South Asian Journal of Social Studies and Economics

This study aims to explore the factors influencing family business sustainability in Sri Lanka, focusing on key internal and external factors. Family businesses play a vital role in the Sri Lankan economy. However, they also face sustainability challenges that hinder their long-term viability. Sustainability in family businesses is an emerging research area, although its understanding in the Sri Lankan context remains limited. Exploring these key factors sheds light on how internal and external factors contribute to the sustainability of family businesses. A qualitative, cross–sectional research design was used to explore the factors influencing family business sustainability in Sri Lanka. The study was conducted among family business owners in Sri Lanka between October and December 2024. This study employed a qualitative approach using purposive sampling and semi-structured interviews with 12 family business owners across 8 different industries. NVivo 10 QSR software was used to conduct the data analysis. The findings revealed key internal factors such as succession planning, leadership transition, innovation, and competitive advantage and key external factors, including social networks and digital technology. Moreover, economic crises, labor migration, and industrial challenges have emerged as challenges for Sri Lankan family businesses. Family businesses in Sri Lanka are shaped by both internal and external drivers, while also emphasizing the importance of formal structure planning and knowledge transfer. This study provides a holistic view for the upcoming generation of family business leaders, emphasizing the key determinants they must consider to ensure success in developing economies.