The Mediating Effect of Succession Planning on the Relationship Between Risk Taking and Sustainability Performance

Authors

  • Belinda Jelagat
    Department Of Management Science and Entrepreneurship Studies, Moi University
  • Prof. Michael Korir
    Department Of Management Science and Entrepreneurship Studies, Moi University
  • Dr. Lydia Maket
    Department Of Management Science and Entrepreneurship Studies, Moi University

Abstract

Purpose: The aim of this study was to examine the mediating effect of succession planning on the relationship between risk-taking and sustainability performance of Small and Medium Enterprises (SMEs) in Uasin Gishu County, Kenya. It further sought to determine whether risk-taking directly influences sustainability performance or whether this relationship is strengthened through succession planning mechanisms.


Material/methods:  A quantitative research approach grounded in positivism and guided by a deductive design was adopted. Primary data were collected using structured questionnaires from SME owners and managers in Ainabkoi and Soy Constituencies. From a population of 684 registered SMEs, a sample of 252 respondents was selected using Yamane’s formula. Data were analyzed using SPSS version 23 and PROCESS Macro. Reliability was assessed using Cronbach’s alpha, while construct validity was confirmed through exploratory factor analysis and KMO tests. Multiple regression and mediation analysis were used to test hypotheses.


Findings: Results showed that succession planning fully mediates the relationship between risk-taking and sustainability performance. Risk-taking significantly influenced succession planning (β = .623, p < .001), and succession planning significantly affected sustainability performance (β = .626, p < .001). However, the direct effect of risk-taking on sustainability performance became insignificant when succession planning was included (β = .130, p = .059). The indirect effect was significant (β = .390, CI [.240, .569]).


Conclusion: The study concludes that succession planning is a critical mechanism through which entrepreneurial risk-taking is translated into improved sustainability performance among SMEs. Although risk-taking is important for enterprise growth and adaptation, its contribution to sustainability performance depends largely on the presence of structured succession planning practices that support continuity, leadership preparedness, and long-term organizational stability.


Value: The study highlights succession planning as a key capability translating entrepreneurial risk-taking into sustainable SME performance in developing economies.