The Incumbent's Dilemma when Exiting the Firm: Torn between the Family and the Corporate Logic

When considering their own exit from the firm, incumbents are often challenged with two dilemmas. First, they need to hand over management to either a family-internal or a family-external successor. Second, they are often confronted with the trade-off between the successors' levels of ability versus willingness, particularly when relying on family-internal candidates. Based on institutional logics literature we argue that these dilemmas arise as the corporate and the family logic lead to conflicting expectations regarding which exit route and which candidate to prefer. We hypothesize that past experiences, the level of education, and situational stimuli affect incumbents' preferences for different succession candidates by focusing individual attention on either corporate or familial goals. In order to test our hypotheses we rely on responses to an exit scenario, completed by 2024 owner-managers of Swiss SMEs. Our findings contribute to literatures on entrepreneurial exit, institutional logics, and family firm succession.