Family Businesses during the COVID-19 Crisis – Evidence from Poland

Robert Zajkowski, Beata Żukowska

Abstract


Theoretical background: Family businesses are a specific group of enterprises in which family bonds play a vital role in determining the economic and noneconomic goals of the business. The subject literature emphasises the long-term focus of family businesses which is on continuity, futurity and perseverance. During the COVID-19 crisis, unique family business traits can allow these entities to access useful resources and take positive actions such as forging strong networking relationships, tapping into local idiosyncratic knowledge, exercising rapid response, having flexibility and exercising trust with caution. This suggests that family businesses might also react to the COVID-19 crisis in their own distinctive ways using their unique attributes.

Purpose of the article: In this paper we will show how family businesses deal with coronavirus restrictions and what measures they undertook during this challenging period. The paper is organised around four research questions.

Research methods: This research was conducted using a sample of 167 family businesses. Primary data related to reactions of family businesses facing the COVID-19 crisis were collected in April and at the beginning of May 2020. To achieve the goals of this study, we carried out such research methods and procedures as fractal analyses, descriptive statistics, statistical comparison of means and subjective classification of the factors.

Main findings: For family businesses, a sudden fall in revenue was a common result of COVID-19 restrictions in the Polish economy. In the case of the majority of surveyed family firms, revenues fell by 44%, and in the next 2 to 3 months businesses expected additional decreases of 39.8%. More than 65% declared a stable level of employment, but more than a quarter of surveyed family fims showed an average dip in fim employment of 15.7% and expected further job losses at around 13.1%. To protect businesses against the negative effects of the pandemic, surveyed family fims undertook several ad hoc measures. We divided the analysed reactions to COVID into three groups: proactive, neutral and progressive. We noticed that the most common measures were those marked as “neutral”, or those which neither expanded nor retrenched the business in the short term. This observation suggests that family businesses might choose “persevering” as their first strategic response to the sudden crisis. We also found that “proactive” measures were undertaken in family businesses which evaluated their probability of survival as higher than businesses that indicated “neutral” or “defensive” reactions. In addition, we isolated statistically significant differences in family fims’ average probability of survival among the firms which introduced particular neutral and defensive measures and those which did not. On this basis we can conclude that the lower the perceived probability of survival is, the more retrenchment-oriented types of measures begin to be taken. Additionally, it should be mentioned that so-called anti-crisis shields implemented by the Polish government were assessed as inadequately supportive of business entities’ survival.


Keywords


family businesses; COVID-19 crisis; ad hoc solutions; crisis management; Anti-Crisis Shield

Full Text:

PDF

References


Arregle, J.L., Hitt, M.A., Sirmon, D.G., & Very, P. (2007). The development of organizational social capital: Attributes of family firms. Journal of Management Studies, 44(1), 73–95. doi:10.1111/j.1467-6486.2007.00665.x

Basco, R. (2017). “Where do you want to take your family firm?” A theoretical and empirical exploratory study of family business goals. Cuadernos de Economía y Dirección de La Empresa, 20(1), 28–44. doi:10.1016/j.brq.2016.07.001

Bauweraerts, J. (2013). How Do Private Family Firms Face the Crisis? Empirical Evidence from Belgium. International Business Research, 6(8). doi:10.5539/ibr.v6n8p91

Berrone, P., Cruz, C., & Gomez-Mejia, L.R. (2012). Socioemotional Wealth in Family Firms: Theoretical Dimensions, Assessment Approaches, and Agenda for Future Research. Family Business Review, 25(3), 258–279. https://doi.org/10.1177/0894486511435355

Brigham, K.H., Lumpkin, G.T., Payne, G.T., & Zachary, M.A. (2014). Researching Long-Term Orientation: A Validation Study and Recommendations for Future Research. Family Business Review, 27(1), 72–88. doi:10.1177/0894486513508980

Cater, J.J., & Justis, R.T. (2009). The Development of Successors From Followers to Leaders in Small Family Firms: An Exploratory Study. Family Business Review, 22(2), 109–124. doi:10.1177/0894486508327822

Cater, J., & Beal, B. (2014). Ripple effects on family firms from an externally induced crisis. Journal of Family Business Management, 4(1), 62–78. doi:10.1108/JFBM-02-2013-0006

Chrisman, J.J., Chua, J.H., Pearson, A.W., & Barnett, T. (2012). Family Involvement, Family Influence, and Family-Centered Non-Economic Goals in Small Firms. Entrepreneurship: Theory and Practice, 36(2), 267–293. doi:10.1111/j.1540-6520.2010.00407.x

European Commission, (2009, November). Final Report of the Expert Group Overview of Family – Business – Relevant Issues. Challenges, 1–33.

Floren, R., Berent-Braun, M., & Bles-Temme, L. (2020). Family businesses and the corona crisis (Covid-19). doi:10.13140/RG.2.2.24894.64324

Forbes. (2020). Koronawirus w Polsce. Jak COVID-19 uderza w firmy. Retrieved from https://www.forbes.pl/gospodarka/koronawirus-w-polsce-jak-covid-19-uderza-w-firmy-badanie/k49g81q

Frishkoff, P.A. (1995). Understanding Family Business: What is a family business. Oregon State University, Austin Family Business Program, 15(19).

Habbershon, T.G., & Williams, M.L. (1999). A resource-based framework for assessing the strategic advantages of family firms. Family Business Review, 12(1), 1–25. doi:10.1111/j.1741-6248.1999.00001.x

Kraus, S., Clauss, T., Breier, M., Gast, J., Zardini, A., & Tiberius, V. (2020). The economics of COVID-19: initial empirical evidence on how family firms in five European countries cope with the corona crisis. International Journal of Entrepreneurial Behaviour and Research. doi:10.1108/IJEBR-04-2020-0214

Kukuła, K. (1999). Metoda unitaryzacji zerowanej na tle wybranych metod normowania cech diagnostycznych. Acta Scientifica Academiae Ostroviensis, 4, 5–31.

Lee, J. (2006). Family firm performance: Further evidence. Family Business Review, 19(2), 103–114.

Lins, K.V, Volpin, P., & Wagner, H.F. (2013). Does family control matter? International evidence from the 2008-2009 financial crisis. Review of Financial Studies, 26(10), 2583–2619. doi:10.1093/rfs/hht044

Miller, D., & Le Breton-Miller, I. (2006). Family Governance and Firm Performance: Agency, Stewardship, and Capabilities. Family Business Review, 19(1), 73–87. doi:10.1111/j.1741-6248.2006.00063.x

Minichilli, A., Brogi, M., & Calabrò, A. (2015). Weathering the storm: Family ownership, governance, and performance through the financial and economic crisis. Corporate Governance: An International Review, 24(6). doi:10.1111/corg.12125

Neckebrouck, J., Schulze, W., & Zellweger, T. (2018). Are family firms good employers? Academy of Management Journal, 61(2), 553–585.

PWC. (2020). Polski mikro, mały i średni biznes w obliczu pandemii COVID 19. Przychody, płynność i reakcja na wstrząs. Retrieved from https://www.pwc.pl/pl/pdf/polski-mikro-maly-sredni-biznes-w-obliczu-pandemii.pdf

Siakas, K., Naaranoja, M., Vlachakis, S., & Siakas, E. (2014). Family Businesses in the New Economy: How to Survive and Develop in Times of Financial Crisis. Procedia Economics and Finance, 9(14), 331–341. doi:10.1016/s2212-5671(14)00034-3

Sirmon, D.G., & Hitt, M.A. (2003). Managing Resources: Linking Unique Resources, Management, and Wealth Creation in Family Firms. Entrepreneurship: Theory and Practice, 27(4), 339–359.

Songini, L. (2006). The professionalization of family firms: theory and practice. In Handbook of research on family business. In P. Poutziouris, K. Smyrnios, S. Klein (eds.), Handbook of Research on Family Business (pp. 269–297). Northampton: Edward Elgar Publishing.

Ustawa o zmianie ustawy o szczególnych rozwiązaniach związanych z zapobieganiem, przeciwdziałaniem i zwalczaniem COVID-19, innych chorób zakaźnych oraz wywołanych nimi sytuacji kryzysowych oraz niektórych innych ustaw (Dz.U. 2020 poz. 568).

Ustawa o szczególnych instrumentach wsparcia w związku z rozprzestrzenianiem się wirusa SARS-CoV-2 (Dz.U. 2020, poz. 695).

Ustawa o zmianie niektórych ustaw w zakresie działań osłonowych w związku z rozprzestrzenianiem się wirusa SARS-CoV-2 (Dz.U. 2020 poz. 875).

Ustawa o dopłatach do oprocentowania kredytów bankowych udzielanych przedsiębiorcom dotkniętym skutkami COVID-19 oraz o uproszczonym postępowaniu o zatwierdzenie układu w związku z wystąpieniem COVID-19 (Dz.U. 2020 poz. 1086).

Wenzel, M., Stanske, S., & Lieberman, M.B. (2020, April). Strategic responses to crisis. Strategic Management Journal, 7–18. doi:10.1002/smj.3161

Węcławski, J., & Żukowska, B. (2019). Refreshing Typologies Based on Family Firms’ Goals: The Perspective of “First-Generation Enterprises.” Central European Management Journal, 27(3), 128–146. doi:10.7206/cemj.2658-0845.6

Zajkowski, R., & Życzyński, N. (2014). Percepcja a rzeczywiste wyróżniki przedsiębiorstw rodzinnych. Economics and Management, 6(3), 236–247. doi:10.12846/j.em.2014.03.16

www.300gospodarka.pl/live/koronawirus-nowe-ograniczenia-w-polsce

www.dziennikustaw.gov.pl/

www.gov.pl

www.pfr.pl/tarcza.html

www.pracodawcyrp.pl/tarcza-antykryzysowa




DOI: http://dx.doi.org/10.17951/h.2020.54.3.101-116
Date of publication: 2020-12-01 08:38:10
Date of submission: 2020-08-05 13:45:33


Statistics


Total abstract view - 1990
Downloads (from 2020-06-17) - PDF - 0

Indicators



Refbacks

  • There are currently no refbacks.


Copyright (c) 2020 Robert Zajkowski, Beata Żukowska

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.