Effects of Internal Resources and Capabilities on the Survival of Family -Owned Manufacturing Firms in Dar es Salaam, Tanzania
Keywords:
capabilities, family-owned manufacturing firms (FOMFs), resources, survival.Abstract
Around 30% of global family-owned manufacturing firms (FOMFs) survive to the second generation, below 14% survive to the third generation, and not more than 3% survive beyond the third generation. Although Tanzanian FOMFs increased by 50% between the 1960s and early 1970s, only 13% of them survived to 2015. The study investigated the determinants of intangible internal resources and capabilities that are necessary for the survival of FOMFs and how they relate to the survival of those FOMFs. 384 respondents from 37 FOMFs in Dar es Salaam region were randomly selected to fill the questionnaires. Multiple linear regression analysis was utilised for data analysis and testing hypotheses. Successor involvement in business management and training the successor were revealed as the factors necessary for the survival of FOMFs and were empirically tested to investigate on how they relate to the survival of the FOMFs. The results indicate that successor involvement in business management has significant positive effects on the survival of FOMFs. Furthermore, training the successor has insignificant effects on the survival of the FOMFs. The study has advanced the knowledge of RBT in emerging Sub-Saharan economies and particular family-owned manufacturing firms’ economy. Therefore, for sustainable FOMFs survival, successors should be systematically stepwise involved in business management to effectively learn and gain experience in leadership.
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