Family embeddedness and intergenerational transfers: the mediating role of reorganization among small and medium family owned enterprises

Globally, only 20% of family-owned businesses survive for more than 60 years. This study examines the mediating role of reorganisation in the relationship between family embeddedness and intergenerational transfers within small and medium-sized enterprises (SMEs). Data from 253 family-owned businesses, including owners and managers, were analysed using Smart PLS. The findings reveal a significant positive relationship between family embeddedness, reorganisation, and intergenerational transfers, with reorganisation partially mediating the relationship between family embeddedness and intergenerational transfers. This suggests that business owners should prioritise reorganisation by improving communication, fostering honesty, and promoting shared values within the family business; however, the cross-sectional survey design limits generalizability, particularly because perceptions of intergenerational transfers vary. Further research, including experiments and interviews, is recommended to explore these differences across regions and sectors. Ultimately, family embeddedness and resource reorganisation are critical for overcoming challenges such as family conflicts and generational differences, ensuring long-term business success.