PERFORMANCE ACHIEVEMENTS OF FAMILY BUSINESS THROUGH SUCCESSOR READINESS AND THE RELATIONSHIP BETWEEN FAMILY AND BUSINESS MEMBERS

Family businesses are one of the biggest contributors to Indonesia’s gross domestic product (GDP). Universitas Ciputra facilitate their students with family business guild. Succession plan and communication are important aspects for family businesses. Family businesses must educate potential successors in order to implement the succession plan well. The purpose of this study was to examine the effect of preparation level of successors towards family business performance; examine the effect of relationships among family and business members towards family business performance. A quantitative approach was used with a population of Universitas Ciputra’s Family Business Community. Purposive random sampling technique was used, yeilding a total sample of 93 people. The data analysis method used is Partial Least Square (PLS). The results showed that preparation level of heirs variable has a positive and significant effect on family business performance; the relationship among family and business members variable has a positive and significant effect on family business performance.


INTRODUCTION
Businesses in Indonesia, whether they are small-medium enterprises (SMEs) or corporations, they make a significant contribution to the development of the country's economy. Family Universitas Ciputra is well-known for its vision to "Become a university that creates world-class entrepreneurs who are characterized by Integrity -Professionalism -Entrepreneurship (IPE), have sense of nationalism, and able to have a positive contribution to Indonesian". In line with its vision, Universitas Ciputra encourages every business formed by its students to be sustainable and timeless. Universitas Ciputra offers a learning program for future family business successors in the the Family Business Guild, as one of the Entrepreneurship Course Guilds. Learning about family business is taught to students who are members of their own family business. Students who have joined the Family Business Guild will immediately join the Universitas Ciputra's Family Business Community, which until now it has 8 batches and a total of more than 340 members. The majority of Universitas Ciputra students who are members of this guild are the second generation in their respective family businesses in different industries, company backgrounds, as well as regions of origin.
Previous literatures have discussed the definitions and characteristics of family business, and various definitions have been put forward by previous researchers. According to Diéguez-Soto, López-Delgado, and Rojo-Ramírez (2014), the definition of family business cannot be defined precisely, because the definition of family business can be distinguished from several criteria such as ownership, control, board of directors, management, recognition of the company itself, succession across generations, multiple generations, and family as well as business values. One of the things that distinguishes a family business from a non-family business is a familial relationship and perspective on the next generation (Aronoff and Ward, 1995). Walsh (2011) stated that about 70% of family businesses cannot last into the second generation, and 90% will not last until the third generation. In a several recent studies, the survival challenge of passing down the family business to the next generation still remains (Bozer, Levin, and Santora, 2017;Kumar and Prameswari, 2018;Samei and Feyzbakhsh, 2015). Motwani, Levenburg, Schwarz, and Blankson (2006) stated that the succession plan, communication, and training are important in the family business, regardless of the size of the family business. Several studies points out that family members as successor can lead to decline in performance (Liu, Eubanks, and Chater, 2015), due to the perseverance of socioemotional welfare of familial relationship over business performance (Dodd and Dyck, 2015;Miller, Breton-Miller, and Lester, 2013).
Family businesses are faced with the challenge of finding and managing the next competent leaders (Miller, Le Breton-Miller, Minichilli, Corbetta, and Pittino, 2014). According to survey report by PwC (2019), within the next two years, the key challenge that will be faced by Indonesian family business is to have the right skills and capabilities in order to Gracia Ongkowijoyo Timotius F.C.W. Sutrisno Teofilus 200 innovate and keep being ahead of the competition. Furthermore, the "next gen(generations) working in the business are largely expected to gain internal and external experience, but only a third are expected to be just as suitable for the role as non-family members (vs. 65% globally)" (PwC, 2019). In addition, a recent study found that the high level of family involvement in a family business management and governance result in a better performance (Chirico and Bau', 2014;Cassia, 2013a, 2013b;González-Cruz and Cruz-Ros, 2016;Mazzola, Sciascia, and Kellermanns, 2013), which puts more pressure towards the next generation to face this challenge successfully.
To address this challenge, family business must ensure that the successors must be ready and must have the right skills and capabilities to continue its family legacy through succession planning. The succession process that is not going well does not only have a serious impact on family and business relations, but also has a serious impact on the country's economic development. Whereas, within the family company there will also be internal conflicts that can interfere with the continuity of the succession process (Buang, Ganefri, and Sidek, 2013) in (Mokhber et al., 2017).
Based on the information and previous literatures, family business is important to the economic growth of Indonesia, which family business model may not survive for the next generation if the right skills and capabilities are not met. Thus, this calls for a deeper research on the factors that contribute to improve family business performance in order to survive for the next generations. Furthermore, a recent qualitative study by Putra and Melinda (2019) found that successor readiness contributes to helping the successor's ability to develop the family business and family relationship contributes to resolving conflicts as well as building trust towards the successor. Thus, this calls for confirming and generalizing the findings as well as extending to examine the relationship between family members and business members on the family business performance. Therefore, this study aims to determine the effect of the level of successor readiness and relationships between family and business members on the family business performance. Overall, the results of the study will contribute to expanding the knowledge on family business as well as useful to be implemented in family business. addition to the definitions written above, the definition of a family business can also be distinguished from several criteria such as ownership, control, board of directors, management, recognition of the company itself, succession across generations, multiple generations, and family and business values (Diéguez-Soto et al., 2014).

Succession Planning
The process of internal succession in a family business becomes a very important and complex problem (Kamei & Dana, 2012). According to Bozer et al. (2017), there are four protagonists in a family business that are seen to have a direct influence on the succession process, namely the predecessor, the next generation, the family, and non-family members.
The predecessor generation (incumbent) consists of the founders and family members who hold senior management positions in the business and have relinquished or wish to give up their position to new family members. The next generation (successor) consists of family members who have taken or will take over leadership positions from the incumbent. The family includes family members involved in the family business must carry the nature, culture and values uphold by the family, especially when determining the daily management activities and strategic objectives of the business. Non-family members indlcude employees working in the family business. Successful succession is critical to meeting the goals of family business performance (Daspit, Holt, Chrisman, and Long, 2015).

Family Business Performance
Business performance is certainly one of the main measures in management and business.
The performance of the family business still has a definition that cannot be agreed upon by researchers (Venkatraman and Ramanujam, 1986). Generally, companies with smaller size tend to have better and closer relationships among the employee in which a study by Chu (2011) stated that a smaller-scale family business has better business performance due to a closer family-member relationships, which facilitates communication between family members. However, in this study, we do not use control variable for the size of the company, instead the focus of this research is on the two variables' contribution towards increasing family business performance. The broad definition of business performance can be seen through financial and non-financial performance (Mokhber et al., 2017). The indicators of business performance include return on investment (ROI), sales growth, market share, product/service quality, dan operational efficiency (Kim and Gao, 2013).

Relationship between Successor Readiness Level and Family Business Performance
The perspective of dynamic managerial capabilities (Adner and Helfat, 2003) posits that the heterogeneity of managerial decisions is driven by each individual's capabilities to respond to changes and the dynamic environment. Bringing this perspective within the context of a Gracia Ongkowijoyo Timotius F.C.W. Sutrisno Teofilus 202 family business, successors have fewer capabilities and experiences compared to the predecessor, which the older the owner, the more work experience one has and this certainly contributes to the successful performance of the family business. In order to pass on the family business to the next generation, the predecessor must transfer knowledge to the successor, which can be through knowledge sharing (Woodfield, Shepherd, and Woods, 2017). The predecessor must help the successor to face the challenge of educational and operational challenges, while the successor must learn to take advantage of the family values and special competencies in order to develop their own dynamic managerial capabilities (Barach and Ganitsky, 1995). Mokhber et al. (2017) found that family businesses need to allocate a family budget to ensure successors are truly prepared for the succession process. In addition to succession process, the experience of successors in an outside company prior to entering the family business becomes an important asset for the successor (Barach and Ganitsky, 1995). Thus, succession process and successor's outside experiences help to build successor readiness, which the successor readiness will help to increase the family business performance as the successor have been equipped with knowledge and enriched through various experiences.
Based on the literature review above, the first hypothesis of this study is that the level of successor readiness has a positive and significant effect on the performance of the family company.

Relationship between Family and Business Members
Building on the perspective of dynamic managerial capabilities by Adner and Helfat (2003) implemented in the context of family business succession, successor must be able to develop his or her own dynamic managerial capabilities to ensure the sustainability of the family business once it is passed down. In the transfer knowledge phase, predecessor must encourage, trust, and empower the successor. However, this kind of support should not only come from the predecessor, but also from other family members as well as other business members. In order to do so, relationships between family and business members in a good family company are very important, which also ensures the sustainability of the family business (Backhaniwala, Wright, and Ram, 2001). Trust among each family member as well as having a good communication can foster better relationship among family and business members, thus help the family business to be successful (Mokhber et al., 2017). In addition, good communication between family and business members (Bozer et al., 2017) and opportunities to learn provided (Le Breton- Miller and Miller, 2015) can increase the effectiveness of succession in the family business, thus in turn will increase the family business performance (Pyromalis and Vozikis, 2009). Ghee, Ibrahim, and Abdul-Halim (2015) also Jurnal Manajemen Teori dan Terapan Volume 13. No. 2, Agustus 2020 stated that a high level of trust as well as close relations among family members can help to improve the succession process and the performance of the family business. Based on the literature review above, the second hypothesis of this study is the relationship between family and business members has a positive and significant effect on the performance of family companies: H2: Relationships between family and business members have a positive effect on the performance of family business.

RESEARCH METHODS
This research is conducted using quantitative method.

Population and Sampling
The population in this study is all members of the Family Business Community of Universitas

Variable and Operational Definition
The variable used in this study is the successor readiness level (X1), relationships between family and business members (X2), and family business performance (Y). Morris, Williams, and Nel (1996) states that the level of successor readiness can be seen from the preparation level of the successor, which is one of the determinants of successful generation transitions.
Successful generation transition to handle the family business should contribute to better family business performance. The indicators can be seen in Table 1, which are measured using ordinal and interval scales.
Relationships among family members in family businesses are also one of the determinants of successful transition, which includes communication, trust, commitment, loyalty, family disorder, rivalry among siblings, jealousy, conflict, and shared values and traditions within the family (Mokhber et al., 2017). The indicators are shown in Table 2, which are measured using five-point Likert scale (1 = strongly disagree, 2 = disagree, 3 = neutral, 4 = agree, and 5= strongly agree). The broad definition of business performance can be represented in two categories: financial and non-financial performance (Mokhber et al., 2017). The indicators are shown in Table 3, which are measured using five-point scale (1= very low, 2 = low, 3 = moderate, 4 = high, and 5 = very high). Table 3.

Return on investment (ROI)
The business' ratio of income to investment Sales growth Sales growth of the business Market share The market share of the business Product/service quality The quality of the product or service offered Operational efficiency Efficiency of operational activities carried out by the business

Data Analysis and Hypothesis Testing Methods
The   Cronbach's alpha value and composite reliability also met the requirements.  The smaller the standard deviation, the better. However, the variables' standard deviation results show that the range is from 0.619 to 0.951, which are relatively high. Thus, this means that the data is not optimal. This is due to the data collected is using Google form, which might cause difficulties in the controlling process. Although the standard deviation results are relatively high, the data has fulfill the reliability and validity tests, and therefore eligible to be used.

Reporting Research Results
Hypothesis test results indicate that the Successor Readiness Level has a positive and significant effect on Family Business Performance. This finding shows that the higher the level of successor readiness in a family business, the higher the performance of the family business.
This result is in line with a study by Mokhber et al. (2017), which found that the Successor Readiness Level is one of the determinants to successful transitions, which has a positive influence on the Performance of the Family Business.
The Successor Readiness Level can affect the Performance of Family Business due to the contribution made by the successors to their respective family businesses. The higher the successor's education level and the more work experience outside the family business, the readier the successor to handle the family business (Nuthall and Old, 2016). Both higher education level and outside work experience have exposed the successor to more knowledge as well as helped the successor to obtain both hard skills and soft skills.
Ramadani, Hisrich, Anggadwita, and Alamanda (2017) mentioned that various methods were carried out by founders in order to facilitate successors, one of which was to provide access to education, to equip successors with knowledge and experience prior to directly managing the family business. Whereas, outside work experience would enrich the successor with knowledge and experience that can be brought back and implemented in the family business. Moreover, the motivation to join the family business and the successor's perception of one's readiness contribute to mentally prepare oneself. Therefore, education level and outside work experience act as external preparation, whereas motivation and selfperception act as internal preparation for better successor readiness level, and thus contribute to better family business performance.

Gracia Ongkowijoyo Timotius F.C.W. Sutrisno Teofilus
Relationships between Family and Business Members have a positive and significant effect on the performance of the family business. Thus, in the context of a family business, the better the relationship in the family, the better the family business performance. The results of this study have similarities with the findings of a study by Mokhber et al. (2017) and support the findings of a study by Kumar and Prameswari (2018).
Problems that arise in an organization can be solved by good communication through sharing information or knowledge, which is one of the aspect that contribute to good relationship among family members and business members (Frank, Kessler, Rusch, Suess-Reyes, and Weismeier-Sammer, 2017;Suess-Reyes, 2016). With a good relationship between family and business members, problems that arise in the family business can be minimized. A good relationship will also strengthen the level of trust. Predecessor's willingness to approve and delegate power to successor are crucial to succession process (Dou and Li, 2012;Wang, Lo, and Weng, 2019). These in turn enable the successor to gain better cooperation with the predecessor and other business members in the family business. As a result, all these aspects can increase the family business performance. In addition, predecessor that provide values and traditions and business members that also contribute to knowledge transfer to prospective successors can help the successor to better understand the family business as well as strengthen their existing familial relationships. This confirms a study by (Boyd, Royer, Pei, and Zhang, 2015) and answers one of research propositions by Suess (2014).
Furthermore, the fewer conflicts or jealously and competition or rivalry among family members help to build harmony and a trusting relationship among the family members. A good relationship in the family must be maintained by the family business in order to improve the performance of the family business. This finding is in line with a study by Woodfield et al. (2017), which good interactions between generations can help sustain family business. In addition to the incumbent's relationship with the successor, relationships with other family members are also important in a family business. Maciel, Ramos, Aguilar, and Reyna (2015) stated that family relationship is vital for the success of a family business.
The findings of this research emphasize that every family business must pay attention to the level of readiness of each potential successor and the existing relationships in the family in order to maintain the family business performance. This can be done by increasing the awareness of the previous generation (incumbent) of the prospective generation (successor), so that the next generation is ready for the succession process that will be carried out and to be able to maintain the family business performance. Successors must be prepared in earnest to channel their potential and to contribute to the family business effectively. In addition, the family must also pay attention to communication among family  (Maciel et al., 2015). Family company performance is inseparable from good relationships within the family as well as business members (Chung and Luo, 2013). Problems that exist in the company or family will be resolved if family members have good relationship and relationship roots. Family members must be able to trust each other, have a shared commitment to develop the family business.

CONCLUSION
The purpose of this study is to determine the effect of the level of successor readiness and relationships between family and business members on the family business performance. A quantitative method was used and purposive random sampling was used, yielding 93 respondents from Universitas Ciputra's Family Business Community. The data was analyzed using PLS-SEM. Based on the dynamic managerial capabilities (Adner & Helfat, 2003) and research results, successor readiness level has a positive and significant effect on the family business performance. The result also shows that the relationship between family and business members have a positive and significant effect on the family business performance.
Family businesses must be able to prepare potential successors for the business so that business sustainability is well-maintained. Aside from this, another challenge that exists in a family business is family relationships that intersect with business matters. Family members must be able to maintain a good relationship in order to achieve a stable family business performance.

Gracia Ongkowijoyo Timotius F.C.W. Sutrisno Teofilus
Several managerial recommendations resulted from this research. First, family businesses should consider more preparation for a more mature successor. Second, the family business must also maintain a close relationship between family and their respective business members, so that the business performance continues to improve and be optimal.
Despite a rigid quantitative research method used, there are some limitations of this research. First, the sample used in this study did not cover the majority of the population, hence family business successors within the Universitas Ciputra Family Business Community.
Thus, there is an opportunity to confirm and generalize this research findings to other family business community in Indonesia. There is also an opportunity to confirm the findings in family business in other countries, whether is there any cultural factors that might contribute to family business performance. Second, this research did not include company size as control variable. Thus, future research should explore company size as control variable and other control variables that can contribute to broaden the family business body of knowledge.
Finally, the contribution of successors varies within each family business, thus the calculation of the influence of the successor readiness level towards family business performance needs to be further developed. Therefore, there is an opportunity for future research to examine the role of different levels of successor readiness towards the family business performance.