Abstract
This research examines the role of family-oriented training design, family-oriented trainer characteristics and family-oriented trainee absorption on family business small and medium enterprises (SMEs) performance in Malaysia. The study also examines whether the effects are mediated by succession planning to provide empirical contributions to business sustainability through human capital development. A quantitative methodological approach was applied, using a questionnaire survey to collect primary data from 396 family business SMEs owners and managers. The data were analysed through partial least squares–structural equation modelling (PLS–SEM) methodology, including hypotheses on measuring and structural models, as well as mediation effects. The results reveal significant effects on family business performance from family-oriented training design and trainer characteristics, with no effects from trainee absorption. The mediation effects of succession planning are partial for training design and trainer characteristics on family business performance, and no mediation effects from trainee absorption.
Keywords
Introduction
Family businesses represent a vital component of national economies worldwide, contributing significantly to employment generation, wealth creation and social stability (Bhukuth et al., 2025; Ibouder et al., 2022; Solodoha & Rosenzweig, 2025). In Malaysia, family business small and medium enterprises (SMEs) account for a large proportion of the country’s entrepreneurial landscape, especially within micro-, small- and medium-sized business segments. Despite their importance, many family business SMEs encounter persistent challenges concerning sustainability, intergenerational continuity, and long-term strategic management (Harini et al., 2025). The most significant of these issues is that there are no formalised mechanisms of entrepreneurial training systems that can support family-based engagements (Moreno-Gené & Gallizo, 2021). This study aims to fill in that gap by analysing the effects of entrepreneurial training system factors on the performance of family business SMEs. This study comprises three dimensions of entrepreneurial training factors, which include: family-based training process designs, family-based trainer capacities and family-centred trainee absorptions. Succession planning is considered an indicator variable in the entrepreneurial training model.
It is generally accepted that entrepreneurial training programmes are essential for providing business owners and subsequent family members with knowledge, skills and competencies to promote competitive performance and business continuity (Nor, 2024). However, most government-funded entrepreneurial training programmes in Malaysia have been developed based on a generic, non-family business perceived conception, without incorporating specific family considerations, including relational interdependence, family governance, and succession planning (Mostafiz et al., 2021). This matter presents great concern since it is widely understood that the long-term success and continuity of family businesses depend not only on market competitiveness but also on internal dynamics of trust, loyalty, tradition and stability of family members in business management (Jayantilal et al., 2024).
Within this context, the design of entrepreneurial training programmes becomes a vital consideration. Training design refers to the structured content, learning methodologies and objectives embedded in training programmes, tailored to address specific learner needs (Jayantilal et al., 2023). In family business settings, it is necessary to incorporate family-orientation concepts such as tradition, stability, loyalty, trust and interdependency into training content to reflect the unique relational and operational realities faced by these businesses. Prior research (Ibouder et al., 2022) has consistently indicated that training programmes customised to participants’ contexts yield better outcomes in terms of knowledge application, decision-making quality and business performance.
Equally crucial to training effectiveness is the role of the trainer. Trainer attributes such as expertise, empathy, credibility and cultural sensitivity directly influence trainee motivation, learning absorption, and application of acquired knowledge (Koellner & Roth, 2025). In family businesses, trainers must possess not only technical business acumen but also a deep understanding of family business complexities, including succession dilemmas, conflict management and balancing business decisions with family expectations (Maciel et al., 2022). Despite its importance, there is limited research on how family-centric trainer attributes impact the business performance and strategic decision-making of family business SMEs in Malaysia.
A third important dimension is the trainee’s learning absorption, which represents the ability of business owners and their successors to identify, assimilate and exploit knowledge gained through entrepreneurial training for operational and strategic advantage (Yan & Zhang, 2023). In family business SMEs, learning absorption is particularly complex due to overlapping family and business roles, informal decision-making structures and emotional attachments that may hinder objective knowledge application (García-Ventura et al., 2021). While some studies, such as Al Rawaf and Alfalih (2024), have found that strong absorptive capacity enhances business performance and succession planning, evidence remains inconclusive, especially in younger or micro-sized family business SMEs.
Succession planning is one of the most pressing concerns for family businesses globally. It involves the deliberate identification, preparation, and transfer of leadership and ownership roles to the next generation (Sahputri et al., 2023). In Malaysia, succession planning practices in family business SMEs are often informal, reactive and under-prioritised, posing significant risks to business continuity (McAdam & Alrubaishi, 2021). Past literature suggests that well-designed, family-oriented training programmes, delivered by empathetic, experienced trainers and absorbed effectively by family business owners, could positively influence succession planning practices, which in turn enhance overall business performance (Qureshi et al., 2022).
While family business SME performance is considered the ultimate outcome variable in this study, encompassing financial indicators like profitability and sales growth, as well as non-financial measures such as business reputation, family harmony and sustainability. Prior studies confirm that training and development activities have a positive influence on SME performance (Dewitt et al., 2023), but few have explored how these outcomes are shaped by the interaction of family-specific training elements and succession processes.
Following the above discussion, this study is positioned to fill significant gaps in the entrepreneurial training and family business literature by exploring the unique relationships between family-orientation training design, family-centric trainer attributes and family-centric trainee absorption on family business SMEs’ performance, mediated by succession planning. The findings will provide evidence-based insights for policymakers, training providers, and family business owners on how to design and implement more effective entrepreneurial training frameworks tailored for the family business sector.
The resource-based view (RBV) provides the theoretical foundation for this study. RBV argues that firms achieve sustainable competitive advantage by effectively leveraging valuable, rare, inimitable and non-substitutable resources (Barney, 1991). In the family business SME context, the three entrepreneurial training factors examined in this research—family-orientation training design, family-centric trainer attributes and family-centric trainee absorption—are conceptualised as intangible, knowledge-based resources that strengthen human capital. When these resources are effectively developed and aligned, they enhance succession planning, which serves as a strategic organisational capability ensuring continuity across generations. Ultimately, the integration of these internal resources contributes to superior family business SME performance, consistent with RBV’s central proposition that competitive advantage stems from the control and deployment of unique internal capabilities.
Review of Literature
The Underpinning Theory
The RBV provides a widely used theoretical lens for understanding how firms build and sustain competitive advantage by developing and leveraging internal resources that are valuable, rare, inimitable and non-substitutable (Barney, 1991). Within the family business context, RBV has been increasingly applied to examine intangible resources such as trust, relational capital and knowledge transfer that shape both short-term performance and long-term continuity (Jayantilal et al., 2024; Mostafiz et al., 2021). Prior research highlights that family firms often rely less on external market resources and more on internally cultivated capabilities, particularly human capital and governance structures, to secure their survival across generations (Umans et al., 2021).
Building on this perspective, the present study frames family-orientation training design, family-centric trainer attributes and family-centric trainee absorption as critical intangible resources that enhance the knowledge base and competencies of family business SMEs. When developed effectively, these resources strengthen succession planning, which RBV positions as a strategic organisational capability ensuring intergenerational continuity and sustained advantage. In turn, these enhanced internal capabilities drive overall family business SME performance. Accordingly, RBV not only underpins the conceptual framework but also provides explanatory power for why entrepreneurial training interventions, when tailored to family-specific contexts, can produce lasting performance outcomes. The framework of the study is reported in Figure 1.

Research Framework.
Hypotheses Development
Training design is an integral factor within entrepreneurial training, defined as a structured construct presented during the learning process, including family-orientation elements. Previous studies highlighted the significant role of training design in influencing employee and business performance (Urban & Nonkwelo, 2022). Harini et al. (2025) argued that training must be paired with good planning, incorporating clear objectives, appropriate methods and relevant content to yield favourable outcomes. In the Malaysian SMEs context, Mostafiz et al. (2021) emphasised the importance of training programmes specifically designed to address entrepreneurial needs, enabling business owners to develop flexibility and adaptability for market changes, eventually improving business performance and sustainability. McAdam and Alrubaishi (2021) also stressed that well-designed training programmes benefit businesses by stimulating positive performance, especially when tailored to trainees’ needs, which enhances training effectiveness and increases the likelihood of training transfer. This leads to the following hypothesis:
H1: Family-orientation training design has a significant effect on the performance of family business SMEs.
Trainer attributes are a key contributor to entrepreneurial training, which fosters positive business outcomes. Trainers are expected to engage constructively, positively impacting both individual outcomes and business results (Pratono & Han, 2022). In this regard, trainer attributes are described as characteristics or traits, such as family-orientation, that are possessed by a trainer (Umans et al., 2021). Previous research has established evidence of the positive influence of trainer attributes on learner outcomes and ultimately business performance (Jayantilal et al., 2024). Koellner and Roth (2025) found that business owners who acquire knowledge and skills relevant to their business from trainers realise greater profit than business owners who educate themselves. This emphasises the influence of the trainer. In addition, trainer knowledge and competencies have been linked to possible profitability, growth and minimising extinction for SMEs (Allioui et al., 2023). Trainer attributes have been found to have a greater influence on training outcomes than learner attributes, eventually improving business performance. Hence, the following hypothesis is proposed:
H2: Family-centric trainer attributes have a significant effect on the performance of family business SMEs.
Learning absorption by trainees is a significant component of entrepreneurial training, particularly for SMEs of family businesses. Learning absorption is defined as the capacity to discover, absorb and use knowledge through the learning process (Zapata-Cantu et al., 2023), including family-orientation values such as tradition, loyalty and interdependence in that process. Previous studies have further demonstrated the importance that learning absorption has on influencing business performance. Sahputri et al. (2023) particularly stressed on an SME’s ability to adapt, innovate and transform knowledge in order to survive as a business. Paunović et al. (2024) similarly described an instance where business owners failed to leverage their marketing knowledge when using training programmes that ultimately meant their products were poorly branded and thus business performance was negatively influenced. Jahmurataj et al. (2023) also highlighted the importance of the actions of the trainees as linking their acquired knowledge and skills to practices within their business upon the completion of their training. Abbas et al. (2025) further highlighted the significance of both assimilating and exploiting knowledge to produce real benefits for their businesses. Hence, the following hypothesis is proposed:
H3: Family-centric trainee absorption has a significant effect on the performance of family business SMEs.
Management of succession planning is an important function in a family business, and it should be taken more seriously by the owner. This study covers the management of the dynamics leading to business transition between owners and successors (Sklair & Glucksberg, 2020). Previous research has referenced training platforms designed specifically for family business succession planning that serve to contribute to successor development in preparations for succession (Gillet & Huyghebaert-Zouaghi, 2025). Raby and Valeau (2021) indicated that specifically designed training programmes will foster engagement and produce positive results, including better succession processes. Stirzaker et al. (2022) expanded that family-oriented dimension of training, such as tradition, stability, loyalty, trust and interdependence, would create better management and succession planning practices. This leads to the following hypothesis:
H4: Family-orientation training design has a significant effect on succession planning.
Trainers in entrepreneurial training programmes are important to help family businesses manage succession planning, in addition to funding and time committed to training activities (Eshtrefi, 2023). Training both owners and successors is group knowledge, providing essential and effective succession practices in family business SMEs (Radu-Lefebvre et al., 2022). Trainers are engaged in educating business owners about the importance of succession planning, which helps to create a harmonious business climate and maintain family legacy through appropriate transition and management (Wittmer et al., 2022). Trainers will highlight to business owners, and instil the value of succession planning prior to operations, and suggest to business owners that the practices are ones they can and should encourage. Hence, the following hypothesis is proposed:
H5: Family-centric trainer attributes have a significant effect on succession planning.
Trainee learning absorption is crucial not only for measuring training programme effectiveness (Kumar et al., 2023) but also for enabling family business SME owners to identify, assimilate and exploit knowledge for business benefits (Gjergji et al., 2021). It plays a vital role in ensuring smooth business operations, including succession planning management (Mihaylov & Zurbruegg, 2021). The degree to which succession planning is effective is based on how effectively owners identify and integrate learning and ultimately transform and transfer that knowledge to successors to ensure movement and continuity (García-Ventura et al., 2021). Hence, the following hypothesis is proposed:
H6: Family-centric trainee absorption has a significant effect on succession planning.
The critical knowledge and skills an entrepreneur has will greatly help with continuous improvements and long-term performance of the business, particularly for entrepreneurs leading family business SMEs. Chilenga et al. (2022) emphasised how entrepreneurial training increases entrepreneurs’ knowledge and skills, which helps create business growth and development that is essential for sustainable business. Eshtrefi (2023) also showed training and development activities leading to profit, indicating that businesses engaging with continuous entrepreneurial learning are more likely to achieve better financial outcomes than those that do not. This shows that optimal entrepreneurial training improves business practices, which in turn can improve operational performance (Polat & Benligiray, 2022).
Further evidence regarding why succession planning is typically considered one of the important factors for whether or not a family business will continue to exist, long into the future (Wittmer et al., 2022) was highlighted in empirical research completed by Moreno-Gené and Gallizo (2021). They described how succession planning allows for business succession to happen smoothly by preparing the current business owners and potential successors to lead the business into the future. This would be particularly important for any family business transition that involves generational differences. From empirical research in Malaysia, Jahmurataj et al. (2023) found a strong positive relationship between succession planning practices and family business performance. Ferrari (2023) also found similar evidence of a weaker but positive relationship. Nevertheless, their findings helped to provide evidence as to why adequate succession planning leads to successful business continuity for a family business over time. Based on this discussion, the following hypotheses are proposed:
H7a: Succession planning has a significant mediation effect in the relationship between family-orientation training design and the performance of family business SMEs. H7b: Succession planning has a significant mediation effect in the relationship between family-centric trainer attributes and the performance of family business SMEs. H7c: Succession planning has a significant mediation effect in the relationship between family-trainee absorption and the performance of family business SMEs.
Methodology
This study utilised a quantitative, explanatory and cross-sectional research design to investigate entrepreneurial training factors and family business SMEs performance in Malaysia. Three entrepreneurial training factors were examined for their effects on family business SMEs’ performance: family-centric (a) training design, (b) trainer characteristics and (c) trainee absorption. This study also evaluated the role of succession planning as a mediator of the relationship. Quantitative methodology was a preferred choice for this study because it supports objective measurement of some variables and allows researchers to test causal relationships by testing hypotheses with test statistics. Survey data were collected through structured, self-administered questionnaires from family business owners attending government-organised entrepreneurial training programmes. The cross-sectional aspect of the research design allowed the researchers to contact family business owners and collect data at one time, providing a snapshot of the respondents’ views around the implications of entrepreneurial training factors on family business performance and succession planning, based on self-reported data. The research design presented in this study is in line with previous studies (Mokhber et al., 2017).
The participants in this study were small- and medium-sized family businesses in Malaysia that had participated in entrepreneurial training programmes delivered by government agencies. However, because there is no official national database that identifies family business SMEs that have participated in these programmes, the researcher operationally defined the population according to certain set criteria for family business based on the criteria developed by Intihar and Pollack (2012) and applied to the Malaysian SME context. This research extended the model utilised by Intihar and Pollack (2012) that defined family businesses by qualifying that the pre-selected businesses had to be more than 50% family owned, had family members actively involved in making strategic decisions in the business and that there were at least two family employees including the owner, and had succession intentions, in that the businesses were planning succession within family which reflects continuity orientation. This family business targeted population met the purpose of study as it allowed for exploration of how entrepreneurial training intervention catered to family businesses influencing business outcomes based on succession plans and family cohesion.
Due to a lack of a complete sampling frame for family business SMEs in Malaysia and the infeasibility of accessing this target population, the study used a convenience sampling method. A non-probability sampling method was used in conjunction with five government agencies that conduct entrepreneurial training: Majlis Amanah Rakyat, Federal Agricultural Marketing Authority, Construction Industry Development Board (CIDB-JPS), Perbadanan Kemajuan Negeri Pahang and Perbadanan Kemajuan Negeri Selangor. The government agencies were selected because they primarily target small and micro-entrepreneurs, the majority of which are family-owned businesses. The researchers distributed surveys over the course of 15 entrepreneurial training sessions hosted by these agencies in multiple states: Penang, Selangor, Kuala Lumpur, Pahang and Johor. Convenience sampling was the appropriate method considering logistical constraints, the variability of training schedules and not having a master list of family business SMEs.
Determining an appropriate sample size was an important consideration for statistical power and generalizability of the study findings. In accordance with guidelines for quantitative research outlined by Hair et al. (2011), the required minimum sample size was calculated using G-Power statistical software, which considers the number of predictors, statistical power desired, effect size and significance level. Using a statistical power of 80%, a medium effect size ( f ² = 0.15), a significance level of 5% and six predictors for the research model, the targeted minimum sample size was established at 114 respondents. However, the study planned to exceed the minimum sample size to enhance the reliability of findings and accommodate potential non-responses by setting the target to a minimum of 342 respondents. The data collection instrument was a structured self-completed questionnaire, which was developed in English and Bahasa Melayu to correspond with the language preferences of respondents.
Data Analysis and Findings
The demographic profile of the respondents in this study reveals a higher participation rate among female entrepreneurs, who comprised 59.1% of the sample (n = 234), compared to 40.9% male respondents (n = 162). In terms of ethnic composition, a significant majority identified as Bumiputra, accounting for 97.2% (n = 385) of the total sample, while only 2.8% (n = 11) were non-Bumiputra entrepreneurs. The age distribution indicates that over half of the respondents (50.3%, n = 199) were between 24 and 38 years old, followed by those aged 39–53 years (29.0%, n = 115). Younger entrepreneurs, aged 23 years and below, represented 16.9% (n = 67) of the respondents, while the remaining 3.8% (n = 15) were in the 54–74 years age category. Regarding educational attainment, the largest segment of respondents had completed secondary education (38.9%, n = 154), followed by those holding a diploma (32.6%, n = 129). A smaller proportion had obtained a degree (12.4%, n = 49), while 9.6% (n = 38) possessed a certificate qualification. Respondents with primary education comprised 1.8% (n = 7), while those holding a master’s degree and PhD qualification made up 3.3% (n = 13) and 1.0% (n = 4) respectively, indicating a relatively diverse educational background within the sample.
In terms of business characteristics, the services sector dominated the industry distribution, with 298 businesses (75.3%) operating in this category, followed by the manufacturing (44 businesses), construction (37 businesses) and agriculture (17 businesses) sectors. Micro-enterprises constituted the largest business size group, representing 216 businesses, while 124 were classified as small enterprises and 56 as medium enterprises. Concerning business form, the vast majority of respondents operated as sole proprietors (75.8%, n = 300), with 18.7% (n = 74) engaged in partnerships and 5.6% (n = 22) under limited liability partnerships. Business age distribution shows that a significant portion of businesses were relatively young, with 34.3% (n = 136) operating for 18 months or less and 26.8% (n = 106) between 19 and 36 months. The remaining businesses were 37–60 months old (14.9%, n = 59), 61–120 months (9.6%, n = 38) and 14.4% (n = 57) had been established for over 121 months. These findings suggest that most of the family business SMEs surveyed are at an early to mid-stage of business development, predominantly engaged in the services sector, and primarily structured as sole proprietorships.
Furthermore, the results of convergent validity presented in Table 1 indicate the reliability and validity outcomes for the measurement model based on factor loadings, composite reliability (CR) and average variance extracted (AVE) values for each construct. All factor loadings were above the recommended level of 0.60 (Hair et al., 2011), implying that all the items across the constructs had adequate indicator reliability. Specifically, the family-orientation training design construct had factor loadings ranging from 0.652 to 0.770 to indicate adequate internal consistency, a CR of 0.932 with a recommended level of 0.70 and an AVE value of 0.512 with a minimum cut-off value of 0.50 indicating adequate convergent validity.
Convergent Validity.
All three constructs of family-centric trainer attributes and family-centric trainee absorption also had robust measurement properties. Family-centric trainer attributes had factor loadings ranging from 0.731 to 0.824, a CR of 0.917 and AVE of 0.581, demonstrating ample construct reliability with some level of convergent validity. Family-centric trainee absorption had factor loadings ranging from 0.671 to 0.811, a CR of 0.923, and an AVE of 0.600, which also met the recommended quality level. It should be noted that the internal consistency estimates of succession planning and family business SMEs performance were considerably high, CR of 0.931 and 0.939, respectively, and AVEs of 0.730 and 0.719, suggesting strong reliability and convergent validity of the measurement model of these two constructs.
Discriminant validity of the constructs was assessed using the heterotrait–monotrait (HTMT) ratio as suggested by Henseler et al. (2015). HTMT is a more thorough and sensitive method than the original Fornell–Larcker criterion; there are some threshold recommendations to help identify discriminant validity problems in PLS–SEM. For the current study, HTMT values ranged from 0.360 to 0.834. All of the values are below the conservative criterion of 0.85, which indicates each construct demonstrates adequate discriminant validity compared to other constructs. Thus, the findings in Table 2 collectively affirm that the measurement model satisfies the discriminant validity requirement according to the HTMT criterion.
Discriminant Validity.
To assess the presence of multicollinearity among the predictor variables in the structural model, the variance inflation factor (VIF) values were examined (see Table 3). According to Hair et al. (2011), VIF values below 5.0 indicate that multicollinearity is not a serious concern in the model, while values exceeding this threshold suggest potential redundancy among predictor variables. In this study, all VIF values for predictors of family business performance (FBP) and succession planning (SP) ranged from 1.790 to 2.898, comfortably below the critical value of 5.0.
Variance Inflation Factor.
The coefficient of determination (R²) values indicate the proportion of variance in the endogenous constructs explained by their respective predictor variables within the structural model. According to Hair et al. (2011), R² values of 0.25, 0.5, and 0.75 are considered weak, moderate and substantial, respectively, in the context of social science research. In this study, the R² value for FBP was 0.270, suggesting that approximately 27% of the variance in family business performance is explained by the combined influence of the predictor variables, namely family-orientation training design, family-centric trainer attributes, family-centric trainee absorption, social capital (SC) and succession planning. This indicates a moderate explanatory power of the model for business performance outcomes among family business SMEs.
Meanwhile, the R² value for SP was reported at 0.424, implying that about 42.4% of the variance in succession planning is accounted for by its associated predictor variables. This reflects a moderate predictive strength, indicating that the entrepreneurial training factors considered in this study, including training design, trainer attributes and trainee absorption, meaningfully contribute to explaining how succession planning is carried out within family business SMEs (see Table 4).
Coefficient of Determination.
The effect size ( f ²) measures the contribution of each exogenous construct to the R² value of an endogenous construct when it is included in the model, offering insight into the substantive impact of each predictor (Cohen, 1988). As a guideline, effect sizes of 0.02, 0.15 and 0.35 are interpreted as small, medium and large, respectively. In this study, the effect size assessment reveals that family-orientation training design (TD) exhibits the strongest effect on both FBP ( f ² = 0.188) and SP ( f ² = 0.189), indicating a medium effect according to the Cohen (1988) threshold. This underscores the substantial importance of well-designed, family-oriented entrepreneurial training programmes in enhancing both business outcomes and succession preparedness within family business SMEs.
Family-centric trainer attributes (TA) also demonstrated medium effect sizes on both FBP ( f ² = 0.169) and SP ( f ² = 0.153), highlighting the critical role of trainers’ competency, credibility and empathy in influencing not only the businesses’ immediate performance but also their long-term succession planning processes. Conversely, family-centric trainee absorption (TAB) exhibited very small effect sizes on FBP ( f ² = 0.007) and SP ( f ² = 0.010), suggesting that while knowledge absorption from training is beneficial, its isolated impact on these outcomes is relatively limited when compared to training design and trainer attributes.
Lastly, SC registered a negligible effect size ( f ² = 0.000) on FBP, indicating no observable incremental contribution in explaining variance in family business performance within the tested model. These results collectively suggest that while certain entrepreneurial training factors have meaningful impacts, others play more supportive or indirect roles in influencing key outcomes in family business SMEs (see Table 5).
Effect Size Assessment.
Moreover, the analysis of direct effects demonstrates that several hypothesised relationships in the proposed model are statistically significant. Hypothesis H1 tested the relationship between family-orientation training design (TD) and FBP and revealed a strong, positive and highly significant effect (β = 0.341, t = 6.994, p < .001), thus supporting the hypothesis. This result highlights the importance of incorporating family-oriented design elements within entrepreneurial training programmes in directly enhancing the performance of family business SMEs (see Table 6).
Direct Effects.
Similarly, hypothesis H2 examining the direct effect of family-centric TA on FBP was also supported (β = 0.257, t = 3.412, p = .001). This finding suggests that the competency and relevance of trainers significantly influence business performance outcomes. In contrast, hypothesis H3 testing the direct relationship between family-centric trainee absorption (TAB) and FBP was not supported (β = −0.097, t = 1.285, p = .199), indicating no significant direct effect, and implying that trainee absorption alone may not be a decisive factor in determining business performance in this context.
In terms of the antecedents to SP, hypothesis H4 established a significant positive relationship between TD and SP (β = 0.364, t = 4.963, p < .001), emphasising the value of family-oriented training design in succession preparedness. Likewise, Hypothesis H5 testing TA and SP showed a significant but moderate positive relationship (β = 0.158, t = 2.128, p = .034). However, hypothesis H6 examining the link between TAB and SP was not supported (β = 0.135, t = 1.706, p = .088), as the relationship was not statistically significant. These findings collectively suggest that while training design and trainer attributes play pivotal roles in both performance and succession outcomes, the direct effect of knowledge absorption by trainees appears less influential in this context.
The mediation analysis examined the indirect effects of family-orientation training design (TD), family-centric TA, and family-centric trainee absorption (TAB) on FBP through the mediating role of SP. The results revealed that SP significantly mediates the relationship between TD and FBP (β = 0.092, t = 2.421, p = .016), supporting hypothesis H7a. This finding underscores the critical role of succession preparedness as a mechanism through which well-designed training programmes contribute to enhanced business performance. Similarly, hypothesis H7b was supported, as SP significantly mediated the relationship between TA and FBP (β = 0.064, t = 2.078, p = .038), suggesting that trainer attributes indirectly influence performance outcomes via their contribution to effective succession planning. In contrast, hypothesis H7c was not supported, as the indirect effect of TAB on FBP through SP was not statistically significant (β = 0.028, t = 1.710, p = .088). This indicates that while trainee absorption may be important, its indirect influence on performance through succession planning is limited in this context (see Table 7).
Mediation Effects.
Discussion
This study found that training design has a significant relationship with the performance of family business SMEs, supporting past research (García-Ventura et al., 2021). A well-structured training programme tailored to participants’ specific needs, particularly one embedding family-orientation values such as tradition, stability, loyalty, trust and interdependency, contributes positively to business performance. Like Yan and Zhang’s (2023) findings among employees, this study, focusing on SME owners, confirmed that relevant, customised training promotes active participation and favourable business outcomes.
Second, this study found that family-centric trainer attributes had a significant relationship with family business SME performance, supporting past findings (Jayantilal et al., 2024). Trainer qualities such as empathy, competency and credibility enable trainees to grasp learning effectively, translating it into positive business outcomes. As most businesses in this study had three years or less of operational experience, the owners were still developing essential knowledge and skills (Stirzaker et al., 2022). Trainers, therefore, play a crucial role in equipping them for growth and sustainability.
Third, this study found that family-centric trainee absorption has no significant effect on the performance of family business SMEs. This contradicts past findings which reported a positive relationship between trainee absorption and business outcomes (Moreno-Gené & Gallizo, 2021). The insignificance of this result may be attributed to the fact that most businesses in this study were newly established, within three years or less, and lacked strong networks with external stakeholders, including awareness and access to government support programmes (Sahputri et al., 2023).
Fourth, this study found that family-orientation training design has a significant effect on succession planning among family business SMEs. The result aligns with earlier findings that training programmes specifically addressing succession planning are vital for preparing capable successors (Koellner & Roth, 2025). Training that incorporates family values such as commitment, fairness and trust supports the development of effective succession strategies by promoting unity and synchronising internal practices among family members (Maciel et al., 2022).
Fifth, this study found that trainer attributes had a significant relationship with the performance of family business SMEs, supporting earlier findings on the trainer’s critical role in influencing business practices (Dewitt et al., 2023). Trainer attributes in this context refer to qualities and competencies possessed by trainers conducting entrepreneurial training, particularly incorporating family-orientation values during the learning process (Jackson & Dunn-Jensen, 2021). Chang and Besel (2021) emphasised that trainers, alongside financial and time resources, are essential in equipping businesses for succession planning and long-term sustainability.
Moreover, this study found that family-centric trainee absorption has a non-significant relationship with succession planning among family business SMEs. This finding contrasts with earlier studies, which reported a positive link between learning absorption and business practices such as succession planning (Raby & Valeau, 2021). Lévesque and Subramanian (2022) argued that businesses capable of absorbing and applying knowledge are better positioned to execute effective succession plans. Similarly, Ferrari (2023) highlighted that learning capability enables family businesses to navigate both operational and family-related challenges, including the complexities of succession planning.
Additionally, this study found that succession planning mediates the relationship between family-orientation training design and the performance of family business SMEs. The result aligns with Jasir et al.’s (2023) findings, where succession planning mediated the relationship between management practices, family relationships, job and family values and business performance. Notably, the job and family values construct in Gillet and Huyghebaert-Zouaghi (2025) study parallels the family-orientation training design in this study, which emphasises tradition, stability, loyalty, trust and interdependency.
Moreover, the study confirmed that trainer attributes are a strong influence on performance for family business SMEs and that the relationship was enhanced further with good succession planning. These findings support Haak-Saheem et al. (2022), who suggest that trainers are a significant contributor to entrepreneurial training through participant engagement and motivation relied on by trainers. The essential attributes of trainer competence and trainer empathy are particularly useful when working to provide training that integrates business content with family content, thus helping owners not only work on operational processes but on family processes as well.
Finally, the findings of this study showed that succession planning will not have a mediating effect on the relationship between trainee absorption and business performance. This finding is contrary to Rosecká and Machek (2023), who claimed that if effective and appropriate knowledge transfer happens through generations, then the performance of a family business would improve and sustain competitive advantage through improved knowledge management processes. The absence of a mediating effect in this study was most likely due to the incapacity of the owners to detect, assimilate and utilise newly acquired knowledge that came from their entrepreneurial training, especially the government-offered training. The small to medium participating businesses, which were largely newly formed, had limited access to external networks and strategic learning pathways, which tempered their ability to acquire and utilise related knowledge.
Theoretical Implication
This research enhances RBV theory by exemplifying how internal resources provided by entrepreneurial training can foster the performance of family businesses SMEs. The study observes three family resources: family-orientation training design, family-oriented trainer characteristics and family-oriented trainee learning absorption. These are ultimately conceived as valuable, rare and inimitable resources, being aligned with the RBV expectation that firms have a competitive advantage by developing and using their internal capabilities. In particular, the study confirms that training design tailored with family-orientation values such as tradition, stability, loyalty, trust and interdependency serves as a strategic intangible resource for family business SMEs. This finding extends the RBV perspective within the family business context, which often emphasises tangible resources while overlooking the significance of knowledge-based and relational resources developed through structured training interventions.
Moreover, the study reinforces the importance of trainer attributes, particularly empathy, credibility and competence, as essential people-based resources in FBP. These human capital elements directly influence not only business practices but also long-term strategies such as succession planning, a critical issue for family business sustainability. While much of the RBV literature has concentrated on financial, physical or technological assets, this study adds to a growing body of work emphasising intangible, knowledge-based and relational resources, especially those derived from entrepreneurial training. The findings suggest that structured, context-specific training programmes that address family business characteristics can cultivate unique organisational capabilities, positioning family business SMEs for improved performance and long-term competitiveness. In doing so, this study offers a refined application of RBV by highlighting entrepreneurial training-derived resources as essential internal capabilities within family business SMEs, contributing to sustained advantage and operational continuity in dynamic market environments.
Practical Implication and Policy Recommendation
This study offers several practical implications for policymakers, training providers and family business owners by focusing on three key entrepreneurial training variables: family-orientation training design, family-centric trainer attributes and family-centric trainee absorption. First, the findings emphasise the need for government agencies such as the Ministry of Entrepreneur Development and SME Corp Malaysia to design entrepreneurial training programmes tailored specifically for family business SMEs. These programmes should incorporate family-orientation values, namely interdependency, tradition, trust, stability and loyalty, into their training modules. Given resource constraints, emphasis should be placed on the three most impactful dimensions identified in this study: interdependency, tradition and trust. Through the incorporation of these aspects, training providers can deliver more contextually relevant and efficacious programmes for family businesses that reflect the nature and succession issues encountered in family businesses.
Second, this article emphasises the potential contribution of trainer attributes in determining training effectiveness for family business SMEs. Government agencies need to focus on improving the quality of trainers using empathy, competency and credibility. Trainers with demonstrated people skills and familiarity with family business processes will typically respond to sensitive issues like family conflict, succession issues and preserving family unity the drivers of FBP. Third, trainee absorption was deemed less influential on succession planning issues relative to newer micro-enterprises, but it still means that family business owners need to consciously promote a culture of application of knowledge and long-term thinking. Training providers should implement follow-up mentoring or coaching sessions to enable business owners to convert their new knowledge into business aspects, particularly around succession, resource use and maintaining family operating values. Together, these findings will help both policymakers and practitioners enhance entrepreneurial training systems to better serve the circumstances of family business SMEs and their ultimate prospects for performance and endurance.
Footnotes
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Funding
The authors received no financial support for the research, authorship and/or publication of this article.
