The Resilience of Family Firms During Crisis

Abstract

The authors of this study aimed to investigate the issue of resilience in family firms during times of crisis. They recognize that a crisis can impact not only the business itself but also the family dynamics within the firm. To be resilient, addressing and managing both aspects is crucial.

Resilience in this context refers to the ability of family firms to adapt, recover, and thrive in the face of adversity. The authors emphasise that resilience involves navigating and responding to multiple events that may arise from various sources, including the external environment, the business operations, or the internal family dynamics. This complexity adds to the challenges and demands of family firms to be resilient. The study adopts a qualitative approach, employing case studies of German and Swedish family firms to gain deeper insights into this topic. By examining real-life examples, the authors seek to provide empirical evidence and a nuanced understanding of how family firms experience and cope with crises.

The findings of this research have significant relevance for multiple stakeholders. Firstly, family business owners and leaders can benefit from insights into the challenges they may face during crises and the strategies they can employ to enhance resilience. Understanding the interplay between family and business dynamics is crucial for effective crisis management.

Additionally, policymakers and advisors working with family firms can gain valuable knowledge from this study. By recognizing the unique challenges these firms face during crises, they can develop targeted support mechanisms and resources to assist them in building resilience.

Overall, this research sheds light on the complex nature of crisis resilience in family firms and contributes to the existing body of knowledge in this field. It provides practical implications and recommendations for family firms, policymakers, and advisors, ultimately aiming to enhance the long-term sustainability and success of family businesses in the face of adversity.

Appendix: Interview Questions

Dimensions	Questions
Crisis management	Detection phase:
	Did you experience any crisis in the past? What happened?
	When and how did you detect the crisis?
	What were the first warning signs of the crisis; how did they appear?
	What specific contingency plans did your firm have to prevent the crisis or minimise the negative impacts?
	Occurrence phase:
	How did the crisis affect you, your family, your business in general, the ownership of the firm?
	How are you handling the crises internally and externally (e.g. communication with internal and external stakeholders)?
	What were the major actions implemented?
	How did your firm respond to the crisis events?
	Did your firm find that crisis planning measures were actually useful in crisis events? If not, why not?
	What could have been better crisis managing measures in your opinion?
	Recovery phase:
	What were the major risks and challenges the company was facing during the recovery process?
	What were the major restructuring actions implemented?
	How long did it take to turn round your company?
	During the course of the restructuring, how would you describe the company’s position in its field of business?
	After the crisis, what did your firm actually do to recover from the crisis or even convert the crisis into new development opportunities?
	Resolution phase:
	Once the firm recovered from the crisis event, did your firm make any modification in their product, process, market position, or even business paradigm to prevent a similar crisis in the future?
	What have you learned from the crisis, e.g. with regard to ownership and family issues?
	What specific contingency plans does your firm have to prevent the crisis or minimize the negative impacts?
	What is the future outlook about the possible crisis events for your firm and the industry as a whole?
Entrepreneurial orientation	Innovativeness
	5 questions
	Proactiveness
	5 questions
	Risk-taking
	4 questions
Contingency factors	Firm size:
	Fewer than 10 employees	150–250 employees
	10–50 employees	250–500 employees
	50–150 employees	More than 500 employees
	Educational background:
	(a) No formal education.
	(b) Non-university.
	(c) University degree.
	Family generations involved:
	(a) How many family members are involved in the managing board of the firm?
	(b) How many family members are involved in the supervisory board or other monitoring boards?
	Gender
	(a) Male
	(b) Female
	Company age
	Industry sector
	(a) Low-technology firms.
	(b) High-technology firms.
	Uncertainty in the business environment
	What is your view concerning the predictability of the following changes in your business environment (multiple selection allowed)?
	(a) Buying patterns of customers.
	(b) Technological development in your business’ primary industry.
	(c) Competitors.
	(d) Change in government’s regulations.
	(e) Obtaining resources (labour, raw materials).