Communicating innovation and sustainability in family businesses through successions

Small and Medium Enterprises (SMEs) contribute significantly to the economy despite the survival rate becomes lower through generations. This study aims to develop a communication model suitable for SMEs during succession for innovation and business sustainability. Nine innovative manufacturing family SMEs in Thailand are selected using assembled multiple-case study method, and in-depth individual interviews are conducted using data triangulation method which the incumbents, successors, and long-serving non-family employees as participants from each business. There are two main findings. Issues regarding organizational innovation, social capital in the form of internal and external network relationships, traditional and territorial knowledge, succession planning and procedure, and sustainability-driven mindset should be communicated, formally or informally, during the succession process. Secondly, the incumbent’s contradiction between his intention and action, the successor’s ability and willingness, and the staff’s response to changes during the succession process, are the main communication barriers against achieving innovation and sustainability. By implementing the communication model to the family business, the incumbents and successors can maximize the business’s structure and resources to be better understood throughout the firm with the business maintaining or reinterpreting its cultures, values, and traditions to the next generation. The model allows family businesses to have better awareness in terms of innovation management, social capital, innovation with their background knowledge as capital, succession, and business sustainability. Successful communication of the topics and concepts during succession should raise the standard and competitiveness of family businesses domestically and internationally.