Generation Change And Corporate Succession

According to a recent study, one out of four SMEs will be handed over within the next five years, meaning some 79,400 corporate succession challenges in Austria alone.

An impending generation change bears above all in family-owned enterprises a high potential for conflicts. Hence, the first step when instigating a corporate succession should be a profound analysis of the strategic options and a clearly defined procedure.

Strategic considerations

In SMEs the management often consists of shareholders, i.e. representatives of the owning family, which means that a succession process must be faced on different levels. The formula for success is to openly discuss options and to actively involve both the family members and external management. A multigenerational management may in certain instances be beneficial and a stability factor. In other cases, a clear division between generations may be imperative.