Determinants of woodcraft family business success

The woodcraft industry has been developing in Bali for more than half a century in the form of family business (SMEs) which is currently managed by the third generation or the transition from the second to the third generation, where this phase is the climax of the family business. Apart from contributing to tourism, this craft business also has cultural values. Moreover, the tourism situation and macroeconomic shocks have had an impact on business conditions. This research aims to analyze the performance of a woodcraft family business based on a family and financial approach, through a two by two matrix analysis as well as to analyze the determining factors of willingness to succession of woodcraft family business in Bali, with MICMAC analysis. The results show that the performance of the family business in this case is high emotional but low financial capital. There are 18 identified factors related to the willingness to succeed in the woodcraft family business, and the most influential factor (existing and forecasting) is the participative leadership style, while the most dependent is personal interest which is the involvement of the successor from an early age in family business activities.


Introduction
The Province of Bali is a popular tourist destination in the world, known for its natural beauty, culture and customs of its people (Mudana et al., 2018;Wiweka & Chevalier, 2022;Wijaya et al., 2020). International tourist trips to Bali have started since the early 20th century, around 1920 to be precise (Antara & Sumarniasih, 2017). The development of Bali tourism has so far been supported by the existence of the creative industry (Darma et al., 2019), and the creative industry is also driven by tourism activities (Hidayat & Asmara, 2017). The creative industry can be said to be a commercialized cultural industry (The Canadian Policy Research Group, 2013), so it is only natural that the creative industry is growing rapidly in Bali. Indonesia Agency for Creative Economy (a.k.a. Bekraf) has included 16 sectors in the creative industry category, i.e.: (1) games application and development, (2) architecture, (3) interior design, (4) visual communication design, (5) product design, (6) fashion, (7) film-animation-video, (8) photography, (9) crafts, (10) culinary, (11) music, (12) publishing, (13) advertising, (14) performing arts, (15) art, (16) television and radio content (Setiawan, 2018). Burns and Holden (1995) argue that tourism can lead to industrialization of local culture. This has happened in Bali, where Balinese culture, especially in the form of handicrafts, has been made into a commodity or has undergone an industrialization process for consumption by tourists (Sukarini et al., 2019). Handicraft is a type of creative industry that has been developing for a long time in Bali. Bali is culturally rich with Indonesian art and culture entwined with age-old traditions (Rachel, 2016). There are various handicraft industries in Bali, such as woven crafts, gold and silver crafts, woodcarving crafts, and others. Gianyar Regency is one of the areas with villages which is famous for having many villages with their own unique arts and crafts. For example Tegallalang Village with sculpture, Ubud Village with painting and wood carving, Celuk Village is famous for its gold and silver handicrafts. There is also Mas Village which is famous for its wooden carvings and statues, and most of the people have jobs related to this industry, both household, small, medium and large industries (Sukarini et al., 2019). Even Balinese wooden handicrafts, especially Gianyar Regency, have been exported to the United States, Germany, Sweden, Australia, France, Canada, England and several other countries (Gayatri & Setiawina, 2016). Mas Village is the center of the woodcraft industry in Gianyar, even in Ubud District, Mas Village is the village with the most business units, namely around 50 business units (41% of woodcraft business units) (Widyastiti & Karmini, 2021). The woodcraft industry in Mas Village is generally a cultural industry which is a family business and has developed for more than five decades, so that currently the woodcraft business units are generally led by the second or third generation.
The existence of the woodcraft business in Bali has had its ups and downs. If you make observations along the Mas Village main road, you can see rows of workshops and woodcraft artshops. However, currently there is a shift or shift in the business line of the woodcraft industry center in Mas Village. The results of initial interviews with several business people stated that this happened because the family business was not managed seriously by the next generation. Or the successor prefers other business lines that are considered more potential.
Craft businesses in various other countries are also used to support tourism, and are generally family businesses (Tatiyanantakul & Kovathanakul, 2014). Family business in general is a business that is managed by people with family ties, and passed on to the next generation. Indeed, until now there is no concise, measurable, and agreed definition of family business, so that experts often differentiate this business based on the percentage of ownership, strategic control, involvement of multiple generations, and the intention for the business to remain in the family (Poutziouris et al., 2006).
Family relationships in business are like a double-edged sword, on the one hand they can be a strength in interpersonal relationships and facilitate communication, but they can also trigger conflict, which is almost always present in family businesses (Memili et al., 2015;Muskat & Zehrer, 2017). Apart from conflicts in management, family businesses also often experience conflicts in leadership succession (Wibowo, 2018). Most family businesses cannot survive for the third generation, where the mortality rate becomes much higher during the owner-second generation transition (Poutziouris et al., 2006).
Likewise with the woodcraft family business in Bali, especially in Mas Village, which is currently in its third generation or second generation transition, so it is in the climax stage. Succession in the family business is a crucial issue (Wibowo, 2018). Therefore it is very important and interesting to study the factors related to the willingness to succession in the woodcraft family business. The purpose of this research is to analyze the current performance of the woodcraft family business in Bali in terms of family and business dimensions. Next is to map and analyze the factors related to the willingness to succession in the woodcraft family business in Bali.

Concept of family business
The field of study of family business aims to develop a 'theory of family firms' that takes into account the interrelationships between families and business systems (Poutziouris et al., 2006). Precisely is when organizational theories and family system theories are operated together.

Organizational theories
Family firm filter (When the two systems operate as one) Theories of family firms Family system theories In addition, over time, the complexity of family and business grows over time, so performance and succession measurement is important. Some researchers (Sharma et al., 2001) associate the succession of a family firm with two things, namely the company's results after succession, and family satisfaction with the succession process as a whole (Gimeno et al., 1997). So there are always non-economic factors that must also be considered in a family business.

Research design
Research on family business is often constrained in obtaining accurate information (Poutziouris et al., 2006). Therefore, this study will use FGDs involving experts, associations of wood craftsmen, including business actors in Mas Village, to obtain valid information. The FGD was conducted to collect information about the condition of the existing woodcraft family business, identify factors that influence the succession stage, and provide value input for data analysis through sustainability analysis.

Concepts and measurement of the performance of family business
Family business has a measure of success (performance) not only in the business/financial dimension, but also in the family dimension, so that a family business may be successful in one or both of these dimensions. To answer the first research question related to family business performance, position analysis is carried out in the two by two matrix from Poutziouris et al. (2006), which presents family business performance based on the business dimension and family dimension. So that a proposition can be arranged where the performance of the family business is as follows: Family business performance = f(financial, familiness) Each quadrant in Fig. 2 can be explained as follows (Poutziouris et al., 2006): • Warm hearts-deep pockets Firms in Quadrant I are the successful family firms; they experience profitable business as well as family harmony. In other words, they enjoy high cumulative stocks of both financial and emotional capital that may help sustain the family and business through turbulent economic and emotional times.
• Pained hearts-deep pockets Quadrant II firms are characterized by business success but also are tension prone or exhibit failed family relationships.
• Warm hearts-empty pockets Quadrant III firms enjoy strong relationships among family members, though their businesses are low performers. In other words, they are endowed with high levels of emotional capital but low financial capital.
• Pained hearts-empty pockets Quadrant IV firms are failed firms that perform poorly on both the family and business end. Although failure on the business dimension can be used as a learning experience that may even enable these family members to launch another venture in future.
The business dimensions and family dimensions that will be assessed according to the family business performance approach in Fig. 1 are measured through several indicators in Table 2. To determine performance, stakeholders provide an assessment of these indicators, with a choice of scores -2 (very bad), -1 (poor), 0 (neutral/constant), 1 (good), 2 (very good). Furthermore, after the score tabulation, the position in the two by two matrix is determined by the equation: where: X = score for the family dimension Y = score for the business dimension N = number of indicators

MICMAC analysis
This research also uses MICMAC sustainability analysis which is a structural analysis tool for determining essential variables in a system (Fauzi, 2019, Wijaya et al., 2020. The variable referred to in this study is related to the willingness to succession in the woodcraft family business in Bali. MICMAC will map each variable in the following quadrants. • Influence variables (key drivers) in Quadrant I are the most crucial variables and act as key factors.
• Relay variables in Quadrant II are variables that are influential but very dependent, so they are often categorized as factors that describe the instability of a system, • Depending variables in Quadrant III are variables with high dependency but have little effect. This variable tends to be sensitive to changes in variable influence and variable relay.
• Excluded variables or autonomous variables in Quadrant IV are variables with little influence and dependency, so they are said to be excluded because they will not stop a system from working.
Apart from that, there is also a middle area for regulating variables, which are variables that are adjustable and controllable, and usually don't need to be discussed or deal with their priorities (Hsiu et al., 2009).

Factors identification
Based on the literature review and FGD, it is possible to identify factors related to the willingness to succession in the woodcraft family business in Bali, as presented in Table 3.

Performance of woodcraft family business
Measuring family business performance certainly does not only pay attention to business aspects, and cannot be separated from traditional economics and kinship. Based on the results of data analysis related to performance measurement, it can be seen the trend of the existing condition of each indicator.  (2022) In accordance with the results of the calculation of the indicator scores in each dimension, x,y = 0.5,-0.125 is obtained so that the performance position of the existing woodcraft family business is in quadrant III. The position in quadrant III means that the performance of the family business in the woodcraft industry is currently with high emotions (warm hearts) but low financial capital (empty pockets).

Mapping of factors related to successor willingness
Based on the results of the MICMAC analysis, it is possible to map the position of each factor related to the willingness to succession in the woodcraft family business, as shown in Fig. 4.   Fig. 4. Direct Influence/Dependence Map Based on Fig. 4, it can be seen the position of each factor/variable on the direct influence/dependence graph. More clearly, the classification of the position of each variable is presented in Table 5. MICMAC also provides information about the strength of each effect between variables. Figure 4 presents the influence between variables, namely: 1) red line, indicated that the influence was very strong; 2) thick blue line, indicating that the influence was relatively strong; 3) a thin blue liner, indicating that the influence was moderate; 4) black line, indicated that the influence was weak; and 5) dashed line, indicating that the influence was very weak. The influence between variables is very important as a basis for determining decisions or policies for stakeholders. In addition, it is very important to obtain information about the stability of the system, namely the influential variables, so it is necessary to re-identify based on indirect influences. Fig. 6 presents a map of indirect influence/dependence map. If Fig.  6 is compared with Fig. 4 previously, it can be seen that there is no change in the variable position of the direct effect classification. This means that the cariables classified as direct effects are stable (Ariyani et al., 2018).
MICMAC also provides an analysis of potential direct influences which illustrates the possibility of changing the classification of variables if there are actions on the system. Fig. 7 presents the potential direct influence/dependence map.

Fig. 7. Potential Direct Influence/Dependence Map
Looking at Fig. 7, we can see that there are several variables that have changed their position, namely the relationship among family members and business formality, which were previously in the input variable (quadrant 1) and the relay variable (quadrant II), shifted to quadrant III (as depending variables). This shift shows that if there is a change in the family business, it will have an impact on the relationships among family members because each member has their own thoughts. Apart from that, the business formality chosen is also strongly influenced by developments in business conditions. This is consistent with the characteristics of depending variables (quadrant III) which have a high dependency. The direct effect on MICMAC refers to existing conditions, while the indirect effect refers to forecasting (future conditions). Forecasting itself is produced from iterations, where the fewer iterations needed (to obtain 100% results), the better. In this case, the iteration was only carried out twice, and the iteration results are presented in Table 6. As for changes in existing conditions and forecasting of future conditions as changes in priority levels (both in terms of influence and dependence) can be seen from a comparison of the list of variables sorted by influence and list of variables sorted by dependence which present position changes in direct and indirect influence.

Fig. 8. List of variables sorted by influence and dependence
As part of a policy review, it is very important to know the priority level of each variable. The proportion matrix in Table 7 below presents the ranking proportion which means the most important for the system being evaluated.  Table 7 shows the priority variables in existing conditions, forecasting, and if there are actions in the system.
• Existing conditions are shown through direct influence and direct dependence. The most influential variable is participation leadership style, followed by industry specific skills and industry specific knowledge. While the most dependent variable is personal interest, followed by the variable of successor's working experience in family business, and industry specific skills variable.
• Forecasting is shown by indirect influence and indirect dependence, where the most influential variables are participation leadership style, followed by industry specific skill variables, and trust in the successor's. Meanwhile, the most dependent variable is not different from the existing condition, namely personal interest, followed by the variable of successor's working experience in family business, and industry specific skills variable.
• The ranking of variables if there are actions, can be seen from the potential direct influence and potential direct dependence (for existing conditions) as well as potential indirect influence and potential indirect dependence (for forecasting). Where the results on direct and indirect influence, as well as direct and indirect dependence are the same. The most influential variables were owner/predecessor characteristics, followed by the relationship between predecessors and successors, and participation leadership style. While the most dependent variables are personal interest, working experience in family business, and commitment to the company.

Conclusions
The woodcraft family business in Bali is currently experiencing a maturity and critical period, because the management is in the transition from the second to the third generation, or the third generation. The results of the analysis of the performance of the family business using the family and financial approaches show that currently the performance of the woodcraft family business on the familial side is high emotional (warm heart), but tends to be low on the financial side. This also triggers shifts or changes in business lines.
The most influential factor, both in existing conditions (direct influence) and forecasting (indirect influence) is participation leadership style, while the most dependent variable is personal interest which is the early involvement of successors in family business activities making it easier for successors to understand the value of family business. If there are actions or policies implemented to influence factors related to willingness to succession, there will be a shift in potential direct influence, where the most influential factor is the owner/predecessor characteristics, and the most dependent is the involvement of the successor from an early age in family business activities. makes it easier for successors to understand the value of the family business.
The woodcraft industry in Bali has cultural values, so considering its sustainability, several recommendations can be made according to the results of this research. The current owner needs to adopt a participatory leadership pattern by involving successors in the family business, both as employees and directly involved in management. Generally, in the transgeneration process, there are more potential successors than the previous generation, so that the owner can assess the interest and commitment of potential successors earlier. The goal is for the successor to have skills and knowledge related to this industry.
Following up on the results of the analysis regarding the performance of the woodcraft family business, where family relations are still well established, this can be used as social capital to jointly improve the business/financial performance of the business. Meanwhile with regard to the transgenerational process, where in this case the industry is in the transition from the second generation to the third generation, or in the third generation, where the risk of conflict will be higher, then further research can be directed to examine objectives and the interrelationships between actors/stakeholders in this industry. Scientifically, to understand the alignment of the definition of success in family business performance, it is also necessary to know the stakeholders of the family business (Poutziouris et al., 2006). Conversely, if there is inconsistency in defining success in a family business, it indicates a source of conflict (Astrachan & McMilan, 2003). So that prospective analysis through the MACTOR technique needs to be considered in future research.