Understanding a Father-Daughter Succession Case : Applying the 5 + 5 + 5 Bernelli Model

Problem statement: Research on father-daughter succession in family businesses has only recently begun to get some traction. Still, examples of these situations often elude researchers. Futhermore, there has not been adequate attention paid to how children are raised in family businesses and how they learn to be entrepreneurial. Approach: This study outlines a father-daughter succession case in this unique American setting-the Appalachian Mountains of West Virginia. West Virginia offers an opportunity to examine family businesses embedded in the Appalachian culture-one where much of the popular and scholarly literature contend that deficiencies have contributed to, or reinforced, economic poverty and backwardness. These ideals are now being challenged and this case offers evidence of reversal. We also use the Bernelli 5+5+5 Model as a lens through which to examine the daughter’s entrepreneurial growth in this case. Results: The Bernelli 5+5+5 Model allowed us to structure the daughter’s experiences and better understand how she got to be such a successful successor. Conclusion/Recommendations: We recommend that the Bernelli 5+5+5 Model be used as a framework to view succession in family businesses. The Model also serves as a lens through which to view and better understand how children raised in family businesses become more successful entrepreneurs as adults.


INTRODUCTION
The family business setting dates back centuries but only relatively recently has it been studied by researchers as an important component of current world economy (Lank andThomassen, 1991, Ward, 2011). Family businesses have been described by Davis and Stern (1980) as exceptional entities due to their concern for the long run over generations, a commitment to quality which stands behind the family name and their humanity in the workplace where there is more care and concern for employees. While family businesses around the world have been studied, there has been scant research on rural family businesses. In particular, few studies have been done specifically in father-daughter successions in family businesses in mountainous areas such as the Appalachia region located in West Virginia in the United States.
Literature that has touched on issues of how to improve income, living conditions and human welfare in the southern mountain region of the United States, has assumed that a significant relationship exists between the culture of those who live in Appalachia and the prospects for the region's economic development. Indeed, assumptions about the distinctiveness of Appalachian culture influence the very presumption that the area is in fact a discrete region with a distinctive culture even though most Americans would scoff at the notion of a Rocky Mountain or Adirondac culture (Lewis and Billings, 1997).
A set of powerful beliefs exists in the American cognitive map about Appalachian culture and its presumed impoverished economic development. These assumptions include such concepts as isolationism, homogeneity, familialism and fundamentalism. These and a variety of corollary concepts grew out of a popular mythology which came to be accepted and then researched by professionals whose works were influential during the 1960s and 1970s and still influence economic theory and policy analysis today in the region. The validity of these beliefs, many of which became stereotypes, were challenged in Appalachia with the rise of social activism in the 1970's. Scholarly work from 1970-1995 significantly deepened the understanding of the diversity presented by Appalachia's geography, history, cultural resources, forms of social and political participation and its relationship with the national and global markets (Lewis and Billings, 1997).
Thirty years ago, researchers assumed that because of geographical isolation, rural Appalachia had functioned in the past as a subculture that was essentially autonomous from mainstream society. Accordingly, its culture was judged to be different from "mainstream" America. Rural Appalachia was regulated by traditional values such as traditionalism, individualism, familialism and fundamentalism. Such values once served the region well, the argument went, especially in isolated localities where frontier conditions prevailed, but they were no longer appropriate for the modern society being diffused throughout the region by urbanization and industrialization (Billings and Lewis, 1997).
The demands of rapid change were causing serious problems of adaptation among traditional Appalachians. Traditional values were in conflict with economic development, which required social and economic mobility rather than traditionalism, an achievement orientation, interdependency rather than individualism and large-scale rational organization rather than personalism. Despite being out of step with American progress, however, Appalachia's traditional values were believed to be insulated from change by geographic isolation and a psychological isolationism which included a retreat into the protective space of a "culture of poverty" (Lewis and Billings, 1997). Keefe (2009) at the Department of Anthropology at Appalachian State University has compiled case studies collected by seasoned professionals to examine the culture of rural Appalachia and show how the region has worked against old stereotypes of poverty through social change, leadership and better decision making. The scholars highlight the need for examination of cultural identity, community and sustainability initiatives to promote citizen participation in the economic and social growth of Appalachia. These community-based case studies document recent community rebuilding projects that have focused on economic development, cultural styles of political action and "better connecting" schools (Keefe, 2009).
In a recent research at the University of West Virginia, Maribel et al. (2009), determined the relationship between entrepreneurship and economic growth in the counties of West Virginia. This relationship was found by including entrepreneurship variables constructed from proprietorship and firm birth data into endogenous growth models. The model utilized measures of economic growth as endogenous variables including population growth, employment growth and per capita income growth estimated individually. In addition to entrepreneurship, the model included other factors that are traditionally linked to economic growth (Maribel et al., 2009).
The results of their analyses showed evidence regarding the positive contribution of entrepreneurial activity to economic growth. Counties with higher numbers of proprietors and business start ups exhibited higher levels of population growth. Growth in proprietorship and the increase in the number of employees in businesses showed positive influences with employment growth. The general results suggest that higher levels of entrepreneurship are related with higher levels of economic growth in two measures of economic growth used in the study. The study indicates the importance of understanding the role of entrepreneurship in analyzing the determinants of economic growth particularly in areas that are continuously seeking new strategies towards economic development like West Virginia (Maribel et al., 2009).
This study outlines a father-daughter succession case in this unique American setting-the Appalachian Mountains of West Virginia. West Virginia offers an opportunity to examine family businesses embedded in the Appalachian culture-one where much of the popular and scholarly literature contend that deficiencies have contributed to, or reinforced, economic poverty and backwardness (Lewis and Billings, 1997). These ideals are now being challenged and this case offers evidence of reversal.
The personal relationship between a father and daughter is very difficult to manage in a work setting. Boundaries must be set between personal and business issues. If disagreements occur, they must be worked out in a professional way. Some other major concerns that are important to consider when transferring the reigns from father to daughter include ensuring that the daughter will continue the business at the same level that the father did, ensure that the relationships with children who choose not to enter the family business remain intact, do not alienate employees when the daughter is promoted and finally, learning when to have your way, when to let the daughter have her way and when to keep fighting for an issue.
The process of effectively handing over the reigns has often been discussed from a succession planning perspective. However, this study takes a different view. We argue that there is a distinct process that is followed when daughters, or any children, enter a family business. That process includes several actions that must be taken by both the parent(s) and daughter throughout their lifetimes. When done effectively, the daughter will be well prepared to take over the company and the reigns can be easily transferred.

RESULTS
Since so few family businesses succeed to the next generation, succession planning is critical. In this study we outline a father-daughter succession case, XYZ Rentals. We also apply the Bernelli Model, a paradigm which allows us to put some structure on the fatherdaughter succession process, to the case.
XYZ Rentals (located in Morgantown, West Virginia, USA) is a first and second generation family business. The father, Donald, started the business in 1989. His daughter, Karen, has been spending time in the company since she was just eight days old. Over the years, she has learned the ins and outs of the business and is currently working towards taking over the company. XYZ Rentals is now a full service rental store serving contractors homeowners and businesses. The company's offers lift rentals, equipment rentals, events rentals (general event items, fun foods, party suppliers, costumes, games, tents and accessories), parts and new or used equipment sales.
While the company evolved in 1989, Donald, who started the company, did not begin his career in equipment rental. In 1963, when he was in high school, Donald's father relocated to West Virginia to find work in the coal mines. During this time, Donald started working on cars to make additional money. While he was just in his 20's, he began sharing a property with a local electrician. They worked together for three years with Donald fixing automobiles and learning the electrical business. Those skill sets eventually led to him fixing equipment for business owners. He began to purchase, resell and rent equipment. Over time, he added on more equipment and purchased more property. When he outgrew his business location, he would build onto it. Eventually, he constructed several buildings including a shopping plaza, a mini warehouse and some additional property behind where they are currently located.
The company today boasts dozens of employees and several departments; Lift, Equipment and Event rentals, Parts and Service, Equipment Sales and Storage. Karen, Donald's daughter, is the VP of XYZ. She manages the operations and administrative sides of the company. Donald likes to work with his hands and controls the heavy equipment and maintenance. Donald's wife manages the party and event rental and takes care of payroll. Gary, Karen's husband, works on all the company's equipment and works in all departments. Even Karen's twins (a son and daughter, now 11 years old) work in the business during the summer.
When Karen was very young, she was often brought to her parents' or aunt's workplace. She was encouraged to use her people skills to get along with employees and customers. She was often given tasks, such as copying, stapling, or bookkeeping, that would eventually enhance customer service. Since she was able to observe the effects of her actions on a day-today basis, she quickly learned solid people-skills and had far more business exposure and hands-on experience than her peers. Being in the business was so natural for her that when she was in junior high and high school, she preferred to spend her spare time in the office, learning and making money, rather than with friends.
The succession process for XYZ Rentals still in the planning phase. Donald has recently hired professionals to work on a five year succession plan. He wants to make sure that his future vision for the business stays intact. He doesn't want his business to be sold and would like the employees to eventually have some ownership.
While Donald has two children, a son and a daughter, it is the daughter who will be taking over the business. Since Donald and his son have different philosophies about how the company should be run, Donald set his son up in a separate, sign making business. Therefore, the son has no part of XYZ Rentals. As the current Vice President and daughter of Donald, Karen knows the business inside and out. It has been known for a long time that Karen will take over the business. Therefore, accommodations have been made for that transfer to occur. About ten years ago, Karen set up a separate company called GH Enterprises. It is that company that continues to buy equipment to be rented. As equipment owned by XYZ breaks or becomes outdated, GH replaces it. Over time, most or all of the equipment will eventually be owned by GH Enterprises and Karen and her husband will have full ownership of the company.
When XYZ Rentals first began, Karen's mother would do the financial and administrative activities. Even as early as just a couple weeks old, Karen was already being exposed to what went on in the company. Instead of paying a babysitter, Karen's mother would bring her into the office and work with Karen by her side. As Karen got older, she was given age-appropriate business tasks to accomplish. While growing up, Karen also spent time with her aunt, who owned a copy store. Karen was constantly being exposed to women in business, to business activities and to adult business conversation. During junior high and high school, instead of going to play with her friends, Karen would spend time in the business making money. As she got older, she was given more significant tasks to perform so she could learn the inner-workings of the company.
Karen's working relationship with her father has always been positive. When an older brother is absent from the business, the daughter has a greater succession opportunity (Iannarelli, 1992). Karen and Donald clearly recognize each other's strengths and weaknesses and are able to work things out when each is in need. There are some employees who Donald will get along with better and some who will get along better with Karen. These personality differences allow each of them to see more sides of their employees. While Donald's relationship with a particular employee may expose him to very positive aspects of their personality, Karen may be able to see other parts of the person's work ethic. Donald's and Karen's views, together, give them a more balanced picture of what is actually going on in the company.
Donald and Karen continue to work together to better the company. They have both been going to conferences and retreats that will help and prepare them for the next generation to continue the company. This doesn't mean just Karen, but also her children. Donald continues to make the company better by searching for the missing components; reviewing the competition, learning about the needs of their current clients and in some cases, adding on new equipment and services. Most importantly, they continue to study how and in which direction to grow the business.
Socialization in a family business is a lifelong process which encompasses a number of issues such as early experiences at home and with the business; the development of career interests; perceived opportunities; given/taken responsibilities; learning styles; life stages; and relationships with the extended family members. Included in these early work experiences are socialization with business people, career choices, mentoring and leadership and management styles. Family businesses provide the ideal environment for an inside look at the effects of lifelong socialization where the work realm and family realm are intertwined.
Involvement in the family business can start with very early childhood experiences. They may include playing in the warehouse, at a desk or with merchandise at a retail store. This early socialization is the first of ten stages of developing a career as defined by Schein (1993). This socialization is one of growth, fantasy and exploration, thus proving the child with real learning opportunities. During this time, there may be emotional and symbolic bonds formed and the child may begin to feel a commitment to the business and identify a connection to it. These exposures lead to early teen experiences that were reported to be more common for sons than for daughters (Rosenblatt et al., 1985). Equal opportunities in the family business appear to be not so for sons and daughters. Clark (1895) hypothesizes that parent-child interactions also play a role in career choice. These interactions include: stress; closeness; the amount of early social time with each parent: the interests and energy of the parent; parental dominance at home; and identification with each parent.
On the job training is an important bridge to adolescent development. The children learn skills, develop self confidence, acquire knowledge and absorb values. With varied experiences working in the business and meaningful feedback on the jobs performed, a selfconcept develops more quickly (Schein, 1993). The world of work and education are merged during this time with basic training and socialization taking place.
The Bernelli Entrepreneurial Learning Model TM (BEL 5+5+5 Model) outlines exactly how this socialization occurs with children in family businesses. The Model argues that children living and growing within a family business environment are exposed to specific stimuli that influence their entrepreneurial choices and success as adults (Iannarelli et al., 2006). The model groups children into age ranges and then identifies various aspects of the exposure/learning/development process which occur in the transition from child to adult.
The BEL 5+5+5 Model proposes that children exposed to family business need to obtain five skill groups while they encounter five stages as they grow and develop and that there are five steps parents and role models can provide to encourage learning and give children what they need to fully acquire the process of entrepreneurial thinking. The five skill groups include self-starting, people, marketing, money and leadership skills. The five stages children encounter while growing up include business exposure, hands-on experience, broadening experiences, formal entry into a career and leadership opportunities. Finally the five steps parents and caregivers can provide include continuity, presentation of business problems and solutions, meet and greet other entrepreneurs, create networks to advisors and resources and recap each experience with the child.
It is believed that children who grow up in a family business environment are more clearly provided with the five steps to encourage learning; more actively experience the five stages of growth and development; and excel at the five skill groups acquired through the stages far more than children who do not grow up in a family business environment. As a result, it is posited that these children are more likely to have positive attitudes toward entrepreneurship, are more likely to go into a family business as adults and are more likely to become more successful entrepreneurs or leaders (Iannarelli et al., 2006).
The father-daughter succession process witnessed at XYZ Rentals shows evidence of many of the skills, steps and stages outlined in the BEL Model. She was encouraged to use her people skills to get along with employees and customers. Karen also talked about how family dinner conversation often revolved around business topics. Rather than asking what the children did at school that day, her parents often had dinner discussions about the day's problems or triumphs. The fact that Karen was able to hear about the exact issues, how they were handled and the resulting outcomes, led to some of her best business lessons. She no longer had to have the experience herself, she was able to learn vicariously how to handle different situations she was bound to run into in the future.
The dinner conversation is an excellent example of one of the five steps parents and caregivers can provide -presentation of business problems and solutions. It is clear how the 5+5+5 Bernelli Entrepreneurial Learning Model provides a blueprint of how young novice creative thinkers mature into expert adult entrepreneurs. The emerging adult entrepreneur is equipped to access mental constructs as a reference point while at the same time theorize about what might need to change in order to produce different outcomes. Alertness to these different possibilities as solutions to problems is rooted in a lifetime of exposure to possible solutions. The mind of the entrepreneur is trained to use his/her knowledge base to attend to patterns of events and create solutions to problems (Gaglio, 2004). As the novice entrepreneur travels through the stages of life creating their own personal scaffoldings of knowledge and skills, true solutions to the world's problems become a reality.
When reviewing the Bernelli 5+5+5 Model of Entrepreneurial Learning, we can see how the model clearly applies to Karen's experiences growing up with XYZ Rentals have developed her into a natural family business successor. She was often given opportunities to work with people, handle money and later, exhibit leadership skills. She had business exposure since she was just days old and age-appropriate hands-on experience as she grew older. Eventually, she formal entry into a career with XYZ and was given more formal leadership opportunities. Her mother and father consistently provided her with continuity in the business and presented her with business problems and solutions -often over the dinner table. While growing up, Karen was also exposed to other entrepreneurs, including her aunt who ran a copy store. Once Karen formally entered into the business, Donald made sure she had already created the appropriate networks of advisors and resources to as a foundation for which Karen could build her own entrepreneurial success.

DISCUSSION
Leaders have been studied for decades (Bennis, 1985;Gardner, 1990;Kouzes and Posner, 1984). However, the socialization process of children as they become leaders in a family business setting is only just becoming a target of interest in entrepreneurial research. Children of entrepreneurs learn throughout their lifetimes as participant observers of their parent entrepreneurs, with varying degrees of knowledge transferred to them. This accumulation of knowledge may be learned vicariously such as over the dinner table or at family gatherings, or though actual experiences at the business. When children choose to work in the family business, to work for someone else, or to operate their own business, they draw from this well of accumulated knowledge to guide their choices and leadership styles. It is believed that children who grow up in a family business environment are more clearly provided with steps to encourage learning When daughters take over a business a different set of challenges are faced. The daughter may be entering a male-dominated industry that is difficult for a woman to penetrate. She may be confronted with gender discrimination or stereotyping, suggesting that she take on more female-oriented tasks. In one company, a father who owns a construction company into which a daughter had expressed an interest in entering, was heard saying "I'm scared to bring her into the company. I know she's qualified, but I just can't see my Dotty leading and giving orders. She's a good girl and I know that no one in this business will listen to her" (Astrachan and Whiteside, 1990).
XYZ Rentals provides an interesting a fatherdaughter succession example. While Karen and Donald don't agree on everything, they work very well together. For instance, while Donald would like to see some kind of stock sharing for employees in the future, Karen is not so convinced that is the right thing to do. However, for issues like stock sharing, that do not immediately impact the company, she is willing to defer to her father. She knows that when she takes over, the major decisions will be hers to make.
Quite often, women face certain challenges when growing up in a family business, including gender discrimination and stereotyping. Research on women in family businesses often describe struggles women have with their fathers, with their brothers, with their mates and particularly with themselves. These struggles center on their roles and identity within the family business. Females face a major obstacle right from the start in family business because fathers typically consider sons and not daughters to be the successors and the process of preparing daughters has been largely ignored (Dumas, 1990;Rosenblatt et al., 1985). Salganicoff (1990) reports that of nearly one hundred women who attended family business workshops at The Wharton School of Business over a three year period, only twenty-seven percent planned to enter the family business and only twenty-two percent studied business in college.
Karen's situation is clearly different from those just described. She has been socialized into the business since she was a baby. While her brother may have received similar treatment, the differences in opinion he has had with Donald have prevented him from entering the family business. In some families, the daughter may not even be considered a successor, especially in a male-dominated business. It is refreshing to see that, in XYZ Rentals, Karen was never treated any different because she is a woman. She was socialized into the business just as anyone else would have been. She was taught all the aspects of the company and allowed to choose her expertise as her abilities evolved.
Ther Bernelli 5+5+5 Model provides an interesting way to structure and examine the XYZ case. The experiences provided by Karen clearly fit the Model's premises and support the skills, stages and steps provided. The Model offers a way to view the XYZ case and understand how Karen got to where she is-a successful successor to a family business. Even more unique, in this case, is the location of the business-an Appalachian community. The case gives us a unique view of the direction this are may be taking in the future. Further, the case shows evidence that other family businesses can benefit by following the Bernelli 5+5+5 Model.
On the issue of growing family businesses being passed onto from one generation to the next, there is a need for policies that will support entrepreneurial activity to retain people, to attract individuals to reside in Appalachia communities and to increase job creation. This suggests the need for programs that will help entrepreneurs increase their income which may include training of entrepreneurs and increasing access to capital loans. As communities search for new engines of economic development in Appalachia, encouraging firm start ups and building stronger businesses is necessary.
Research tells us that the family business is an ongoing educational experience that children are exposed to from a very young age. The Bernelli 5+5+5 Model of Entrepreneurial Learning introduces the notion that entrepreneurial scripts identified in the family business model can be mastered by children through adulthood by simulating the key stages of entrepreneurship. The Bernelli 5 steps of recap, networks, role models, problem solutions and continuity strengthen the 5 skills of self-starting, people, marketing, money and leadership at all 5 stages of entrepreneurial development and provide a perfect lens under which to examine the father-daughter succession at XYZ Rentals.
While the 5+5+5 Bernelli Entrepreneurial Model provides a detailed and appropriate lens through which to examine father-daughter succession, it should be noted that the model ignores personality traits as predictors of entrepreneurial behaviour. In fact, personality measures have failed to be convincing predictors of entrepreneurial behaviour. Although personality traits have been found to distinguish between entrepreneurs and other managers, these relationships have lacked predictive validity (Shaver and Scott, 1991). Studies investigating the role of personality traits in entrepreneurship have been inconclusive suggesting that we should focus more on variables that are more malleable -the life experiences that affect one's later cognitive maps as they relate to entrepreneurship-and especially those built through entrepreneurship education. The family business is an ongoing educational experience that children are exposed to from a very young age.
Future research on family business and issues of succession in the Appalachia region should focus on two factors, entrepreneurial education and community economic and sustainable development to promote family enterprise activities. Firstly, developmental research should longitudinally measure variables of entrepreneurship education in children of various ages. The goal of such studies is to a child's while the model presented here has evolved over years of research and appears to have extensive support in the literature, there continues to be a need for empirical support of the model. Secondly, empirical evidence shows the need for policy makers to design the necessary programs to assist young entrepreneurs by creating a business environment where barriers for startup firms are controlled and where young entrepreneurship and firm growth is encouraged. Along with youth entrepreneurship, family business research issues such as succession should also focus on examining genderbased variables.
Future research should also focus on testing the model on children of various ages to investigate their exposure to the family business and to examine how their cognitions of entrepreneurship evolve. Ideally, longitudinal studies could track the same children over time and look at their entrepreneurial choices as adults. The model can also be applied to examine other individuals (e.g., husbands, wives) exposed to the family business and how that exposure and subsequent entrepreneurial learning affects their entrepreneurial thinking and choices (Iannarelli et al., 2006). Finally, it would be interesting to examine whether sons and daughters are exposed to different aspects of the model throughout their growth.

CONCLUSION
The researchers wish to thank the contributions of the following colleagues to the development of this chapter: Profs. Miroslav Pivoda and Joe Aniello and graduate assistant, Kandi Conda.