*Review of Related Literature

Business is an entity that engage consumer and dealer exchanging of goods and services
involving money (Business Dictionary, 2016). Businessman is the term used pertaining a person who
owns a certain business. Since money is "anything of value that serves as a generally accepted medium
of financial exchange" (Business Dictionary, 2016, p.1) it is the fundamental element or the base of
business. Many people use business as their primary source of money or income. Ruling businesses are
small and mMedium eEnterprises or what they call SMEs which is are 90% of the total number of
business enterprises worldwide (10 Facts about Family business, 2009). These small and medium
enterprises include family businesses. Family businesses account 2/3 of total businesses around the
world (Davis, 2016). Family business is one type of business where a family by blood or marriage
manage the business. Family businesses are quite observable here in the Philippines and are commonly
resorted to by families as a source of income. Therefore, success is most likely attainable as evidenced
by the number of family businesses there are.People choose family business to build a connection, a
wider connection with their business alliance (KH1, 2016).

When they get the power and success, they need to establish a new system for the next business
generation in order to maintain their stature. Every family business needs a successor to continue their
main objective, to retain the success of their company. But 50% of family businesses do not have a plan
or things to consider on how they will pass their legacy and to whom will they pass it (10 Facts about
Family business, 2009). This can be the reason why only 30% of family businesses survive the transition
of leadership to the second generation and 13% make it through the third generation (Sultan, 2014).
Business owners who do not have plans on how they will choose their successor can have the effect of
having a low chance of survival of family business. Hence, considering factors and following guidelines
are conducive in choosing a family business successor.

There are factors that affect family business succession that could be inimical and can cause
damage or could be a big assistance for the business. Lucky, Minai, and Olusegun (2011) proved that the
real succession will help the relationship between the founder, successor, and environment to avert an

argument and cause stability. Disagreement from any of these factors could directly jeopardize the future
of the business and its continuity. Haag, Helin, and Melin (2016) asserted that during the succession
process, conversations are ongoing and understanding is shared and develop. Therefore, better
communication could be an instrument to lead the team to a manifest discussion towards the selection
process. However, conflicts are common in the succession process because of inherent issues of
competition, power, and control (Haag et al., 2016). There are influential actors during this process that
has the power to control the decision and could lead to a subjective and uncertain choice. The makers
behind the decisiondecision-makers, their interaction, their position, and how they control the company
could be the extended factors that could truly affect the succession of a business. A conflict in succession
probably will lead to a conflict in management. What needs to manage a company could take down
attributes and could help to determine the best successor of the business. Business management is what
the successor would face after being selected for the position to run the company or the business.
Because of thisThus, many factors could also affect a family business management.

Waisner (2012) argued that Family Business Consulting is not beneficial for family businesses, it
may only effect change in the subsystem areas of their business vantage point. Professionals may have
patterns and inquiries for business management;, it can change what makes the family business unique
or successful particularly to its strategies. Related to this, familial obligation will head to a different
strategic choices. The functioning concept is within the hands of the family member who operates the
business and not the hired employees with high positions inside the business (Stalk, Kachaner & Bloch,
1998). Lastly, Davis and Roberts (2014) explained that in managing a family business, the holder should
know how to identify growth opportunities and how to take care of the previous achievements of the
business. A good business owner could make its company or business stable with regards to its success.
Outside factors from family business could not make a big help for the business, but familial operation
and strategies are favorable in its management to retain its attainmentvalues that add up to the
company’s success. Both successful succession and management interferences could be resolved
through guidelines that could help the company in such courses.

Guidelines for choosing a successor are comparable with the attributes that a successor must
have. Matthew (2015) emphasized that the successor should have the abilities (skills) and personality
(character) to be a leader. Facilitating the business is not just to show professionalism but to construct a
good relationship with the employees. A successor with personality and skills could possibly look pleasant
and approachable for the employees. In addition to the attributes, a successor should have a good
thinking capability and should be good at decision making (The Family Business Consulting Group
[FBCG], 2015). This could lead to the successor to be decisive enough for the company's strategies and
innovations. While, De Poulet and Pendergast (2016) reiterated that family members who are only
interested about family business should be the ones to join. Beyond their demanded responsibilities
should have their inclination for the field of business. If none, a massive risk for the business sooner will
materialize. Lastly, Davis and Roberts (2014) explained that in managing a family business, the holder
should know how to identify growth opportunities and how to take care of the previous achievements of
the business. Consequently, the emerging factors and the guidelines can be a great assistance for the
business of the company. It identifies the route on how the predecessors or the family that runs the
business could successfully pass the business or choose the best successor.

In conclusion, choosing a successor is not just choosing someone you the owner likes. There are
important factors to consider and guidelines are needed in this crucial part of transition, which can affect
the entire system of the current situation of the business. Conflicts are common in the succession process
coming from different factors that can cause different damages to the business. As a suggestion, a family
business system is more likely to be mastered by a family member because of long-term attachment to
the company or the management. However, it is hard to retain the strategies by the previous management
that make it excel. In this case, abilities, skills, and interest are the best determinants of choosing a
successor leading him/her to have a good thinking capabilities and good at decision making for the
company's success. Because of that, the researchers settled to find out the common factors and to seek
helpful guidelines in choosing a family business successor to help the predecessors in this risky process.
Since considering factors are helpful in succession because it influences the authorities in their decision,
it can directly point out which factor could be an impediment or an advantage. Guidelines are needed to
track the steps that could help the predecessor to choose his/her best successor. These things are
significant for the family business and it will lead to certain success.