In Focus Risk
‘COVID-19 has caused a drastic culture change’
Counter intuitively, the pandemic may have had some positive affects in bringing family firms closer together
Sascha Kraus Professor of entrepreneurship, Durham University Business School
The impact of COVID-19 has forced a drastic positive culture change in family firms, creating stronger solidarity and cohesion within the company and causing increased digitalisation, according to our new research. Their study is based on 27 interviews with
owners and managers of family firms in five European countries: Austria, Germany, Italy, Liechtenstein, and Switzerland. The firms varied in size and industry, and were all working through crisis management plans caused by the pandemic.
Increased solidarity The researchers found that every single firms’ chief executive and managers noted an increase in solidarity between employees. This was showcased through examples
such as firms putting employees’ interests at the heart of all decisions, increased motivation, teamwork, and team spirit and increasingly the notion of everyone in the firm tackling the crisis together. Over half of firms’ chief executives and
managers stated an increased digitalisation in their working practices. Many firms stated they already had
capability and plans to further digitalise, however the impact of COVID-19 sped up this process and persuaded more reluctant employees to use digital tools.
Severe limitations Within a very short period of time, the worldwide pandemic triggered by the coronavirus has caused severe limitations
August 2020
to daily private life as well as business life. The COVID-19 crisis represents a new type of challenge for companies, and family firms have had to drastically adapt to this, which has brought around a huge change in the culture of these typically traditional organisations.
Crisis management The researchers also reviewed these firms’ crisis management strategies in adapting to and tackling the impact of COVID-19 on their firms’ survival. They found that coping mechanisms used
by firms differed due to industry and size – with a mix of strategies used, including simply surviving the crisis, persevering and looking to innovate, and cutting costs while looking to innovate. These adjustments have both short-term
and long-term consequences and were usually made for two reasons. The first reason is safeguarding liquidity
in the crisis. The second reason is to improve the long-term survival and viability of the company.”
Empirical study This is the first empirical study on the effects of the COVID-19 crisis on family firms, and allows initial conclusions to be drawn about family firm crisis management. The research clearly shows the various
techniques family firms have specifically employed to ensure they safeguard liquidity and ensure their survival, and how these changes have brought about a drastic positive change in company culture. CCR
www.CCRMagazine.com 39
The research clearly shows the various techniques family firms have specifically employed to ensure they safeguard liquidity and ensure their survival, and how these changes have brought about a drastic positive change in company culture
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