Problems and Obstacles in Business Succession to the Second Generation (Generation 2) in Construction Contracting Companies: A Qualitative Study

Abstract

This qualitative research aimed to: 1) study problems related to organizational culture and intergenerational conflict in construction business succession to the second generation (Generation 2), 2) analyze problems in knowledge and skill transfer from the first to the second generation, and 3) understand the unique characteristics of construction businesses affecting succession. Key informants were 20 purposively selected participants: 10 first-generation owners and 10 second-generation heirs from Thai construction contracting companies. Data were collected through semi-structured in-depth interviews and analyzed using content analysis. Results showed that: 1) regarding organizational culture and conflict, all informants (100%) reported differing management philosophies, 90% reported overlapping authority during transition, and 85% reported resistance from long-serving employees; 2) regarding knowledge transfer, all informants (100%) reported difficulty transferring tacit knowledge, 90% reported business network transfer difficulties, and 80% reported the lack of a knowledge management system; 3) regarding understanding of construction business characteristics, all informants (100%) reported unique organizational cultures, 95% reported cash flow uncertainty, and 90% reported subcontractor system complexity. The findings suggest that advance succession planning, knowledge management system development, and building organizational acceptance before formal leadership transition are key strategies that family construction businesses can apply to reduce succession risk.