Obstacles to the continuity of small indigenous firms: The problem of succession in micro and small enterprises in south-eastern Nigeria, 1971--1997

Date of Completion

January 2000


Business Administration, General|Sociology, General




What happens to micro and small enterprises (MSEs) owned by Nigerians when their founding owners exit these organizations due to ill-health, retirement, or death? Do they survive such exits or die in the process? The small business literature on Africa generally and on Nigeria in particular is largely silent on the issue of succession. Only elliptical references are made to it, as if it were inferred from the high death rate that characterize the sector. Skeptical of the impact of personal factors on organizational outcomes, mainstream sociology is equally dismissive of the mortality implication of succession. In Organizational Sociology, succession is treated mainly as an adaptation function, limiting the relevance of findings to explaining the succession experience of small firms. In small business enterprises, succession has mortality implication because ownership and control are fused in one individual, the successor to this individual has to be chosen from a social context that may not readily provide a replacement, and there are no standard procedures for establishing succession. In this study, I used survey data on privately incorporated companies to examine succession, an issue that contributes to our understanding of the dual problems of high death rate and the dearth of long-established firms in the small business sector. My finding that nearly half of the closures in the sample are attributable to the succession problem has implication for research on the small business sector, and on development expectations of the sector. ^