The human factor and industrial enterpreneurship: the succession problems in Nigeria

Abstract

The thesis that African companies die with their founders has been a point of most African entrepreneurial studies (Kilby, 1988: 224; Kennedy, 198: 174f; Iliffe, 1983: 74f; Forrest, 1994: 237f). It has been controversially discussed but rarely supported by empirical evidence. The life span of African companies is therefore, an important area of inquiry in relation to economic development in African countries. Industrialization may depend, to a great extent, on the impulses provided by a large number of new and, therefore, often dynamic and innovative enterprises. Such companies arc limited in their possibilities to expand to keep up with technological development because of their lack of capital. An economy that has to constantly restart, misses out on certain growth potential. Where long-established, large private companies are lacking, the gap may be filled by parastatals or foreign multinational companies. But, as the recent history of a number of African countries has shown, this possibility is not always the best economical or political solution. The progress of self-supporting industrialization in African countries, therefore, depends on the continuation and expansion of older, well established and successful enterprises, combined with a rise in the technological level. In terms of persons involved, this means that an elderly owner-manager of a private company has to find a suitable person to succeed him or her and prepare him or her well to take charge of the business in future. The Human Factor (HF) plays an important role in this context, because several persons are actively involved in the succession process. A well prepared succession is important also from the human resources point of view, in the sense that highly motivated and successful owner-managers pass on their experience and knowledge to the next generation.