(Why) Does Small Business Succession Matter, Sociologically?


Karen Foster, Dalhousie University

Small business succession has emerged as a policy problem nationally, with the majority of small business owners in Canada approaching retirement without a written succession plan. The problem is even worse in traditionally rural sectors like agriculture, where the fate of food production writ large appears to hang on what happens to farms when they close without a successor. One of the more common framings of the succession problem focuses on the proprietors’ average age, their lack of formal succession plans, and the fact that no specific successor is lined up to step in when they retire; attention has focused on the ‘next generation’ and figuring out why they might not ‘want’ to take over extant businesses. With the succession problem narrowly framed around individual businesses’ succession plans, and with succession understood as a discrete transaction—the hand-off between old and new—the most sensible solutions, almost inevitably, target succession planning and matchmaking between young entrepreneurs and sunsetting businesses. But what if succession is an economic behaviour embedded in something more sociological? And what if it tells us something about contemporary capitalism? This presentation draws on interviews with 40 people representing 27 small businesses in rural Atlantic Canada who were either planning for, approaching, or reflecting on their experience with succession. The SSHRC Insight-funded Seeing a Future project, which began as a fairly ‘applied’ study concerned with identifying and addressing barriers to family business succession, has arrived at more fundamental questions about why succession emerges as a social and policy problem in the first place. I will show how interviewees’ stories shed light on the features of contemporary capitalism -- such as productivism and growth-centrism -- that make the ‘unbroken chain’ of succession far more important than it might otherwise be. Moreover, I will argue that the economist or policymaker’s narrow focus on succession as a discrete transaction between two parties, while potentially captivating for the human drama involved, leaves rich sociological material on the cutting room floor. Putting succession in its wider context, as Economic Sociology can do, reveals the moral dilemmas faced by small businesspeople, particularly those who see their embeddedness in their communities as essential to their business’s success and value.

This paper will be presented at the following session: