Pierre Sindambiwe (2020)
The challenges of continuity in family businesses in Rwanda
Focusing on a developing country, this study investigates how an owning family builds its business’ continuity. While scholars of family businesses tend to depict the continuity of a family firm in terms of family succession, preserving the family legacy, or the firm’s longevity, in the social context of a developing country that is dominated by instability and hostility, family firms are subject to day-by-day survival risks. My approach is viewing family businesses’ continuity as day-by-day survival for the sake of ensuring the long-term orientation of the family businesses in the context of a developing country. The family is situated in a broader social context, and therefore the business is embedded in the family’s social networks that cannot be detached from the country’s social context. The developing country context is important because of its culture, politics, and history that differ from a developed world.
In this thesis, the continuity of family businesses is understood as: (1) sustaining the family’s legacy coming of the founder’s achievements, (2) succession, sustaining the business beyond the founder’s tenure, and ensuring that both the family and business stay together, and (3) longevity, ensuring a long-term orientation which is a crucial characteristic of all family businesses. This last category is relevant to this thesis because long-term orientation is achieved through futurity, persistence, and continuity patterns. This thesis focuses on continuity as daily and short-term survival to ensure the long-term orientation of a family business.
The findings of this thesis show clearly that family businesses in Rwanda are focused on preserving their firms for retaining the family legacy, but unfortunately, they are unable to plan for a long-term legacy. I posit that short-term survival, repeatedly, will lead to long-term survival and, subsequently, to longevity. The findings highlight the role of the specific context and associated cultural aspects of continuity in family businesses. The three aggregate dimensions developed present three main challenges to the continuity of family businesses in Rwanda. First, due to Rwandan cultural obligations of inheritance by the next generation, both the founding generation and the next generations are committed to family businesses’ continuity. Unfortunately, there is a detachment among generations in Rwanda, which is contrary to the cooperation expected in family businesses. Second, the uncertainties and inertia resulting from the absence of co-ownership and the inter-generational distance due to cultural aspects lead to separate and parallel planning for businesses’ continuity. Third, when it comes to the involvement in the management of family businesses, inter-generational conflicts and uncertainties result in weak family embeddedness that may push some family members away from the family businesses. This situation is a challenge because the absence of co-management between the incumbents and the next generation is abnormal since both parties, like dancing partners, need to manage the transition.