes, exactly how this
takes place depends on the firm size, which is a proxy for resources and internal process
formalization. Therefore, there is no one-size-fits-all solution for knowledge transfer within
the succession process, and firms need to make choices that effectively prepare potential
successors within the resources available to the firm.
5.3. Limitations
There are some limitations to this research, which suggest opportunities for further
research. One of these limitations is that the extent of cross-cultural generalizability of
the knowledge process succession model is unclear. Family firm succession processes
do vary widely between cultures, and there are known issues in generalizability of the
SECI model, especially as it relates to tacit knowledge and its transformation. Given
these empirical and theoretical differences, it is possible that the research model may not
generalize to all cultures. The second limitation is that the study only drew on the success
cases of intergenerational transfer—failure cases were not investigated. Thus, it is unknown
whether the factors identified are characteristic of success and not failure, or whether some
or all of these conditions may also be in place in failed successions.
5.4. Opportunities for Further Research

There are several opportunities for further research that can be suggested, given the
limitations of the current study. The issue of cross-cultural generalization of the findings can
be addressed by cross-cultural model testing, in which the derived model is applied to firms
in different cultures and explicitly investigated in relation to cultural differences. To address
the limitation of positive bias, which occurred because this study only addressed success
cases, it would be appropriate to incorporate failure cases, either through an extended case
study or by including firms that failed in the transition period in a broader survey of family
firms, when testing the model.
Author Contributions: Conceptualization, K.P. and V.V.R.; Data curation, K.P. and V.V.R.; Formal
analysis, K.P. and V.V.R.; Investigation, K.P. and V.V.R.; Methodology, K.P. and V.V.R.; Project adminis-
tration, K.P. and V.V.R.; Supervision, V.V.R.; Writing—original draft, K.P. and V.V.R. All authors have
read and agreed to the published version of the manuscript.
Funding: This research was funded by The Royal Golden Jubilee Ph.D. Programme grant number
[PHD/0075/2558].
Conflicts of Interest: The authors declare no conflict of interest.
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The Role of Knowledge Creation and Transfer in Family

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sustainability

College of Management, Mahidol University, Bangkok 10400, Thailand; [email protected]

Keywords: succession planning; family firms; intergenerational knowledge transfer; succession

Sustainability 2022, 14, 5845. https://doi.org/10.3390/su14105845 https://www.mdpi.com/journal/sustainability

2.2. Knowledge Management in Family Firms

2.3. Succession in Family Firms

2.4. Knowledge Management’s Role in the Succession Process

2.5. Theoretical Framework

Figure 1. Theoretical framework of the paper.

Table 1. Summary of firms and participants 1 .

4.3. Knowledge Processes across the Succession Phases

Phase 1: Phase 2: Phase 3:

4.4. Knowledge Processes in Different Firm Sizes

Table 5. Knowledge creation and transfer processes in firms of different sizes 1 .

Knowledge Creation/ Small Firms Small Firms Large Firms

4.4.1. Shared Knowledge Processes

4.4.2. Processes More Common in Small Firms

4.4.3. Processes More Common in Medium and Large Firms

4.5. Knowledge Process Model of Family Firm Succession

Sustainability 2022, 14, 5845 15 of 18

Figure 2. A knowledge process model of family firm succession.

5.2. Managerial Implications

5.4. Opportunities for Further Research

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