204 Int. J. Entrepreneurship and Small Business, Vol. 34, No. 2, 2018 Copyright © 2018 Inderscience Enterprises Ltd. The succession process from the perspective of financial institutions: a focused view on external vs. internal succession Mario Situm* Institute for Corporate Restructuring, University of Applied Sciences Kufstein, Andreas Hofer-Straße 7, 6330 Kufstein, Austria Email: mario.situm@fh-kufstein.ac.at *Corresponding author Stefan Märk Institute for Business Administration and Entrepreneurship, University of Applied Sciences Salzburg, Urstein Süd 1, 5412 Puch/Salzburg, Austria Email: stefan.maerk@fh-salzburg.ac.at Abstract: Financial institutions remain the backbone of the European financial market. Their core business is the receipt of compensation for lending money to companies. However, the decision to lend is not the result of a simple process. Different types of risk have to be considered, in particular for family businesses. This paper approaches analysis of this topic in an interesting new way: combining aspects of financial theory and associated risks with the various types of internal and external succession. Financial institutions were asked to share their preferences concerning internal and external succession across a range of different associated issues. This paper provides the results of this financial institution survey as well as a comparison to existing literature. It also includes the applied combination of crises in family businesses with their succession process, moving towards an idea to determine an optimal moment for succession. Indeed, this optimal moment could be connected to recognised financial theories currently in existence. Keywords: financial institutions; management buy-out/management buy-in; MBO/MBI; family business; succession process. Reference to this paper should be made as follows: Situm, M. and Märk, S. (2018) ‘The succession process from the perspective of financial institutions: a focused view on external vs. internal succession’, Int. J. Entrepreneurship and Small Business, Vol. 34, No. 2, pp.204–232. Biographical notes: Mario Situm is a Professor for Corporate Restructuring at University of Applied Sciences, Kufstein, Austria. He has previously worked in the banking industry for ten years and is currently involved in research concerning strategic controlling, risk management, crisis and insolvency prediction and family businesses.