Research Gap
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Research gap
Institutions still struggle with the issue of succession planning given lack of strategies and approaches in place to respond to the needs. As the global business environment undergoes dynamic changes and the level of competitiveness within several industries rises, there is a need for proper processes to ensure that the companies keep up with the trends in the sector and the markets. The vital essence of this is the continuity of services and operations and avoiding disruption of services through disturbance of human capital capacity (Dai, De Meuse, & King, 2011). Companies must have ways of developing and maintaining human capital to ensure that it achieves the best from the workforce.
Succession planning process is critical in identifying talents and competencies within an organization, and developing them for the benefit of the company (Carcary & Whelan, 2011). Even as many institutions are aware of the need for and the importance of succession planning, there are no plans in place yet to ensure that they put ideas into actions. Midsize companies do not address the issue of succession planning in a systematic manner and for those that have the planning in place it is not taken seriously. Organizational size, structure, and challenges are factors that can impede effective succession planning as most companies do not prioritize or predict the future of leadership if a position falls vacant (Stadler, 2011).
Research available argues that organizational structure, size and challenges can impede adequate succession. Outlining factors are contributing to the problem; the problem is related to the factors and forms an overview of possible solutions (Fink, & Hargreaves, 2012). Mid-sized companies are on increase demand of expertise of senior management to continue operating within the economic boom. Mid-sized companies are critical drivers of the economy, and consumers depend on them for varied products. Operations of the company’s impact economic performance, and failure of them to meet demands have far consequences (Fink, & Hargreaves, 2012). Even though the developmental interventions on succession planning may be different, midsized companies require a well-structured succession planning to ensure that supports organizational stability and sustainability by established processes of staff training and talent development (Berger & Berger, 2010).
Companies need to prioritize succession planning to avoid any disruptive changes in the process of their operation simply because a person dropped out of a role (Stadler, 2011). Lack of succession planning gives a company a perception that an individual owns an area and that by moving out of the institution, not all the programs and operations relevant to that situation would function appropriately. The effective plan removes this form of the monopoly of ability and leadership and tries to neutralize harmful effects when there are leadership vacancies and to ensure that there are people prepared to take up the roles (Conover, Ebbers, & Samuels, 2010). Firms can plan with the respective positions that exist to have them occupied with the appropriate people with talents and competencies that match the vacant positions.
There is a need to develop normalized systematic interventions that would ensure mission, services, and success of a company are undertaken in continuum even if the key holders or performers of such services exit the organization at any particular time (Stadler, 2011). Key employees leaving an organization or positions falling vacant is inevitable, and the companies need to prepare to fill any critical position once the vacancy exists. By companies lacking a succession plan, it is hard to respond to the needs of the company once any position falls vacant. Even as businesses in Singapore have trend set by the political will, the number of such groups having an active succession plan is still low making it difficult for the enterprise to have interventions that respond to the global dynamics.
Any primary company objective is to survive (Adewale, Abolaaji & Kolade, 2011). Talent retention, turnover rate, career development, supervisor's support, organizational supports, and nepotism form the basis of this organizational succession planning (Adewale, Abolaaji & Kolade, 2011). Continuity of the business has to be achieved despite death or exit of their key leaders. Successors can be family members or outsiders. Whichever the case, an effective succession plan is necessary. Such a policy should not be taken as an afterthought but should be part of the establishment of the organization. Failure to put in place an effective successive plan puts the operations of the business in a precarious situation.
Midsize companies have significant challenges responding to vacancies in leadership positions given the lack of policies and strategies to crown capable employees with capacity to fill such vacancies (Almutairi, Emami, Idrus, & Moradi, 2012). Midsize companies have problems with succession planning from the recruitment process and maintaining of employees given the lack of rigorous process of recruitment and minimal incentives to keep employees (Pennell, 2010). Employee turnover is higher in midsize companies as compared to other institutions and thus, can disrupt the succession planning process and the investments on building employees. The higher rate of workforce turnover may be the reason for the lack of comprehensive succession planning within medium companies.
Failure by many organizations in Singapore to address succession-planning issues presents a challenge when any position in the organization falls vacant due to their size and structure (Sullivan, 2012). Organizations should develop interventions that are geared towards ensuring that the mission, services, and successes are not impeded when key people in the organization at any one time. The attitudes of some executives of the companies can be used to explain the reason by the failure by many companies to put in place a succession plan. Their ego prevents them from thinking that someone else can take up their positions. A challenge is therefore presented to succession planning since leaders in many instances fail to include an exit plan as part of their company's strategic plan. In case a company is family owned, potential successors need to be imparted with the skills and competencies necessary to run a business. It is the reason many businesses end up closing at the point of death of their founders.
Midsize companies require the capacity to nurture talents and capabilities of employees relevant to the different positions gave the experience and skills of those holding various positions. The medium-sized firms may also lack the resources that and committed time to the development of employees through succession planning, which may derail the implementation of succession planning in companies (Barner, 2011). Less than a third of the total number of midsize businesses in Singapore has succession plans in place, yet not all of them implements the programs. Lack of importance created around the area of succession planning among the companies is one reason succession planning may not be rolled successfully.
Mid-sized companies demand expertise in senior management positions to be able to continue their operations especially during an economic boom (Sullivan, 2012). If proper intervention measures are put in place, organizations can accommodate change without necessarily experiencing failure due to changes in leadership. There should be an understanding that turnover of employees, whether in low-level positions or high-level positions are bound to happen. There is no need for stalling of a company's operations when such key people exit the company for any reason at all. Transitions should allow the company's operations to continue smoothly. That is only possible if there is in place a succession plan that focuses on the company achieving its vision and continues with its mission even when the founders are no more. Every successive leadership should be in a position to steer the company on the route of progress and make it better than it formerly was. It is the duty of the current leadership to ensure that the company continues to enjoy a competitive advantage over its rivals even when there is a change in management.
There should be a clear understanding that mid-sized companies do play a significant role in the economy. Consideration in succession planning should take into account the economy of a country. Any problems with the operations of a company will have an adverse effect on the economy. That calls for a need for businesses to well-structured succession planning for stability and sustainability. Processes and talent development should form part of any succession planning (Sullivan, 2012). Even though the company should work to grow as the economy of the company grows, a slowdown in the economy should not lead the company to experience slowed growth. The company should be able to shield itself against external factors.
Developmental interventions in succession planning would ensure that the succession planning process is innovative and transformative to both a company and the leadership (Carter, Goldsmith, & Ulrich, 2012). Groups must make sure that their succession planning process responds to the dynamics of the global environment and keeps pace with the changing trends within firms. The economy of Singapore relies much on midsize companies’ growth, and performance and the companies must have in place processes that will ensure continuity. Developmental interventions are critical for firms in succession planning to ensure the transformation of the people and processes.
Available means and ways to developmental interventions should be deployed to undertake the mission of the organization. Growth and career training of employees in their existence in the company should form part of the response measures (Broedbeck & Crawshaw, 2011). Stability of the organization despite challenges faced in leadership turnover should be the focus of the succession planning of the organization (Brodbeck & Crawshaw, 2011). Succession planners need to work therefore towards ensuring that the company goes beyond the individual. It should be self-sustaining. There should be operating systems that make the company independent. These systems should be the basis of developing a succession plan. The systems should be the basis of decision-making within the organization.
Anyone joining the ranks of leadership should only make the systems better rather than make them dependent on him or her. The decisions of individual leaders and successors should be determined by the systems put in place by the company instead of the systems depending on individual decisions. That is because the company may have to go through turmoil in every transition stage since a change in leadership would translate into a change of the working systems of the company. The only caution that should be taken here is that the systems should be set in such a way that they are flexible to the dynamics of the market such that the market dynamics do not at all interfere with the operations of the company. A company should be able to adapt to any changes in the market without having to slow down on progress. Its growth should be sustainable at all events.
A succession plan needs to take into consideration labor planning. There is a need for timely forecasting of labor needs in any company. This labor planning need to have strategies for acquisition, retention and effective utilization of employees to ensure the needs of the company are met (Kingir & Mesci, 2010). The human resource needs of a company form an essential part of planning. With proper strategies, the current and future needs of the company will be looked into and appropriate measures put in place. These needs should take into consideration the growth and development of the company now and in the future. Leadership needs will be taken care of in the succession planning strategy.
The departure of employees can be through voluntarily through retirement or involuntarily either through death or sacking ((Adewale, Abolaji & Kolade, 2011 the result of these departures are vacancies within the organization that has to be filled up. These jobs may lack personnel with adequate competence and capabilities. That calls organizations to start planning for filling of these vacancies before they are even created. When jobs are created, the company will have effective mechanisms to replace those who have exited the company. These mechanisms will ensure that the operations of the company will not be interrupted. The transition process will be smooth since the company has already set structures that ensure the proper conduct of operations of the company despite the departure of any of its leaders.
This prior planning to fill up these positions is what is known as succession planning. Organizational survival requires a plan for succession for older employees or outgoing ones (Hazarika, 2009). There are several succession plans available for organizations to choose. However, some would be more preferred than the others would. Other may not be favorable for the business since they would require winding up the business or even selling it out to competitors. The aim of every succession should be for the progress and continuity of the business entity. Business operations should not come to a halt just because a sequence phase is in place. At its establishment, a business should have an elaborate plan to ensure that the firm continues its operations competitively and can adapt to the dynamics of the market. Selling out or winding up should only be considered as a last option when all the other strategies have failed to work.
Despite existing systems, no single person can run a business the same way as the other. Changing business environments call for a change in the way we do business. Therefore, successors have to be innovative and work towards matching business operations with the current market demands. There should also be a consideration to forecasting. Succession planning needs to take into account that companies do not operate in static environments but rather in places where changes occur every day. Innovations are being made, and new competitors are emerging. The business should be able to adapt to these changing environments and be able to deal with emerging competitors.
With the opening up of the global market, many companies are finding themselves with the challenge of a widening talent gap. Succession planning therefore should take into consideration processes that will work for both the individual and the company. Succession planning remains informal in many companies thus creating huge gaps in skills and performance. That calls for a need to invest in tools and technology for talent development within a company. Companies, which will invest in this area, will be able to survive in an expanded business field. They will view globalization as an opportunity for growth rather than a threat to their existence. The changing market scenario also means that older business models cannot work efficiently for the company. There is a need to sensitize workers and managers within the organization of the changing business trends. That will prepare them for succession and bring the company up to par with the current market needs. If the workers can work in these changing environments, they will be able to shield the company against the tremors brought about by change. The business will be able to stand the test of time and outdo others. One important aspect of business can maintain a competitive advantage over its rivals. If it can match up with the changing market trends and adapt to new technological innovations, it will be able to rise above the rest and create a niche for itself in the market.
Another major challenge in succession planning has to do with the fact that companies have to contend with technological innovations. These changes are making catching up with the current market needs an uphill task. Companies need to invest in research and to adapt to current technological innovations. That should integrate into succession planning process for the company to avoid being phased out by their competitors. Planners who fail to factor in technology are setting up their business to major threats. Eventually, their opponents no matter how insignificant they may be will be able to catch up with them or even overtake them when they adopt the new technology.
A company's inability to motivate and retain key employees can also pose a significant challenge in succession planning (Muhoho, 2014). That may mean that potential successors may exit the organization even before getting an opportunity to drive the mission of the company. Motivation involves proper remuneration for the job done among another thing. Sometimes, the organization may not be in a position to give its key employees the same or better rates than their competitors leading to an exodus of key employees from the company. Conducive working environment and involvement in decision making also form part of employee motivation. Employees work well when they can identify with the organization and feel part of it. If they feel like outsiders, they will be looking for a way out, and this might not be useful for the operations of the business. The organization might even lose good potential successors in the process since employees will look to work in areas where they are appreciated.
Some organization may not have all the details about their employees. This limited knowledge about the employees could pose a challenge while planning for succession. Sometimes qualified persons may be left out of the succession plan. Some of these employees may be disgruntled in case someone less qualified than them is picked. The company might then end up losing good employees or even have to work with rebellion from the disgruntled employees, which might not be suitable for the enterprise (Muhoho, 2014).
Lack of awareness especially by those in positions of leadership is also a significant hindrance to succession planning. The leadership may not prepare itself adequately for succession just because it lacks the necessary information regarding succession planning. In such a case, the company may be faced with a real transition problem when the term limit of such individuals expires or in the event of their death. Some companies may have to wind up in the case of the death of their leader just because there was no succession plan in place (Muhoho, 2014).
Ineffective business practices and lack of a clear-cut vision for the business also poses a challenge to succession planning. Without a clear vision for the business, it will be difficult to put in place a succession plan, and if it is there, it may not have the survival of the business in mind (Muhoho, 2014). Best business practices are the lifeline of successful businesses. These practices include having a clear vision for the business and not only establishing a business for the sake of it. A business that follows sound business practices will be able to have proper succession planning strategies and will be able to survive long in the market. Robust processes need to be built to overcome the challenges that may face the company during the transition stages. This succession education will enable the successor to steer the company forward following the current trends in the market. That will have the benefit of creating companies that will adapt effectively to the needs of the market (Cascio, 2011).
Talent development needs to be part of employee motivation in a company and therefore should form part of succession planning. The talent development processes have to include performance management, training, and development needs. Consideration has also to be placed on compensation and needs assessment for the company. This process will ensure that the company can get the best successor when that time comes. Succession will also be smooth since needs identification will already have been worked out and the best-suited person regarding performance and steering the strategies and mission of the company will have been identified (Adewale, Abolaji & Kolade, 2011).
In planning for succession, succession planners need to know that succession planning is not just a matter of changing the company’s chief executive officer; it involves changing of systems also. The other workers should also be taken into consideration also. Therefore, automating the systems will make the work of succession planners easier.
It is also important to know technological innovations are changing the way we do business. Those companies that ignore technology do so at their peril. Technology reduces the time taken for transactions to be handled as well as improves the marketing ability of the enterprise. It is also essential for integration processes and keeping of databases. The competitive advantage of companies is nowadays determined more by how well a company adapts to technology. Many companies have found themselves at the receiving end due to their reluctance to adapt to modern technology.
Every plan within an organization should be geared towards its survival. That requires investment in time and energy by all those involved. Gross (1968) argues that the concept of survival is a convention of every organization. Every organization should envisage its future not a few years from the present but many years ahead.
Organizational survival lies in the succession strategic plans of such an organization. With proper succession plans, an organization can outlive its current leadership and move on for many generations ahead. This succession plan should envisage changes that are likely to take place shortly as well as in the remote future of the organization. The market trends and technological changes should be put into focus while developing a training strategy for potential successors.
Lack of a succession plan has meant that most companies respond to a crisis when they are in succession phase. Boyle (2009) suggests that more boards and managers should nurture a stable of successors instead of an emergency forcing their hands. A survey carried out in 2010 by Korn/Ferry reported that about 98 percent of companies in America regard succession planning as an important piece of the overall process of corporate governance. However, despite these beliefs, only 35 percent of these companies have a succession plan in place. That means that these companies are unprepared for the unexpected departure of their CEOS (Korn/Ferry Survey, 2010).
The changing trends in the global market dictate that companies change the way they do business. There is a need for formalized plans in succession planning by companies. Companies are now warming up to formalized succession plans, and therefore, research is required in equipping these companies with the right strategies to do strategic succession plans.
The researcher observes the need to do thorough research in the place of technology in succession planning. It should be noted that the future of many companies lie in the way these companies use technology. Therefore, succession plans should shift their focus from just changing the administration to comprehensive needs of the company. This area needs to be properly looked into to enhance smooth transitions for companies. The companies need to work towards keeping themselves up to date with the changing market trends. Succession planning in the future seems to be more concerned with how the companies are prepared to do research on the current market needs.
Skills training and career development will now focus on the use of technology to automate the operations of the company. The companies will have to ensure that they are at par with the innovations and that they can quickly take up new technologies immediately they come up. Planners will have to focus more than changing the chief executive officers of companies to looking into how systems can be well modified to suit the needs of the current market dynamics.
Succession planning needs to be a priority immediately a business starts its operations. Succession planners need to foresee changes that are likely to occur in the market shortly and focus training in these areas. Successors will need to be equipped with the right skills that will enable them to remain competitive in a changing business environment.
The opening up of the global market presents new challenges and thus a point of focus for succession planners. Businesses are finding themselves face to face with stiff competitions from international companies that were before not a threat. Succession planning has, therefore, to focus on how to face this competition without winding up the business. That planning needs to focus on how to remain competitive not only locally but also globally.
Therefore, more research remains to be done in succession planning. Researchers have to look into specific areas that will make succession planning useful for business operations and create a successful business that will last for generations. These firms will also have to contend with changing market trends and face stiff competition arising from the globalization of market.
Succession planning has everything to do with the future of the company. Proper planning will ensure a smooth transition of the after the exit of the current leadership. Succession planning is more than planning the exit of the current administration. It goes further to look into the future of the business. It involves developing working systems that will ensure the business entity continues even after the current managers' exit and continue to do so effectively.
There are several challenges facing succession planning. These challenges determine the success or not of any company. Some of these difficulties have to do with lack of requisite knowledge by those involved in success planning. Some of them have to do with human resource development. Such include talent development and skill training. There are also those that involve technology that has to do with automation of a company's operations.
Succession planning has to put in mind the human resource requirements of the company. Both current and future labor needs of the company should be taken into consideration while developing a succession plan.
The survival of the company should be the focus of any succession plan. Planners should concentrate on the future of the business while thinking of an effective succession plan. Those involved need to have the future of the business in mind when working out a succession plan. It is vital that planners work towards a smooth transition while developing a workable succession plan.
There remains a research gap for succession planning. The place of technology needs to be the point of focus while thinking about a succession plan. It is also vital to find out why many companies have not put a succession plan in place despite knowing the significance of such a plan towards the existence of the company as well as active operations in the company. This research gap should form the point of study for the researchers to suggest how actually succession plans can be taken up by companies.
With the challenges encountered by midsize companies, there is a need for interventions that will ensure that the companies benefit from the succession planning process. Singapore is a middle-income economy that depends on midsized companies as primary drivers of the country’s economic progress. By the study focusing on the developmental interventions in succession planning that the companies are yet to adopt, it intends to give insight to the midsize companies that form part of the country’s economy on the importance of succession planning.
There is a need for a distinction between the ordinary successions planning process that most midsize companies do not take seriously to developmental approach that meets the needs of businesses. According to Barner (2011), developmental interventions for succession, planning exposes institutions to alternative initiatives that ensure they benefit from employee development measures constituted by the companies. Midsize companies have limitations in resources and capabilities making them only resort to actions that will be beneficial to them. Developmental interventions for succession planning ensure that in the process, companies can gain in terms of time and resources invested in developing employees (Gandhi, & Kumar, 2014).
There is a need to determine the extent and the nature of developmental interventions in succession planning relevant to mid-size companies (Tracy, 2012). It will influence the thinking and the perception of midsize company management into adopting interventions through succession planning that would benefit the company in the process and ensure that there is no vacuum in filling a vacancy (Sullivan, 2012).
A focus on developmental interventions in succession planning responds to the shifts in companies and the general business environment and the need for a succession planning that focuses on not only the end but also the means. Succession planning needs to focus on developmental interventions for midsized companies in middle-income countries like Singapore (Stadler, 2011). The knowledge generated may be essential for businesses to have a clear sustainable succession planning that will benefit them over a period through to their future focus.
Research holds a significant position in the relevant profession and for the management of companies by exploring the current state of succession planning and possible ways of adapting and improving the process. Firms and professionals can use the information from these study findings to adopt policies and strategies for succession planning (Crew, 2010).
Succession planning is a vital component of any company's strategic plan. One fails to comprehend why many companies have been unable to put in place effective succession plans despite having knowledge of the need to have one. It is observed that most leaders acknowledge that succession planning forms a pivotal role in a company's corporate plan. However, these companies are unwilling to put in place effective successive plans.
According to available research, planning for leadership succession should be part of the way a company should be managed. This process involves grooming potential leaders (Avelino & Rotmans, 2009). This process takes time and companies need to invest time and resources. Leadership succession should not be something that is an afterthought for companies but should be entrenched in the company’s strategic plan.
The changing trends in the global market dictate that companies change the way they do business. There is a need for formalized procedures in succession planning by companies. Companies are now warming up to formalized succession plans, and therefore, research is required in equipping these companies with the right strategies to do strategic succession plans. The researcher observes the need to do thorough research in the place of technology in succession planning. It should be noted that the future of many companies lie in the way these companies use technology. Therefore, succession plans should shift their focus from just changing the administration to comprehensive needs of the enterprise. That area needs to be properly looked into to enhance smooth transitions for companies. The companies need to work towards keeping themselves up to date with the changing market trends. Succession planning in the future seems to be more concerned with how societies are prepared to do research on the current market needs.
Skills training and career development will now focus on the use of technology to automate the operations of the company. The companies will have to ensure that they are at par with the innovations and that they can quickly take up new technologies immediately they come up. Planners will have to focus more than changing the chief executive officers of companies to looking into how systems can be well modified to suit the needs of the current market dynamics. Succession planning needs to be a priority immediately a business starts its operations. Succession planners need to foresee changes that are likely to occur in the market in the near future and focus training in these areas. Successors will need to be equipped with the right skills that will enable them to remain competitive in a changing business environment.
The opening up of the global market presents new challenges and thus a point of focus for succession planners. Businesses are finding themselves face to face with stiff competitions from international companies that were before not a threat. Succession planning has, therefore, to focus on how to face this competition without winding up the business. The planning needs to focus on how to remain competitive not only locally but also globally.
Therefore, more research remains to be done in succession planning. Researchers have to look into specific areas that will make succession planning useful for business operations and create a successful business that will last for generations. These firms will also have to contend with changing market trends and face stiff competition arising from the globalization of market.