There are four main  types of owner-manager

1. The protectionist - the owner-manager wants to maintain the business at its current size, thus protecting his investment.
2. The business-oriented - the owner-manager wants to both grow and control the business in order to protect his investment.
3. The dynast -  the owner-manager wants to grow the business in order to protect his investment and pass it on to the next generation.
4. The family business - the owner-manager wants to keep the business at its current size and pass it on to the next generation.

Founders are unable to adapt to the needs of the growing firm.  They cannot and will not break old habits and learn new skills.

• As firms grow they become more complex and this complexity has to be managed.
• Founder experiences problems - he cannot make all the decisions and he believes that only he can make the right decisions.
• The founder is reluctant to lose control of the business, wanting to “do it all himself rather than manage others, so the growth potential of the firm is strictly limited by his personal energy and capacity”.
• Reluctant to bring in senior level executives and give them power.
• Entrepreneurship is a team effort - most studies focus on entrepreneurs as individuals when in reality, they are often part of a team.
• Problem of succession - especially in family firms - one of the greatest challenges facing the entrepreneur.

Appears easy but is not and is often marked by

• Increased levels of inter-personal conflict
• Attention to short-term profits rather than long-term goals
• Management procedures emphasising the short-term
• No defined process for integrating other family members
• Difficulty in valuing diverse contributions

Also the founder frequently does not wish to relinquish his hold over the business and may view with hostility any attempt by the family to remove him. The family may not want to confront the issue and so defer any action until it is unavoidable, by which time the business often has big problems.

• Recommended to start planning for succession 5-20 years beforehand.
• Often the founder is looking for a clone of himself but it is important that the successor is appropriate for both the culture that is being created and the stage of its development.
• The founder and successor have to be compatible.
• The heir must respect the founder’s attachment to the venture and be sensitive to his feelings of ownership, while at the same time being able to initiate change.
• The founder has to convert from being a leader to being a mentor or coach and from being a doer to being an adviser.
• The founder may not be the right person to choose a successor - he may establish a board of advisers, composed of people outside the firm, with no personal self-interest in the appointment.

Source: Birley (2000)