Current Status and Factors Affecting Succession Planning of Small-Medium Scale Enterprises in Bono Ahafo Region of Ghana

Abstract

Small and Medium Enterprises (SMEs) play an essential role in the national economic development of any country. However, SMEs face one major challenge, which is the lack or inefficiency/ineffectiveness of succession planning. Therefore, this quantitative correlational study sought to investigate the Current status and factors affecting succession planning of Small and Medium Enterprises (SMEs) in the BrongAhafo Regions. The study used a quantitative correlational research design to achieve the research purpose. Data were collected from 140 respondents involved in SMEs from nine Municipal and District Assemblies from the BrongAhafo Region of Ghana. The result revealed that most SMEs in the BrongAhafo region (70%) had experienced succession planning, and they have a policy that guides them on succession planning practices. The study's findings further established that 60% of the management of SMEs in the region has shown commitment to succession planning, and 50% of them involved their staff in succession planning decisions. It was also identified that 60% of SMEs in the BrongAhafo region identified and groomed potential employees for future leadership positions, and 58.7% of the successors were selected based on merits, almost 50% (49.3%) of the owners of the SMEs prefer their family members as business successors. The results also indicated that five (5) component factors were obtained from the twenty variables presented to the respondents.Further analysis reduced the components into three (3), namely, internal, external, and successor's factors. A reliability test was run on these latent variables. The result showed reliability factors of 0.854, 0.798, and 0.862, respectively, implying that the three variables satisfy the essential requirement of a Cronbach alpha measure more than 0.7 with high internal consistency in the variables.The study recommends that much emphasis should be put on internal organizational improvement through coaching, mentoring, and empowering of employees by the current leadership to improve on the relationship among organizational members. If the internal factors are well managed by management as recommended, it will reduce the adverse effects of external factors that may affect succession planning.