Influence of Successors’ Entrepreneurial Competencies on Performance in Family-Owned Small and Medium Enterprises in Arusha City, Tanzania

Abstract

This paper examines attributes of successors’ entrepreneurial competencies such as risk-taking propensity, ability to exploit business opportunities,  innovation and commitment in family businesses in Arusha City, Tanzania. A cross-sectional research design was employed using a quantitative  survey approach, in which two hundred family business successors provided data for this paper. The data were analysed using the Hierarchical  Regression Model to assess the influence of successors’ entrepreneurial competencies on the performance of family-owned SMEs. The findings  indicate that successors’ risktaking propensity and the ability to exploit business opportunities influence the performance of family-owned SMEs.  The paper concludes that familyowned SMEs managed by successors who can take calculated risks and are also able to exploit business  opportunities are in a good position to realize better performance in terms of net profit. It is recommended that family business  founders should  build their successors’ entrepreneurial competencies.