The Relevance of Finding a Successor Leader from the Personnel Reserve or from Outside

Succession planning is an organizational process of pinpointing or selecting certain competent people as successors for key executive appointments like CEO, CMD, etc. after the expiry of terms of their current occupants and proactively planning their career moves in that direction.
This process is straightforward in a family business where the heirs are obvious and well known. However, in other organizations, succession planning is required to be logical and well thought out management process in short and long terms requiring considerable effort towards grooming an individual for an extended period to take on the top job. This is the only tool we have today which sanctions the organization to plan well-tailored and proactive career moves for their most talented pool of future managers. (Hirsh, 2000)
However, if such succession planning is put off or ignored by the top management, the consequences can be catastrophic. This is especially so if the existing talent pool lacks competencies to take on challenges of a modern business world and there is no suitable candidate available from outside the organization to take on the top job.
Consequently, opinions vary considerably on whether succession plans should involve selection of existing talents within the organization as discussed by Groves, Biggs (2004), Blackler &amp. Kennedy (2004) and Cogner and Fulmer (2003) or top jobs should be handled by tapping talents from the outside market. While selecting employees from within the organization has its own benefits like better motivation, higher integrity, reinforcement of management’s faith in employers, good in-depth knowledge of strengths and weaknesses of the organization and support from within due to a familiar face at the top, but it is true that sometimes familiarity breeds contempt. In addition, there is a possibility of previous conflicts with some good performers complicating or inflating into serious differences of opinions or rivalries. Nevertheless, it can be safely stated that succession planning is an important course of action at senior levels failing which an organization can face tremendous difficulties in the event of a sudden requirement to replace a top executive.