Socialization Patterns of Successors

in First- to Second-Generation
Family Businesses
Ercilia García-Álvarez, Jordi López-Sintas, Pilar Saldaña Gonzalvo

This paper focuses on the socialization of potential successors in family business and attempts to
relate this process to values that founders intend to convey to the next generation. We found that
founders’ values condition potential successors’ socialization and that there are two different phases
common to all socialization processes. The first stage, characterized by family socialization and
common to all founders’ descendants, comprises value transmission and training. The second stage
is characterized by business socialization and reserved only for the founder’s potential successors. We
also identified two models of socialization that pursue two different aims: (a) the Founder Homosocial
Reproduction Model and (b) the New Leader Development Model. These socialization models are
consistent not only with values that the founder intends to convey to potential successors but also
with the founder’s own business perception. We present and explain the distribution of these two
models according to each group of founders. Finally, we reveal the content of what we call the
founder’s dependence paradox and the effect on the next-generation socialization process.

Introduction 1990; Longenecker & Schoen, 1978), where close

Dyer and Handler (1994) point out the relevance
of understanding the role that family plays in
developing entrepreneurs to build a theory of
how child-rearing practices encourage or
discourage entrepreneurial behavior and
leadership. Building such a theory involves
analyzing socialization practices within the family
(Foster, 1995).
Founders commonly attempt to mold future
leaders in their image—a phenomenon labeled
homosocial reproduction (Kanter, 1977; Handler,
1994)—by valuing in their successors such
characteristics as creativity, independence, and
willingness to take risks (Chrisman, Chua, &
Sharma, 1998). These characteristics are
commonly associated with entrepreneurs. Thus,
family businesses favor personal, direct,
relationship-centered approaches to successor
development (Birley, 1986; Dyer, 1988; Handler,
leader-successor interaction is preferred over
education as a source of experience, although
family interaction provides no guarantee of
success (Fiegener, Brown, Prince, & File, 1994).
Successors’ process of induction to family
business behavior plays a crucial role in the
succession process. On the positive side, it
provides family continuity to the business, raises
the entrepreneurial potential of descendants, and
reduces the level of conflict among siblings in
the succession process. However, when this
process does not fit particular succession
requirements, the negative side of succession in
family business commonly appears: sibling rivalry,
poor performance, and business failure.
This paper studies the content of the
socialization process of potential successors in
first- to second-generation family businesses.
Unlike previous research, however, this study

FAMILY BUSINESS REVIEW, vol. XV, no. 3, September 2002 © Family Firm Institute, Inc. 189
García-Álvarez, López-Sintas, Saldaña Gonzalvo
focuses on the existence of differences in the
socialization process according to four types of
founders recently found (García & López, 2001)
and proposes two patterns of socialization.
Literature Review
Next-Generation Socialization. Socialization
is a complete process of induction of an individual
into the objective world of a society (Berger &
Luckmann, 1966). Everybody is born into an
objective social structure within which they
encounter those who are in charge of their
socialization—that is, first their families and then
other social agents. We select the social world
according to our own social structure and
idiosyncrasies.
Berger and Luckmann (1966) differentiate
two stages in the socialization process. Primary
socialization is the first and most important stage
for an individual and covers the acquisition of
knowledge and values that make it possible for
him or her to live and interact with others in a
social system. That is, the child internalizes the
world of his or her parents as the world and is
initiated into the values, norms, and behaviors
encouraged in the family. Hence, primary
socialization emphasizes communication of a set
of well-established values to children. The child
internalizes and makes them his or her own in a
deep, interactive, emotional process. Values are
the bedrock of primary socialization; however,
family business literature provides few clues about
the nature of values to be transmitted to the next
generation (Santiago, 2000).
Brunaker (1996), Kets de Vries (1993), and
Corbetta and Montemerlo (1999) emphasize the
founder’s role in selecting and conveying a set of
well-established values to potential successors as
a way to facilitate a successful succession process
and to achieve the growth and success of the firm.
Succession can be facilitated by coherence in
value transmission—an argument that leads
Santiago (2000, p.15) to state that the consistency
of values between incumbent and successor is
more relevant than the existence of formal
planning in the succession process. Nevertheless,
190
the achievement of the firm’s growth and future
success can be affected not only by consistency
of values, but also by the very nature of the values
being transmitted (Dyer, 1986; Gallo &
Cappuyns, 1999).
The second stage of the socialization process
is labeled secondary socialization. It comprises the
acquisition of role-specific knowledge and always
presupposes a preceding primary socialization.
Thus, coherence between both is a relevant issue
because discrepancies between primary and
second socialization may cause the failure of the
socialization (Berger & Luckmann, 1966).
Usually, the role of the family declines in favor
of other social agents that lead this phase. Due
to the different levels of interaction between
family and business possibly found among family
firms, however, it is not clear to what extent
family does not continue to exert a relevant
influence on potential successors who have
entered the business.
Although the most appropriate timing for
the sibling(s) to enter the family business varies
from family to family (Barach, Ganitsky, Carson,
& Doochin, 1988), Harvey and Evans (1994)
point out that entry strategies, as well as
succession planning, should start early in the life
of the sibling(s). In the event that no planning
exists, timing of the sibling’s entrance and the
entry modes may be two possible sources of
conflicts. In this vein, Danco (1982) asserts that
entrepreneurs who start planning their
children’s involvement and succession in their
40s will have a higher probability of successful
family business succession than those who wait
until their 50s and 60s.
In this secondary socialization, the quality
of the relationship between the leader and
successor also plays a key role in succession and
succession planning (Ward, 1987) and is
significantly associated with the level of successor
training (Seymour, 1993). Therefore, successors’
socialization plays a crucial role in the succession
process (Brunaker, 1996).
Successor Selection. Most of the literature
in family business shows that founders seek
continuity of their business through next-
 Socialization Patterns of Successors in First- to Second-Generation Family Businesses
generation family members: children first,
followed by other family members (Corbetta &
Montemerlo, 1999; Iannarelli, 1992; Kets de
Vries, 1993; Llano & Olguin, 1986) and, finally,
nonfamily insiders or other alternative solutions
(even outsiders) when next-generation successors
are unavailable (Ward, 1987). Thus, family
descendants are the first option in a founder’s
succession.
However, the literature points out that
families exhibit differences in their criteria of
successor selection. Primogeniture rule of the
first-born son was mentioned some years ago as
the most frequent pattern (Llano & Olguin, 1986;
D’arquer, 1992), where female candidates are
considered as potential successors primarily when
all of the founder’s descendants are female
(Iannarelli, 1992) or when they are the first born
(Barnes & Hershon, 1976). These rules of
preference affect the socialization process of
offspring by establishing a new category: those
who are considered potential successors and those
who do not count at all.
Nowadays, the research indicates that many
families opt to create a team of brothers and
sisters who share ownership and management
(Aronoff, 1998; Gersick, Lansberg, Desjardins,
& Dunn, 1999)—that is, they open the possibility
to become potential successors to all of their
descendants. This decision provides families with
a range of potential successors among next-
generation family members who can share a
common socialization process. However, the
literature does not explain to what extent these
criteria affect successors’ socialization process or
take into account their gender, the dimensions
of the whole socialization process, and the
differences among founders according to their
values.
Founder’s Heterogeneity. Berger and
Luckmann (1966, p. 135) point out that the
specific contents internalized in primary
socialization vary. Thus, the existence of different
value systems among founders must be taken into
consideration when analyzing the socialization
process of the next generation.
García and López (2001, pp. 220-221)
constructed a taxonomy of four groups of
founders, based on their different value systems
and main objectives regarding both family and
firm, as explained below: founder of family
tradition, achiever, strategist, and inventor.
Founder of family tradition. Group values
and the idea of the business as an end dominate
the value system of those in this group. The firm
is something beyond a mere means to earn a
living. This group frequently exhibits such
values as positive perception of human relations,
ethical orientation, and a feeling of family. Their
ancestors had a family background in both the
entrepreneurial and the economic activity—that
is, they developed an entrepreneurial career in
the same business activity. The firm’s growth is
probably limited by a family tradition in which
it is hard to break with business activity, if
necessary, to continue growing.
Founder-achiever. Those in this group view
their firm(s) as a means to earn a family living
and, as founders of family tradition, the group-
value orientation prevails in their value system.
They typically exhibit such values as short-term
orientation, vocation, and task orientation. In
their job as entrepreneurs, tasks directly related
to technical aspects of their economic activity
are predominant. They do things rather than
organize activities for others to perform, and
their workers assist them in doing things.
Consequently, they look at their work basically
with their team, assistants, and family members
working in the firm.
Founder-strategist. Although those in this
group see the business as an end, like founders of
family tradition, self-fulfilment values predominate
in their value system. They frequently exhibit such
values as sense of achievement, internal control,
and long-term orientation. The business is an end,
and they attain a sense of self-realization from
steady growth in the size of their firm and the
number of additional businesses whose activities
are closely related to the original one.
Founder-inventor. As in the case of founder-
strategists, self-fulfilment values predominate in
their value system, although they view their
business as a means to earn a family living. Values
191
García-Álvarez, López-Sintas, Saldaña Gonzalvo
such as innovation, family orientation, and a
negative perception of human relations prevail.
The founder’s personal development is based on
the possibility to innovate and invent continually
inside his or her firm, with this being the means
to earn a living.
Research shows heterogeneity among
founders (in values and motivations as well).
However, founders should differ in the value
structure that they are trying to pass on to their
successors. These differences should be reflected
in the socialization process of their descendants.
Research Methodology
Before embarking on fieldwork, we carried out a
literature review to focus our research problem
and develop a theoretical framework that would
guide our research design and subsequent
analysis. Our goals focused on the following
research questions:
• What values are founders trying to pass
on to potential successors?
• Do all founders transmit the same values?
If not, how does the transmission of the
value systems to potential successors vary
based on founder type?
• What is the content of a socialization
process?
• Are there different models of socialization
based on founder type?
Our theoretical sample was composed of 13
male Spanish founders who are approaching
retirement (65 years old) and currently work with
the potential successors of their firms. All
founders had more than 25 years in business and
were still in full control of their firms’ ownership.
Data were gathered in fieldwork over a six-month
period by using a semistructured interview
protocol and observation notes. All of the
interviews were conducted by the first author and
took place in the founder’s office, lasting from
two to six hours. Each interview was tape
recorded and fully transcribed. We also compiled
relevant secondary data about founders’ families
and businesses. The detailed process of sample
construction, the main characteristics of our
192
sample, and the full protocol interview is reported
in García and López (2001).
Analytical Procedure: Combining Quali-
tative and Quantitative Techniques. From a
qualitative approach, we combined qualitative
and quantitative instruments to obtain comple-
mentary findings. Atlas.ti win 4.2 build 057, a
computer-assisted qualitative software, was used
as project container (Muhr, 1997). The process
described here is highly iterative and tightly
linked to data. Thus, in all 13 cases, we pursued
a multivariable analysis in three main steps.
First, we initially carried out an in-depth,
case-by-case analysis by coding for themes until
obtaining the final codebook. As a result, we
obtained a matrix of values that founders intend
to transmit to their potential successors by
founders (see Table 1). One of our main concerns
at this step was to control subjectivity as much as
possible. We used an iterative agreement process
about data segments to be coded, codes to be
used, and the placing of data segments into the
same codes. Thus, our final codebook was
developed, taking into account the 13 cases and
not only a subsample of our data.
Second, we then used quantitative techniques
of matrix analysis to look for and graphically
display patterns in the coded data. After we had
obtained the final codebook, we focused our
attention on analyzing values that founders
intended to pass on to their potential successors.
We obtained a code frequency table of 28 values
for each case. This frequency represents the
number of times each value was mentioned by
each founder. Using the value code’s frequency
table, we applied an ordinal multidimensional
scaling (MDS) technique to the derived chi-
squared distance matrix.
Finally, we developed a qualitative backup
of our cross-case patterns. After we had obtained
the value hierarchy that founders wish to convey
to the next generation, we returned to Atlas.ti
and built a conceptual matrix focused on cases
that included secondary data and evidences from
our observation notes. We focused on analyzing
the relationship between cases and the different
codes from the following code families: founder
 Socialization Patterns of Successors in First- to Second-Generation Family Businesses
type, continuity, family socialization, business
socialization, and socialization model. We present
textual evidence and selected quotations (verbatim
quotes) from Atlas.ti that point out similarities and
differences among cases for each variable as a
qualitative backup of our quantitative patterns.
Results
Potential Successors. Twelve of the 13 founders
in our sample had children and other family
members in the business from whom they could
choose their potential successors. Only one
founder had no descendant; in this case, the
founder was questioning whether to choose a
close collaborator (nonfamily member) or try to
attract family members inside the business,
although the risks of the latter option were rather
obvious.
I am trying, but it’s not easy … I don’t
want anyone to come here for the
money, I want them to come because
they’re interested in the work. It’s rather
utopic but … 8:48 (614:619) 1
I have invited some and am trying to
bring in others, but I’m being rather
cautious about it. I don’t want anyone
to come to sit in my chair and simply
collect a salary, I merely want to see my
work continue. If I don’t see that hap-
pening, I am willing to … I am not stuck
on the idea of family. 8:49 (621:628)
Potential successors were clear in 10 cases
where founders chose sons, daughters, or both.
Five founders considered all of their descendants
as potential successors regardless of age or
gender. In another five cases, only some of their
descendants were candidates, i.e., with daughters
not under consideration (eight of 15 daughters
were working in the business).
Females were taken into account primarily
when all of the founder’s descendants were female
(three cases) or when they were the first born.
1
8:48 (614:619)=founder 8, quotation 48, lines 614-619.
Founders also showed a noticeable preference for
creating a team of potential successors (10 cases)
that can be formed by sons, daughters, or a
combination of both instead of following the
primogeniture rule.
… all three must bear some responsibil-
ity, since they will own equal shares.
Even though each one will have to
handle something, they should discuss
things with the others, right? This re-
quires some thought, too, i.e., concern-
ing a proper organizational chart. But
so far, this is how it stands. It’s just com-
mon sense. Moreover, if there are three,
the decision will always be made by two.
It’s like that in everything: they’ll need
common sense, they’ll need to under-
stand each other, they’ll need to handle
their own areas and to make the impor-
tant decisions along with the others. 3:90
(999:1011)
Although these teams shared management
and ownership, in several cases the idea was for
the eldest son to assume leadership or for the son
to have primary leadership in the case of a team
composed of son and daughter. Thus, gender
continues to be an issue. However, we cannot find
a pattern of successor selection by founder type.
Socialization Process. As mentioned above,
maintaining family continuity in business requires
that descendants who can become potential
successors are available. The other key element
is the nature of the socialization process followed
by these future successors. A next-generation
socialization process is vital because it delineates
both the individual’s characteristics of each
candidate and to some extent his or her future
potentialities.
In our analysis, we obtained a socialization
process that comprises two main phases: family
socialization and business socialization. These
phases are common to our sample, but we are
able to find peculiarities according to founder
type.
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García-Álvarez, López-Sintas, Saldaña Gonzalvo
Family Socialization. The first stage of the
socialization process is common to all founders’
descendants and is developed during their
childhood inside the family. In this period,
descendants are exposed to both strong emotional
aspects and cognitive learning that are the basis
for a descendant’s identification with his or her
own family. Family socialization comprises value
transmission and education.
The transmission of values is a key process
in a descendant’s development because it
delineates an individual’s attitudes and
behavior. We found that value content varies
according to founder type. Thus, we continue
by analyzing values that founders try to convey
to the aforesaid potential successors while
examining the differences in value transmission
and formal education.
Values that founders intend to transmit to
potential successors. By following the analytical
procedure described in the methodological
section of this paper, we obtained a frequency
table of 28 values for each case. Founders
considered the specific role of potential
successors and selected values to be conveyed
on this basis, i.e., they built a value system that
blends family and business.
Founders emphasized the business sphere,
as shown by the fact that business orientation was
mentioned twice as frequently as the No. 2 value,
hard work. This main value shows founders’
intention to persuade potential successors to
devote their professional careers to their family
firms. However, the relevance of the business
arena is conditioned by the explicit requirement
that the successor keep the family together by
adhering to the family-orientation value.
Founders also encouraged potential
successors to learn by setting up their own
businesses, which may or may not be merged with
the family firm. Hence, founders preferred the
next generation to be founders as well. This is
expressed as autonomy and entrepreneurship,
rather than a mere focus on continuing with the
family business through growth.
Twenty-two values lagged well behind these
six main values and expressed how the founder felt
194
the potential successor should behave in general
as a person (seriousness, active life, prosperous life,
constancy, ethical orientation, rigor, simplicity,
self-discipline, ambition, gratitude) or within the
firm (determination, feeling of family, innovation,
stability, satisfaction, people orientation, positive
sense of human relations, negative sense of human
relations, long-term orientation).
Several opposing values, such as a positive
vs. negative sense of human relationships (that
is, trust or distrust of others) or ambition vs.
satisfaction, simply show the heterogeneity
observed among founders’ preferences, with
founders opting for one or the other. However,
findings show that some founders also intended
to convey two opposing values together. In other
words, they emphasized the ability of potential
successors to pursue their own rules by autonomy
while also recognizing that the founder is a
superior “power” by dependence.
Based on these different combinations of
values that founders wish to convey to the next
generation, we decided to identify the underlying
structure behind the 28 values mentioned and
display the founder’s position in the space of
values for his successors. The nonmetric MDS
solution (Kruskal & Wish, 1978) obtained by
using SPSS’s ALSCAL procedure (Schiffman,
Reynolds, & Young, 1981) for two dimensions
gives an index of misfit of 0.23 (Young’s S-stress
formula 1). Although MDS’s two-axis solution
(ALSCAL procedure) does not produce an
excellent recovery of the original order in the
data, an estimation of further dimensions does
not significantly reduce the index of misfit
between the original ranking of values and the
one estimated, but increases the complexity of
its interpretation.
The first dimension is associated with the
values of sense of family, business orientation,
honesty, hard work, and satisfaction in the nega-
tive direction and ambition, innovation, eco-
nomic interest, and entrepreneurship on the posi-
tive side. This first axis appears to reflect how
founders would like their successors to be or be-
have: oriented to the group (family) or seeking
self-realization. For this reason, we labeled it psy-
 Socialization Patterns of Successors in First- to Second-Generation Family Businesses

Table 1. Contingency Table of Values for Successors and Founders

Primary Documents = Founders

Values 1 2 3 4 5 6 7 8 9 10 11 12 13 Total
Ambition 0 0 0 0 0 0 0 0 0 0 0 2 0 2
Autonomy 1 0 0 0 2 0 1 0 1 0 2 3 0 10
Human relations - 0 0 0 0 0 0 0 0 0 0 0 1 0 1
Human relations + 0 0 1 0 1 0 0 0 0 0 0 0 0 2
Constancy 0 0 0 2 0 0 0 0 0 0 0 0 0 2
Internal control 0 0 0 0 1 0 0 0 0 0 0 0 0 1
Entrepreneurship 0 2 0 0 1 0 0 0 2 1 0 0 1 7
Growth 0 0 0 0 0 0 1 0 0 0 2 0 3 6
Dependence 1 0 0 0 0 0 0 0 0 0 0 1 0 2
Determination 0 2 0 0 1 0 1 0 0 0 0 0 0 4
Sense of family 0 0 0 1 0 0 2 0 0 0 0 0 1 4
Stability 0 0 0 1 0 1 1 0 0 0 0 0 0 3
Gratitude 0 0 1 0 0 0 0 0 0 0 0 0 0 1
Honesty 0 0 0 2 0 0 0 0 0 1 0 0 2 5
Innovation 1 0 0 0 0 0 0 0 2 0 0 1 0 4
Economic interest 0 0 0 0 0 0 0 0 0 0 0 2 0 2
Business orientation 3 1 4 4 3 1 7 0 0 5 5 1 7 41
Ethical orientation 0 0 0 0 0 0 0 0 0 1 0 1 0 2
Family orientation 2 0 5 5 0 1 3 0 1 0 0 1 0 18
Long-term orientation 0 0 1 0 0 0 0 0 0 0 0 0 0 1
People orientation 0 1 0 0 0 0 0 0 0 0 0 1 1 3
Rigor 0 1 0 0 0 0 0 0 0 0 0 0 0 1
Satisfaction 0 0 0 1 0 0 1 0 0 0 0 0 0 2
Simplicity 0 0 0 0 0 0 0 0 0 0 0 0 2 2
Seriousness 1 1 0 0 1 0 0 0 0 0 0 0 1 4
Hard work 1 1 0 2 2 1 3 0 0 2 0 2 5 19
Active life 1 0 0 1 1 0 1 0 0 0 0 0 0 4
Prosperous life 0 0 0 0 0 0 2 0 0 0 0 2 0 4
Total 1 9 12 19 13 4 23 0 6 10 9 18 23 157

chosocial dimension with two orientations: group
orientation (to the left) and self-fulfilment ori-
entation (to the right). Founders located on the
group-orientation values try to convey to suc-
cessors the attitude that their actions are con-
strained by a desire for group acceptance and that
family interest might play an important role in
their business decisions. On the other hand, those
located on the self-fulfilment values axis orien-
tation try to transmit the value of personal real-

195
García-Álvarez, López-Sintas, Saldaña Gonzalvo
ization, and family probably plays a minor role
in business decisions.
The second axis is associated with gratitude,
family orientation, hard work, constancy, and
positive human relations on the negative direc-
tion and entrepreneurship, growth, person ori-
entation, seriousness, and inner control on the
positive direction. This second axis appears to
reflect how founders want their successors to see
the firm: business as a means for the family (the
downward direction) or business as an end (the
upward direction). If founders are located near
the business-as-a-means direction, they typically
want successors to believe that the aims of the
firm are constrained by the family. On the con-
trary, those located on the business-as-an-end axis
orientation want successors to feel that the firm
predominates over family. Based on these results,
the socialization of the next generation appar-
ently considers the transmission of social values
to be most important, followed by those directly
related to the business.
When looking at the founder’s position in
the two-dimensional Euclidean space of values
(S-stress for two axes 0.2096), founders are plot-
ted in Figure 1 so that they are as far from the
origin as their profile is far from the founder’s
average profile. The first axis separates founders
trying to pass on a value system that stresses per-
sonal realization (self-fulfilment values direction)
from those who stress social acceptance (group-
orientation values).
Strategists generally agree most on convey-
ing both business (close fit) and psychosocial di-
mensions and attempt to convey self-fulfilment
and business as an end to the potential successor.
The family tradition group showed the most
change, with most cases presenting a shift from
business as an end to business as a means for suc-
cessors. A group orientation is retained in male
or mixed teams of potential successors and
changes to self-fulfilment in female teams when
they are the only available candidates. Achievers
keep both the social and business dimensions,
whereas inventors retain the business dimension
and switch to a social dimension in the case of a
team of women.
196
We found clear differences in the nature of
values to be conveyed to successors, depending
on founder type. Thus, strategist-type founders
emphasize self-fulfilment and business as an end
whereas the other three groups of founders—al-
though they agree on business as a means as a
value for transmission—opt for different blends
of psychosocial values.
Potential successors’ formal education.
Although most potential successors had a uni-
versity degree, some differences were observed,
depending on the founder’s type. The highest
level of studies was in the case of successors of
strategists and founders of family tradition
(master’s degree), whereas the majority of de-
scendants from achievers held only a high school
degree.
We also found gender differences. As a
general trend, the women had a higher formal
education than the men. Thus, in teams of
potential successors, daughters had a higher level
of studies than their brothers. In these cases, male
descendants opt for pursuing the areas that had
been the base for the firm’s start-up and
development and that belonged to the founder’s
knowledge and expertise (normally production),
whereas daughters focus their interests mainly
on areas not previously handled by family
members and that, paradoxically, are now
becoming key for business competitiveness
(marketing, IT, design).
Business Socialization. The second stage
is reserved only for founders’ potential succes-
sors and begins when successors work full time
in the business. This section addresses the modes
and timing of entry of potential successors into
the family firm and the content of the relation-
ship between founder and successor.
Timing and modes of entry. Most poten-
tial successors join the family business after fin-
ishing their formal education. However, the data
present differences between groups of founders
and between siblings. Delayed entry is the most
common mode for the potential successors of
strategists and daughters of all groups, who join
the business in a management position after com-
pleting their studies at the university and, in five
 Socialization Patterns of Successors in First- to Second-Generation Family Businesses

Figure 1. Plot of Founders in the Euclidean Space of Values to Be

Conveyed to Successors

2.0
case 13
1.5 case 2

case 5
1.0
case 10
case 11
.5

case 8
0.0
case 6
case 9
-.5 case 1
case 7
case 4
-1.0
case 12 case 3

-1.5
-3 -2 -1 0 1 2

Founder’s Type: Cases

Strategist: 5, 6, 8, 10, 13
Inventor: 1
Achiever: 2, 4, 12
Family Tradition: 3, 7, 9, 11

1st Axis: Psychosocial Dimension

Positive axis, Self-fulfilment values
Negative axis, Group orientation values

2nd Axis: Business Dimension

Positive axis, Business as an end
Negative axis, Business as a means

cases, after gaining work experience outside the
family firm.
Early entry at a low-level position was ob-
served in the case of potential successors of
achievers and founders of family tradition. We
also identified the existence of different modes
and timing of entry in three teams of potential
successors, where the first-born son entered a
low-level position at an early date, with delayed
entry observed in the case of the other siblings.
Founder-successor relationship. Several
factors affect the nature of this relationship: (a)
the time that the founder devotes to the firm in-
stead of the family, (b) the time period during
which potential successors pursue a formal edu-
cation and the distance of the educational insti-
tution from the family-firm context, and (c) the
timing of the successor’s entry into the business.

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García-Álvarez, López-Sintas, Saldaña Gonzalvo

Founders differentiate between what they
called the family relationship and business
relationship. We found differences between the
various founders’ groups. Strategists were
observed to have weak family and business
relationships with their descendants, in the first
case due to the time they devoted to the business
instead of the family and in the latter case because
the business relationship began when their
children entered the business after university
studies. Founders of family tradition and
achievers both shared a higher level of intensity
in relationships with their children than the
strategist type of founders. This finding was
associated with their group-orientation values
and their view of the firm as a means for the
family, as well as with the lower level of formal
education of their descendants. The only case
of founder-inventor we have in our sample is in
between the above-mentioned groups. He
reported a weak family relationship with his
descendants that is similar to the strategist’s
relationship, but a stronger business relationship
with the two female descendants who joined the
business—similar to the case of founders of family
tradition and achievers.
Founders also maintain different levels of
intensity in their relationships with each one of their
descendants, which varied according to their
children’s role in the family business. Table 2
summarizes the degree of intensity of founder-
descendants’ relationship according to descendants’
roles in family business. Twenty of 31 descendants
are considered as potential successors. In this case,
they shared a strong business relationship, whereas
the family one varied. Four descendants who
worked only at the firm maintained a weak business
and family relationship. Finally, seven descendants
who were not involved in the family business were
able to maintain a strong family relationship only
in three cases.
Models of Socialization
Analysis of the primary data shows that the cases
in the sample cluster in two clear models of
socialization that are based on the different
combinations of the dimensions that form the
family socialization phase (value transmission and
formal education) and the business socialization
phase (timing and modes of entry and founder-
successor relationships). Attending to their main
characteristics, these two socialization models are:
the Founder Homosocial Reproduction Model
and the New Leader Development Model.
Founder Homosocial Reproduction Model. In
this model, founders opted to convey business as
a means and group values. Potential successors

Table 2. Degree of Intensity of Founder-Descendants’ Relationship

According to Descendants’ Roles in Family Business
Strong Family Relationship Weak Family Relationship

Strong Business Potential successor Potential successor

Relationship Early entry into business Late entry into business
(11) (9)

Weak Business No successor No successor

Relationship Early entry into business Late entry into business
(0) (4)

No Business Outside the firm Outside the firm

Relationship (3) (4)

( ) Number of descendants from our sample that maintain each relationship

198
 Socialization Patterns of Successors in First- to Second-Generation Family Businesses
joined the business at an early age, with no clear
position after finishing secondary studies or three
years of college, beginning their careers in their
businesses and moving from the shop floor toward
managerial positions. The founder supervised the
potential successor’s training and maintained a
strong family and business relationship with de-
scendants.
They learned the business by working
in the warehouse with the worksuit on
until I clearly saw that the company
couldn’t make money when the lorries
were loaded by hand. The company
meant being organized, seeing how oth-
ers do things, how they are organized,
to say, “tomorrow the lorries go here and
there.” The work has to be organized
efficiently. That’s what I instilled in my
children. Simply that. 12:81 (956:964)
He did not assume a managerial posi-
tion, because he doesn’t have one, he’s
simply everywhere. He has no direct
responsibility; he’s everywhere. 6:40
(339:344)
Family and business socialization overlap. The
final outcome is that the founder and offspring share
a similar point of view regarding family business.
They also have common business expertise and
business networks. We observed the Founder
Homosocial Reproduction Model in the case of
achievers and founders of family tradition that have
as potential successors only one son. In the case of
a team of potential successors, the elder son followed
this model and the other descendants (males and
females) followed the New Leader Development
Model.
New Leader Development Model. Family
socialization begins by conveying business as an
end and self-realization values to founders’
children, with potential successors typically
entering the family business at a later date—
specifically, after finishing their undergraduate
or master’s degrees or working full time outside
the family business.
They had no real-life contact with the
company because they had to study, even
the one who’s just joined the company
was in Madrid for five years and in the
U.S. for two—a total of seven years. He’s
hardly been with the family since he was
15 years old, so had little experience with
the company through everyday com-
ments, through what could be heard or
noticed. 6:44 (383:391)
These descendants started out in manage-
rial positions related to their academic back-
grounds, with founders delegating the supervi-
sion of these descendants to managers they
trusted. As a result, the founder-successor rela-
tionship was weak and the final outcome was that
both founder and successor had different points
of view regarding the family business, with dif-
ferent business expertise and networks. We found
the New Leader Development Model in the case
of strategists’ and inventors’ descendants as well
as daughters of the founders of family tradition
and achievers when they are part of a team of
potential successors.
Founder’s Dependence Paradox
We realized that most successors of founder-
achievers fit the Founder Homosocial Rep-
roduction Model. We looked for evidence to
provide an explanation. Data made clear that
achievers need a visible successor as soon as
possible to ensure both the future continuity of
the family business (firm as a means) and to keep
the conditions that allow them to conduct
business as always—for as long as founders are
in business, even after retirement age. Thus, the
existence of a visible successor is the solution
for these founders to what is called in economics
the end-game problem (Milgrom & Roberts,
1992, p. 266).
The paradox consists of founders who do
not retire, arguing that their successors are not
sufficiently prepared and still require advice
when, in fact, the presence of a successor is what
keeps these founders in business by providing a
199
García-Álvarez, López-Sintas, Saldaña Gonzalvo
longer term outlook for the firm.
It’s important to include my children
because of my age. It provides some con-
tinuity. 3:88 (970:977)
Furthermore, the Founder Homosocial Rep-
roduction Model helps achievers to exert pressure
on successors to join the firm at an early age and
to replicate the founder’s business behavior to
some extent, while limiting the successor’s
possibilities to develop alternative professional
careers.
If my children don’t change, I have no
doubt that the company will go on. I
have no doubts because they get along
well, they have a good relationship, and
the company is running fine. On the
other hand, my children only have this
career and perhaps this also obligates
them to continue with the company be-
cause it’s their source of income. 12:68
(831:840)
Nevertheless, they are also obligated to
change to a certain extent. 12:69
(841:843)
Discussion
Founders from our sample opted mainly for teams
composed of brothers and sisters who shared
ownership and management as successors—a
result that fits recent findings reported by Aronoff
(1998) and Gersick, Lansberg, Desjardins, and
Dunn (1999) for different countries and breaks
the primogeniture rule (Llano & Olguin, 1986;
D’arquer, 1992). In our case, we found that
daughters are taken into account as successors
primarily when all of the founders’ descendants
were female or when they were the first born
(Iannarelli, 1992; Barnes & Hershon, 1976).
When the founders’ daughters are members of a
team also including brothers, they typically join
the firm in a clearly delimited position.
Although Cole (1997) points out that female
200
jobs in family business are not the most important
positions and that women generally hold jobs
with lower levels of responsibility, our results
contradict Cole’s findings. We found that
academic education is changing this trend, as
female successors typically have higher levels of
education than male successors and join the firm
to take over areas not previously handled by other
family members.
These differences in education regarding
successors’ gender highlight paradoxical con-
sequences, with men handling areas representing
the foundation for building and developing the
business in the past and women assuming
responsibilities that are strategically key for the
future, e.g., design, marketing, and information
technology. This result agrees with Dumas’ (1998,
p. 223) findings in Canadian family firms and points
out the possible existence of problems in male/
female successor’s teams if, as Kaye (1998) points
out, they do not learn how to work together.
In our analysis of the socialization process,
we found two stages: family and business
socialization. These labels emphasize the main
context of the process at each time. The two
phases agree with Berger and Luckmann’s (1966)
primary and secondary socialization. Never-
theless, we were able to make their content
explicit for the family business field and to
establish differences according to founder type.
Therefore, in the first stage (family social-
ization), the founder clearly chooses the nature
of values he or she intends to convey to potential
successors, combining both the family and
business spheres but clearly with more emphasis
on business. We also found differences in the
nature of values to be transmitted to successors,
depending on founder type. Thus, strategist-type
founders emphasize self-fulfilment and business
as an end, whereas the other three groups of
founders—although they agree on business as a
means as a value for transmission—opt for
different blends of psychosocial values. In our
research, however, we were unable to establish
any differences in value content by founder type
according to descendants’ gender. This issue is
relevant because family socialization is the most
 Socialization Patterns of Successors in First- to Second-Generation Family Businesses
important phase in one’s development, and
differences at this stage can limit descendants’
future potentiality.
Family socialization is rounded out by the
formal education of descendants, a finding where
we also identified differences. Thus, we found
that the descendants of strategists and daughters
of all groups have a higher level of studies than
the male descendants of achievers and founders
of family tradition.
The second stage (business socialization) was
observed only in the case of founders’ potential
successors, beginning with the full-time entry of
descendants into the business and including both
the potential successor’s timing and mode of entry
and the nature of the founder-successor relation-
ship. This second stage of the socialization process
presented differences between groups. Once again,
the business socialization is different for potential
successors of strategists. Thus, founders
maintained a weak relationship with their potential
successors, who entered the business at a later date.
This option is also adopted in the case of female
successors. However, low-level entry was more
common in the achiever’s successors and in some
descendants of founders of family tradition where
they commonly share a strong founder-successor
relationship. Although Barach, Ganitsky, Carson,
and Doochin (1988) identify these two models of
entry, they are not able to state any association
with a specific context, although they do provide
details on the advantages or disadvantages of both.
Our results go one step further by presenting a
pattern of entry associated with founder type and
with the gender of successors. However, further
research is needed to validate these results due to
the small sample of cases analyzed here.
Finally, we obtained two models of
socialization that clearly indicate the different
points of view of founders regarding continuity
in family businesses. The Founder Homosocial
Reproduction Model and New Leader Develop-
ment Model are consistent with founders’
business conception (García & López, 2001) and
with the value systems they intend to transmit to
their potential successors. Our results agree with
the socialization differences by gender reported
by Iannarelli (1992) and Keating and Little
(1997), while presenting differences by founder
type.
The adoption of one model instead of the
other has consequences for the future com-
petitiveness of business and for the future
professional alternatives of successors. Therefore,
strategists’ successors are in a better position than
the successors of other founders to deal with new
competitive business environments and to share
management with a professional team. Their
better position is due to their values, education
level, and experience, which also provide them
with professional alternatives for the future.
However, this task appears to be more difficult
for achievers’ successors (Founder Homosocial
Reproduction Model), who are prepared to
continue with the business as they have learned
from the founder. That is, they are able to manage
better in stable business environments and have
to devote themselves to the family firm as a first
option due to a focused training process that
reduces future alternatives.
Conclusions and Practical
Implications
This paper presents the content of the socialization
process of potential successors in first- to second-
generation family businesses according to four
types of founders recently found (García & López,
2001). Our results show that there are two different
phases common to all socialization processes—
family socialization and business socialization—
that are conditioned by founders’ values.
We also identified two patterns of socialization:
founder homosocial reproduction and new leader
development. These patterns are consistent not only
with values that the founder intends to convey to
potential successors, but also with the founder’s own
business perception. We were able to make their
content explicit, to establish differences according
to the founder type, and to present and explain the
distribution of these two socialization patterns
according to each group of founders.
Successful family business continuity in the
presently changing environment requires raising
201
García-Álvarez, López-Sintas, Saldaña Gonzalvo
potential successors who add future value to the
firm by seeking new opportunities and fostering
entrepreneurship. According to our results, the
socialization process experienced mainly by
strategists’ successors and female descendants
facilitates this goal, with the path being more
complicated in the case of the successors of
achievers, who are more likely to suffer the
founder’s dependence paradox.
Families should pay close attention to the
socialization process of their children as the best
way to ensure future family business continuity.
In this vein, it is important to offer to all
descendants the challenge of becoming potential
successors, while being consistent in value
content, formal education, and challenges,
whether female or male. This coherence should
facilitate a harmonious climate among siblings
that can be also enhanced by sharing the same
model of socialization—a critical issue for teams
of successors composed of brothers and sisters who
share ownership and management. Furthermore,
families should allow the next generation(s) to
build their own future and to develop resources
and capabilities that do not belong to the family
business. Otherwise, earlier generations should
keep in mind the possible consequences of
adopting different socialization criteria for each
descendant for family relationships and business
continuity while questioning the ethical
dimension of these criteria.
Professionals can assist families in achieving
the above-mentioned goals by identifying family
value systems and helping families to achieve a
process of socialization that can provide
alternative opportunities for the next generation.
Practitioners need to identify the type of founder
because this will impact succession and can
facilitate or interfere with their work. In the case
of achievers, it is critical to beware of a founder’s
dependency, which can be very strong when there
are only sons. Advisers can help by eradicating
this erroneous approach and recommending ways
of breaking away from it, for instance, by building
independent careers for sons or establishing rules
of relationship between founder and successors.
The above recommendations for families
202
and professionals should be further developed
to provide the right tools to change behavior.
This task is beyond the scope of this work.
Nevertheless, they raise fruitful avenues for new
research.
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Ercilia García-Álvarez is a post-doctoral research fellow at the Family Business Centre at IESE Business
School, University of Navarra, Barcelona, Spain. Jordi López-Sintas is professor of strategic marketing
management at the Universidad Autónoma de Barcelona, Barcelona, Spain. Pilar Saldaña Gonzalvo is senior
lecturer in the Management Department at the University of Barcelona, Spain.

The authors would like to express their appreciation for the insightful comments received during this
paper’s discussion at the Academic Research Forum at the 12th Annual World Conference of the
Family Business Network held in Rome and from two anonymous reviewers.

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