Publication: Defining Inheritance Risk Management as A New Concept Towards Sustainability of Family Businesses
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Date
2024-06-01
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Islam Malaysia
Abstract
This study investigates the relationship between success, Inheritance Risk Management (IRM), and sustainability in family businesses. This paper is based on a quantitative approach. The population includes family-owned businesses located in Abu Dhabi that have been in operation for at least two generations. The study sample consisted of family-owned business members. However, this paper focuses only on measuring variables and testing hypotheses for the proposed measurement. Due to the complexity of the model, Smart PLS-4 was used. Through an analysis of empirical data and theoretical frameworks, the research explores the direct and mediated relationships between these key variables. The findings underscore the critical role of success in driving effective risk management practices within family enterprises. Furthermore, the study highlights the significance of IRM in promoting the sustainability and resilience of family businesses over time. The results reveal a direct positive correlation between success and sustainability, emphasizing the importance of achieving and maintaining success for long-term viability. Additionally, the mediating role of IRM underscores its crucial contribution to the overall sustainability of family businesses. The study identifies various challenges in managing inheritance risks and ensuring the continuity of family enterprises, including maintaining family control, balancing family and operational responsibilities, succession planning, grooming successors, and respecting family elders. By addressing these challenges and leveraging IRM strategies, family businesses can navigate uncertainties and capitalize on opportunities, ensuring continued success across generations. These findings provide valuable insights for strategic decision-making and resource allocation in family enterprises, guiding efforts to enhance governance structures, succession planning, and risk mitigation practices. In addition, this research contributes to advancing our understanding of the complexities surrounding family businesses and underscores the importance of proactive risk management and strategic planning for long-term sustainability.
Description
The Journal of Muamalat and Islamic Finance Research, Volume 21 Issue 1 Page (139-161)
Keywords
IRM, Endowment, wealth transfer, FamilyBalancing, and Business Interests
Citation
Abdulbasit Lutfy A. Al Obaidy, Teoh Ai Ping, Yuvaraj Ganesan & Murad Ali Ahmad Alzaqeba (2024). Defining Inheritance Risk Management as A New Concept Towards Sustainability of Family Businesses . The Journal of Muamalat and Islamic Finance Research, 21(1), 139-161. https://doi.org/10.33102/jmifr.565