Family businesses, often small or medium-sized, form the backbone of Indonesia's economy. They create jobs, drive growth, and help keep communities stable. Yet, keeping these businesses alive after the founder steps down is a major hurdle, with many failing to make it to the next generation. This research dives into how these Indonesian family-owned SMEs plan for that handover, seeking to pinpoint what makes a leadership transition work and a business last. Rather than relying on surveys, this study takes a closer look through detailed case studies of specific businesses. Data are collected through semi-structured interviews and direct observations allowing for a comprehensive understanding of decision-making processes within family businesses. Guided by Socioemotional Wealth (SEW) Theory, the study highlights how succession decisions are shaped by the desire to preserve non-economic values, including family control, identity, emotional attachment, and dynastic continuity. Consequently, family firms tend to view succession not merely as an efficiency-driven decision, but as a means of safeguarding the family legacy. The results show that in Indonesia, succession planning tends to be unofficial and revolves around the founder, deeply influenced by tradition, family pressure, and personal bonds. Using this work adds to our understanding of family businesses by grounding theory in the real-world context of Indonesian SMEs. It shows how culture, family ties, and long-term planning are tightly woven together. The results offer practical insights for founders, successors, and policymakers seeking to design more structured and sustainable succession strategies that enhance the longevity of family enterprises.

Authors:
Edward Nagaseta, National Quemoy Univeristy, Taiwan
Felicia Maria Novianne, National Quemoy Univeristy, Taiwan
Pin Chen Chuang, Xiamen University, China
Hsing Kuo Wang, National Quemoy Univeristy, Taiwan

About the Presenter(s)
Mr. Edward is currently a master's student at the National Quemoy University, Mr. Edward's current position is studying and also writing his dissteration for graduation with Indonesia as a main topic of interest.

See this presentation on the full schedule – Monday Schedule

Bookmark