China-USA Business Review, ISSN 1537-1514 August 2012, Vol. 11, No. 8, 1159-1173 Social Performance and Family Firms Succession Bughin Christiane, Colot Olivier, Comblé Karin, Croquet Mélanie, Dupont Claire, Finet Alain Succession accounts for a crucial moment in a family business because it can impact the durability of its activities. The aim of this paper is to analyze the influence of succession on family firm social performance. Using paired samples methodology, three hypotheses were tested upon a sample of Belgian family SMEs that had been handed on. This methodology compares the performances of family SMEs handed on to an internal successor with those handed on to an external successor. Seventy eight pairs of “transmitted SMEs/not transmitted SMEs” were constituted and analysed. Results of this research show that it is desirable to give priority to an internal successor in order to carry out the adequate strategic choices and to obtain the trust of the company staff. The overall results show that social performance of SMEs was affected by the succession (increase in worker productivity, wage cuts, and payroll contraction). However, only the hypothesis of a decrease in workers’ wages could be confirmed in the case of the internal successor. This result confirms the conclusions of previous studies highlighting differences of opinion as to the link between the performance of handed-on companies and the nature of the successor. Keywords: family firm, CEO turnover, human resource management, performance, successor Introduction UMONS, Mons, Belgium Family businesses are the most widespread type of company in the private sector, so they play a considerable role in the economy of most countries and represent between 50% and 90% of the gross domestic product of all market economies (Kenyon-Rouviniez & Ward, 2004). But according to Carlock and Ward (2001), a significant number of family companies do not survive by the change of generation. The succession of companies thus represents an important issue (Cadieux, 2006; Bégin, 2006; Senbel & St-Cyr, 2006). Training programs related to this question have become numerous, in line with political programs of economic development that inevitably comprise a component of awareness of these problems. More precisely, the question of internal or external successor is important because it induces different strategic methods, but especially because it could impact the success of the succession of the family company. At the empirical level, a certain number of studies have been conducted assessing the financial performance of family companies according to whether they are transmitted to an internal or external person. Bughin Christiane, Professor of Accounting, Accounts Department and Management, UMONS. Colot Olivier, Professor of Accounting and Entrepreneurship, Accounts Department and Management, UMONS. Comblé Karin, Professor of Accounting and Audit, Accounts Department and Management, UMONS. Croquet Mélanie, Professor of Finance, Department of Finance, UMONS. Dupont Claire, Scientific research worker, Department of Analysis of Labour Economics, UMONS. Finet Alain, Professor of Management, Department of Financial Management and Corporate Governance, UMONS. Correspondence concerning this article should be addressed to Colot Olivier, 17 Place Warocqué, 7000 Mons, Belgium. E-mail: Olivier.Colot@umons.ac.be. DAVID PUBLISHING D