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Succession Planning - Coggle Diagram
Succession Planning
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Why important in business setting
- best way to move forward without any interruption
- smooth transfer of business to successor
retirement of key personnel
- upon retirement vacancy should be filled up
- person may force to retire early due to medical reason, biz interest or personal reason
- key person to take over the position
death of key personnel
- biz will suffer due to loss of key personnel
- to ensure family members do not suffer in the event of key personnel
- biz can be sold or absorb by other organization
promoting the right individual in organization
- putting right person at right position
- must have right competencies
- must have support and minimum interruption
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Definition
- process of creating continuation of a business operation for the future taking in to account on the occurrence of certain events.
Effect of death to companies
1. Sole proprietors - terminate business, sell to 3rd party or heirs inherited biz
2. Partnership - force liquidation, sale to 3rd party or surviving partner, heirs inherit biz or heirs buy out surviving partners share
3. Company
Non family biz
- Shares Held on Trust for benefit of all inheritors
- Shares will be part of the Estate pending distribution to heirs
- Administrator of the Estate Sell Shares to other Shareholders or Outsiders
Family biz
- Wound up / heirs continues biz or heirs sell shares