PRIMARY TYPES OF SUCCESSION

Phuoc D. Nguyen

Gothard and Austin (2013) list primary types of succession, including “Relay succession involves identifying a member of senior management in an organization as heir apparent well in advance of the actual transition, providing a period of overlap for the outgoing executive to transfer knowledge and power to the successor (as cited in Vancil, 1987); non-relay inside succession occurs when the successor is promoted from inside the organization, but through a competitive process involving several key internal candidates (as cited in Friedman & Olk, 1995); and an outside succession is one in which the successor is hired from outside the organization (as cited in Zhang & Rajagopalan, 2006).” (pp. 274-275). Without any SP&M model that mentioned the outside succession. The relay succession approach has just been reserved for senior management positions succession planning. The non-relay inside and outside succession approaches can apply the SP&M to all leadership, executive, and management positions. The selection of the type of succession is based on the strategic goals and corporate strategy. The outside succession approach has advantages such as outside successors who will bring their diverse cultures, personal values, special skills, and good experience into the company. However, this approach may create ‘inertia’ for highly inside potential individuals and management systems to their motive, motivation, performance, and productivity; inside successors may feel they are not highly rated and get selfish about their experience and qualities. This approach may cause the departure of potential people. Furthermore, outside successors who are not familiar with geographical areas, management systems, corporate culture, core values, beliefs, stakeholders, etc. “The greater the operational complexity of the firm, the greater will be the expected succession costs associated with an outside successor, and the more likely the firm will be to have a relay succession plan.” (Naveen, 2006, p. 665) The recruitment of outside successors demonstrates that the company’s HR management system including the performance management subsystem, SP&M program, and relevant HR programs is underdeveloped. In contrast, inside successors are confused about the company’s systems, functions, problems, and issues. For example, in the case of nine heads of departments who are peers together, when one head of a department is promoted to the CEO, the other eight heads of the department feel a lack of respect for the new CEO.