Understanding Founders’ and Successors’ Expectations of British Higher Education Related to the Chinese Family Business: An Extrapolative Expectation Perspective

Abstract

The importance of family business and thus family business succession is well supported in the literature. As part of their succession plan, Chinese family businesses tend to send the prospective successor to study in an overseas university. However, there is little attention paid to the effectiveness and efficiency of the successors’ overseas education and its impact on the family business succession. In particular there is a lack of attention on the expectation of the founders and successors’. This thesis is about exploring and explaining the similarities and differences in expectation of successors’ overseas education between founders and successors of family businesses in China. 60 informants comprising 30 pairs of successors (who were studying a business course) and business founders completed identical questionnaires separately. This was then followed by in-depth one-to-one interviews with respondents.

Adopting extrapolative expectation theory, which holds that expectations are caused by prior experience, a comprehensive conceptual framework is developed, followed by corresponding hypotheses. The findings support the hypothesis that the business founders’ expectations about the business-related factors of a business degree course are significantly higher than the expectations of successors themselves. On the other hand, the expectations of founders and successors for non-business-related factors were similar, for instance: for the development of English skills. A follow-up in-depth qualitative research in the form of interviews was conducted with the business founders and successors. Qualitative data analysis helps to reveal that while there are some interesting differences associated with respondents’ background, gender and personality, the result of the analysis shows that work experience plays a key role in explaining the difference in expectations of the founders and successors. In addition, four competing theories (intention, relationship, gender and personality) failed to explain such differences.

The thesis makes a significant contribution to knowledge in understanding the expectations of the family business on successors’ overseas education. It shows that, due to differences in work experience, the expectation of business founders and their successors differ significantly in many aspects related to the successors’ overseas education. This is important as literature tends to consider the multiple influences of various individuals within a family on major decisions as one decision-making unit. The differences in expectation have major implications in their choice of courses and satisfaction of successors’ overseas education, which in turn affects the effectiveness and efficiency of the longer-term family business succession process. The findings of this thesis help the family business, policymakers and researchers to see a potential issue in the family business succession process that is largely ignored. It is suggested that more resources can be put by policymakers into raising awareness of the different expectations that are identified. Family businesses should work on the differences in expectations including enhancing both understanding and the successors’ solid work experience before studying abroad. The findings of this thesis highlight an important but unresearched area for researchers to be further explored. Finally, the project design, which adopts a complementary mixed-method approach and compares the views from business founders and successors, is unique and helpful to understand the research question through different lenses.