@article{b1f0ff98bdbd4815b7e5cb99a8e5bafa,
title = "Analysis of Executive Succession Planning in 12 Construction Companies",
abstract = "The most vital resource in a construction company is the executive leadership. Therefore, executive succession can significantly affect a company, with the potential to cause both visible and invisible negative impacts. Changes in leadership can cause turmoil, both financially and operationally; unless minimized through careful succession planning. Research on succession planning shows that beginning to prepare for leadership transition before it occurs can minimize potential negative impacts. Despite the importance of succession planning, little research is available on how to improve leadership transitions in the construction industry. Thisarticler presents the findings from interviewing 12 former and current executives at construction companies that experienced leadership transitions. The findings include insight regarding the methods the companies used to plan and implement executive succession. This article also discusses the correlation between the number of succession practices a company applies and the executive{\textquoteright}s level of satisfaction with the leadership transition. The results of Spearman{\textquoteright}s rank-order correlation and linear regression analysis indicate a strong positive correlation exists between the number of practices implemented and the satisfaction level.",
keywords = "Executive, leadership, succession planning, successor",
author = "Perrenoud, {Anthony J.} and Kenneth Sullivan",
note = "Funding Information: This study was conducted in partnership with the National Electrical Contractors Association (NECA), the largest electrical contractors association in the United States. NECA{\textquoteright}s research organization, ELECTRI International, assisted with identifying contractors that experienced leadership transitions and that were willing to participate in the study. An invitation to participate in the study was emailed to 277 NECA members; 12 contractors located in the United States volunteered to participate in the research. The primary objective of this study was to identify relationships between (a) the ten practices identified in the literature and (b) successors{\textquoteright} level of satisfaction with leadership transitions. The assumption was that the more practices employed, the higher the level of satisfaction would be. A secondary objective of this study was to identify characteristics of and trends related to the practices used in construction companies during leadership transitions. Because the main purpose of the study was to analyze construction companies that had experienced leadership transitions, a semistructured interview similar to Barriball and While{\textquoteright}s (1994) was effective in gathering data on succession processes and on current and former executives{\textquoteright} satisfaction with leadership transitions. The semistructured interview process consisted mainly of open-ended questions that were developed beforehand. Open-ended questions were selected so the interviewees had the opportunity to share the details of significant succession experiences (Merton, Fiske, & Kendall, 1990). The questions were designed to guide the interviewees through the entire leadership transition so that they discussed all succession methods used. The interviews were conducted in person or via phone; the interviews were audio recorded to ensure the data were captured accurately. Following the interviews, the audio recordings were transcribed and presented to the interviewees for verification. Table 1 contains descriptive information on the 12 participants{\textquoteright} companies, including the number of employees, the estimated revenue in 2010, and the ownership type. The number of employees in the 12 companies ranged from 50 to 1,700, and the estimated revenue ranged from 5 million to 4.5 billion $US. Seventy-five percent of the companies were family-owned, closely reflecting the largely family-owned construction industry (Schrader, 2006). A few of the companies were partner owned, publicly owned, or employee owned.Table 1. Profiles of 12 companies.CompanyInterviewee TitleEstimated Number of EmployeesEstimated Revenue in 2010 (in USD millions)Ownership TypeCompany APresident30050FamilyCompany BCEO9013FamilyCompany CPresident505FamilyCompany DPresident25050FamilyCompany EFounder500110PartnershipCompany FPresident35080FamilyCompany GPresident30070FamilyCompany HFounder1,7004,500Publicly ownedCompany IPresident20050FamilyCompany JPresident50080Employee ownedCompany KPresident13055FamilyCompany LPresident20040Family Profiles of 12 companies. Publisher Copyright: {\textcopyright} 2017 Associated Schools of Construction.",
year = "2017",
month = jan,
day = "2",
doi = "10.1080/15578771.2016.1143892",
language = "English (US)",
volume = "13",
pages = "64--80",
journal = "International Journal of Construction Education and Research",
issn = "1557-8771",
publisher = "Brigham Young University",
number = "1",
}