# CRITICAL PERSPECTIVES ON SUCCESSION PLANNING IN THE COMMUTER TRANSPORT SECTOR IN ZIMBABWE.

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7 International Journal of Business and Social Science Vol. 3 No. 5; March 2012 Table 8 Calculation of the expected frequency on succession planning xpected frequency Response Succession plan No succession plan Total Very important 18*9/28= *19/28= Important 3*9/28=0.96 3*19/28= Not important at all 6*9/28=1.93 6*19/28= No idea 1*9/28=0.32 1*19/28= Total Calculation of χ 2 χ 2 = (O-) 2 where O=the observed frequency of any value =the expected frequency of any value 236 Table 8 Calculation of χ 2 0 (O-) (O-) 2 (O-) (0.32) (0.21) (0.04) (0.07) χ 2 =0.488 Calculation of degrees of freedom V= (Rows-1) (Column-1) = (4-1) (2-1) = 3 At 5% level of significance, the cut off point of χ 2 for 3 degrees of freedom from the χ 2 tables is 7.82 As the calculation value (0.488) is less than the table value (7.82), we accept the null hypothesis and conclude that succession planning is independent of the importance of succession planning. The results show that one may view that succession planning is very important but that does not mean that he/she will have the succession plan. There are other factors which may hinder the implementation of the succession planning process which includes fear of conflicts between family members, lack of willingness by the potential successor and the unavailability of the potential successor. The researcher also sought to test the hypothesis to show whether family owned businesses fail due to lack of succession planning as shown below; Hypothesis testing 3 H0: Businesses in the second generation fail due to lack of succession planning H1: Businesses in the second generation fail due to other factors Table 9 stablishing the contingency table of failure Response First generation Second generation Total Business fail due to lack of succession planning Business fails due to other factors besides succession planning Total Source: Primary Data

9 International Journal of Business and Social Science Vol. 3 No. 5; March 2012 Table 12 stablishing the contingency table of successors Observed frequencies (O) Transfers to a Transfer to a Nonfamily Sell to a third party Total Family member member First generation Second generation total Source: Primary Data Calculation of expected frequency () =Row total*column total Grand total Table 13 Calculation of expected frequency () of successors xpected frequency () Transfer to a Transfer to a Nonfamily Selling to a third Total Family member member party First generation 15/28*21= /28*4= /28*3= Second generation 13/28*21= /28*4= /28*3= total Calculation of χ 2 χ 2 = (O-) 2 where O=the observed frequency of any value =the expected frequency of any value Table 14 Calculation of χ 2 Observed frequency (O) xpected frequency () (O-) (O-) 2 (O-) (1.25) (0.86) (0.39) χ2 = establishing the degrees of freedom (v) V= (Rows-1) (Columns-1) = (2-1) (3-1) =2 At 5% level of significance, the cut of point of χ 2 for 2 degrees of freedom from the χ 2 tables is As the calculated value (1.2463) is less than the table value, we accept the null hypothesis, that is, we accept that most successors of passenger transport businesses are family members. The results are in line with the situation at hand because all the second generation respondents who were interviewed and who completed the questionnaires were family members of the founder. These companies include Munenzva Bus Company, Kubvoruno and Musasiwa.Companies in the first generation that have succession plans are also transferred to family members. These include Kukura Kurerwa Bus Services and Tenda Bus. The results share with literature as highlighted by Volker (1997) in which he argued that it is the norm of the Zimbabwean culture that the inheritance of the father should be transferred to the family member especially the first son. Ward (2000) also highlighted that family businesses are usually transferred to family members regardless of the competency of the successor. This resulted in the increase in the failure rate of the family business in the second generation as the business is transferred to incapable hands. 238

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