Determinants of successful generational succession in Peruvian family businesses: An empirical analysis of administrative functions

Abstract

This study aims to examine how the four core elements of the classic administrative process (planning, organizing, leading, and controlling) influence generational succession in Peruvian family businesses, a sector characterized by critically low intergenerational survival rates that threaten national economic sustainability. A quantitative, cross-sectional, and explanatory design was employed, collecting data through a validated 44-item questionnaire administered to 385 business owners belonging to the Association of Family Businesses and chambers of commerce in five regions of northern Peru (La Libertad, Piura, Lambayeque, Cajamarca, and Tumbes). Ordinal logistic regression was used to estimate the effect of each administrative function on the perceived effectiveness of succession. The results show that planning (β = 0.523, p < 0.001; OR ≈ 1.69) and leadership (β = 0.100, p = 0.011; OR ≈ 1.11) significantly and positively increase the likelihood of a successful generational transfer, while organization has a significant inverse effect (β = -0.245, p = 0.035), suggesting that excessive bureaucratic rigidity can hinder the flexibility needed for a smooth intergenerational transition. Control mechanisms do not show a significant influence, reflecting the prevalence of trust-based relationships over formal oversight. The practical implications indicate that founders and business partnerships should prioritize formal succession planning and the development of inspirational leadership over rigid structuring or control mechanisms to strengthen continuity, employment, and the long-term sustainability of family businesses in emerging Latin American economies.