This paper derived a series of hypotheses from a review of previous research on business succession in organizations to investigate the factors that determine the success or failure of business succession in Japanese nonprofit organizations (NPOs). These hypotheses were tested using survey data. The analysis confirms the validity of the hypothetical framework for determining the success or failure of business succession in NPOs based on five key categories: (1) founder's syndrome, (2) upper echelon, or leader and Top Management Team (TMT) characteristics, (3) business succession planning, (4) governance, and (5) organizational characteristics. The validity of the hypothetical propositions was examined within each category, and the implications of the hypotheses were derived.
The results of the analysis revealed the following. Firstly, the residual founder's influence negatively impacted the results of the succession. Secondly, the experience of governmental administrative management in the successor's career had a negative impact on the results of the succession. In addition, the diversity of the succession team members positively influenced the succession results. Thirdly, the functioning of the board of directors had a positive effect on the organization's results after the succession. Finally, the larger and the more specialized the organization, the greater was the positive effect on the succession results.