How Family Firms In Indonesia Re-Initiate Strategies During Covid 19 Pandemies : Empirical Initial Evidence From 5 Provinces In Java Island
Article Sidebar
COVID-19,
Crisis management,
Family firms,
Strategic management,
, Business model adaptation
Main Article Content
Abstract
Purpose – Within a very short period of time, the worldwide pandemic triggered by the novel coronavirus has not only claimed numerous lives but also caused severe limitations to daily private as well as business life. Just about every company has been affected in one way or another. This first empirical study on the
effects of the COVID-19 crisis on family firms allows initial conclusions to be drawn about family firm crisis management.
Design/methodology/approach - Exploratory qualitative research design based on 27 semi-structured interviews with key informants of family firms of all sizes in five Western European countries that are in different stages of the crisis.
Findings – The COVID-19 crisis represents a new type and quality of challenge for companies. These companies are applying measures that can be assigned to three different strategies to adapt to the crisis in the short term and emerge from it stronger in the long run. Our findings show how companies in all industries and of all sizes adapt their business models to changing environmental conditions within a short period of time.
Finally, the findings also show that the crisis is bringing about a significant yet unintended cultural change. On the one hand, a stronger solidarity and cohesion within the company was observed, while on the other hand, the crisis has led to a tentative digitalization.
Originality/value – To the knowledge of the authors, this is the first empirical study in the management realm on the impacts of COVID-19 on (family) firms. It provides cross-national evidence of family firms’ current reactions to the crisis.
Article Details
References
Amann, B. and Jaussaud, J. (2012), “Family and non-family business resilience in an economic downturn”, Asia Pacific Business Review, Vol. 18 No. 2, pp. 203-223.
Anderson, R.M., Heesterbeek, H., Klinkenberg, D. and Hollingsworth, T.D. (2020), “How will country- based mitigation measures influence the course of the COVID-19 epidemic?”, The Lancet, Vol. 395 No. 10228, pp. 931-934.
Archibugi, D., Filippetti, A. and Frenz, M. (2013), “Economic crisis and innovation: is destruction prevailing over accumulation?”, Research Policy, Vol. 42 No. 2, pp. 303-314.
Aronoff, C.E. and Ward, J.L. (1995), “Family-owned businesses: a thing of the past or a model for the future?”, Family Business Review, Vol. 8 No. 2, pp. 121-130.
Arrondo-Garc´ıa, R., Fern´andez-M´endez, C. and Men´endez-Requejo, S. (2016), “The growth and performance of family businesses during the global financial crisis: the role of the generation in control”, Journal of Family Business Strategy, Vol. 7 No. 4, pp. 227-237.
Baekkeskov, E. and Rubin, O. (2014), “Why pandemic response is unique: powerful experts and hands-off political leaders”, Disaster Prevention and Management, Vol. 23 No. 1, pp. 81-93.
Baker, S., Bloom, N., Davis, S.J., Kost, K., Sammon, M. and Viratyosin, T. (2020), “The unprecedented stock market reaction to COVID-19”, Covid Economics: Vetted and Real-Time Papers, Vol. 1 No. 3.
Baldwin, R. and Weder di Mauro, B. (2020), “Introduction”, in Baldwin, R. and Weder di Mauro, B. (Eds), Economics in the Time of COVID-19, CEPR, London.
Bansal, P. and Corley, K. (2012), Publishing in AMJ—Part 7: What’s Different about Qualitative Research?, American Society of Nephrology, Briarcliff Manor, NY.
Barker, V.L. and Duhaime, I.M. (1997), “Strategic change in the turnaround process: theory and empirical evidence”, Strategic Management Journal, Vol. 18 No. 1, pp. 13-38.
Baron, S., Harris, K. and Elliott, D. (2005), “Crisis management and services marketing”, Journal of Services Marketing, Vol. 19 No. 5, pp. 336-345.
Bauweraerts, J. (2013), “How do private family firms face the crisis? Empirical evidence from Belgium”, International Business Research, Vol. 6 No. 8, p. 91.
Benner, M.J. and Zenger, T. (2016), “The lemons problem in markets for strategy”, Strategy Science, Vol. 1 No. 2, pp. 71-89.
Berrone, P., Cruz, C. and Gomez-Mejia, L.R. (2012), “Socioemotional wealth in family firms: theoretical dimensions, assessment approaches, and agenda for future research”, Family Business Review, Vol. 25 No. 3, pp. 258-279.
Betts, P. (2001), “Family companies are ready for the worst”, Financial Times, Vol. 30 No. 2001, pp. 18-19.
Bluhm, D.J., Harman, W., Lee, T.W. and Mitchell, T.R. (2011), “Qualitative research in management: a decade of progress”, Journal of Management Studies, Vol. 48 No. 8, pp. 1866-1891.
Boddy, C.R. (2016), “Sample size for qualitative research”, Qualitative Market Research: An International Journal, Vol. 19 No. 4, pp. 426-432.
Bootsma, M.C. and Ferguson, N.M. (2007), “The effect of public health measures on the 1918 influenza pandemic in US cities”, Proceedings of the National Academy of Sciences, Vol. 104 No. 18, pp. 7588-7593.
Brand, M., Tiberius, V., Bican, P.M. and Brem, A. (2019), “Agility as an innovation driver: towards an agile front end of innovation framework”, Review of Managerial Science, doi: 10.1007/s11846- 019-00373-0.
Brockner, J. and James, E.H. (2008), “Toward an understanding of when executives see crisis as opportunity”, The Journal of Applied Behavioral Science, Vol. 44 No. 1, pp. 94-115.
Bundy, J., Pfarrer, M.D., Short, C.E. and Coombs, W.T. (2017), “Crises and crisis management: integration, interpretation, and research development”, Journal of Management, Vol. 43 No. 6, pp. 1661-1692.
Cahyanto, I., Wiblishauser, M., Pennington-Gray, L. and Schroeder, A. (2016), “The dynamics of travel avoidance: the case of Ebola in the US”, Tourism Management Perspectives, Vol. 20, pp. 195-203.
Carnahan, S. (2017), “Blocked but not tackled: who founds new firms when rivals dissolve?”, Strategic Management Journal, Vol. 38 No. 11, pp. 2189-2212.
Carney, M. (2005), “Corporate governance and competitive advantage in family-controlled firms”,
Entrepreneurship: Theory and Practice, Vol. 29 No. 3, pp. 249-265.
Casadesus-Masanell, R. and Ricart, J.E. (2010), “From strategy to business models and onto tactics”, Long Range Planning, Vol. 43 Nos 2-3, pp. 195-215.
Cater, J. and Schwab, A. (2008), “Turnaround strategies in established small family firms”, Family Business Review, Vol. 21 No. 1, pp. 31-50.
Chan, J.F.-W., Yuan, S., Kok, K.-H., To, K.K.-W., Chu, H., Yang, J., Xing, F., Liu, J., Yip, C.C.-Y. and Poon, R.W.-S. (2020), “A familial cluster of pneumonia associated with the 2019 novel coronavirus indicating person-to-person transmission: a study of a family cluster”, The Lancet, Vol. 395 No. 10223, pp. 514-523.
Chesbrough, H. (2020), “To recover faster from Covid-19, open up: managerial implications from an open innovation perspective”, Industrial Marketing Management, doi: 10.1016/j.indmarman. 2020.04.010.
Chrisman, J.J., Chua, J.H. and Sharma, P. (2005), “Trends and directions in the development of a strategic management theory of the family firm”, Entrepreneurship: Theory and Practice, Vol. 29 No. 5, pp. 555-575.
Clauss, T. (2017), “Measuring business model innovation: conceptualization, scale development, and proof of performance”, R&D Management, Vol. 47 No. 3, pp. 385-403.
Clauss, T., Abebe, M., Tangpong, C. and Hock, M. (2019), “Strategic agility, business model innovation, and firm performance: an empirical investigation”, IEEE Transactions on Engineering Management, doi: 10.1109/TEM.2019.2910381.
Cohen, M.L. (2000), “Changing patterns of infectious disease”, Nature, Vol. 406 No. 6797, pp. 762-767.
Coombs, W.T. (2007), “Protecting organization reputations during a crisis: the development and application of situational crisis communication theory”, Corporate Reputation Review, Vol. 10 No. 3, pp. 163-176.
Corbin, J. and Strauss, A. (2014), Basics of Qualitative Research: Techniques and Procedures for Developing Grounded Theory, Sage Publications, Thousand Oaks, CA.
D’Aveni, R.A. and MacMillan, I.C. (1990), “Crisis and the content of managerial communications: a study of the focus of attention of top managers in surviving and failing firms”, Administrative Science Quarterly, Vol. 35 No. 4, pp. 634-657.
Dane, E. and Pratt, M.G. (2007), “Exploring intuition and its role in managerial decision making”,
Academy of Management Review, Vol. 32 No. 1, pp. 33-54.
De Massis, A., Kotlar, J., Campopiano, G. and Cassia, L. (2013), “Dispersion of family ownership and the performance of small-to-medium size private family firms”, Journal of Family Business Strategy, Vol. 4 No. 3, pp. 166-175.
de Vries, M.F.K. (1993), “The dynamics of family controlled firms: the good and the bad news”,
Organizational Dynamics, Vol. 21 No. 3, pp. 59-71.
del Rio-Chanona, R.M., Mealy, P., Pichler, A., Lafond, F. and Farmer, D. (2020), “Supply and demand shocks in the COVID-19 pandemic: an industry and occupation perspective”, arXiv preprint arXiv:2004.06759.
Denis, J.-L., Lamothe, L. and Langley, A. (2001), “The dynamics of collective leadership and strategic change in pluralistic organizations”, Academy of Management Journal, Vol. 44 No. 4, pp. 809-837.
Gioia, D.A., Corley, K.G. and Hamilton, A.L. (2013), “Seeking qualitative rigor in inductive research: notes on the Gioia methodology”, Organizational Research Methods, Vol. 16 No. 1, pp. 15-31.
G´omez-Mej´ıa, L.R., Haynes, K.T., Nu´n~ez-Nickel, M., Jacobson, K.J. and Moyano-Fuentes, J. (2007), “Socioemotional wealth and business risks in family-controlled firms: evidence from Spanish olive oil mills”, Administrative Science Quarterly, Vol. 52 No. 1, pp. 106-137.
Gomez-Mejia, L.R., Cruz, C., Berrone, P. and De Castro, J. (2011), “The bind that ties: socioemotional wealth preservation in family firms”, Academy of Management Annals, Vol. 5 No. 1, pp. 653-707.
Graebner, M.E., Martin, J.A. and Roundy, P.T. (2012), “Qualitative data: cooking without a recipe”, Strategic Organization, Vol. 10 No. 3, pp. 276-284.
Greiner, L.E. (1989), Evolution and Revolution as Organizations Grow, Readings in Strategic Management, Springer, Heidelberg.
Guest, G., Bunce, A. and Johnson, L. (2006), “How many interviews are enough? An experiment with data saturation and variability”, Field Methods, Vol. 18 No. 1, pp. 59-82.
Hale, J.E., Dulek, R.E. and Hale, D.P. (2005), “Crisis response communication challenges: building theory from qualitative data”, The Journal of Business Communication, (1973), Vol. 42 No. 2, pp. 112-134.
Harvey, S. and Haines, V.Y. ii (2005), “Employer treatment of employees during a community crisis: the role of procedural and distributive justice”, Journal of Business and Psychology, Vol. 20 No. 1, pp. 53-68.
Heath, R. (1995), “The Kobe earthquake: some realities of strategic management of crises and disasters”, Disaster Prevention and Management: An International Journal, Vol. 4 No. 5, pp. 11-24.
Herbane, B. (2013), “Exploring crisis management in UK small-and medium-sized enterprises”, Journal of Contingencies and Crisis Management, Vol. 21 No. 2, pp. 82-95.
Hills, A. (1998), “Seduced by recovery: the consequences of misunderstanding disaster”, Journal of Contingencies and Crisis Management, Vol. 6 No. 3, pp. 162-170.
Huang, C., Wang, Y., Li, X., Ren, L., Zhao, J., Hu, Y., Zhang, L., Fan, G., Xu, J. and Gu, X. (2020), “Clinical features of patients infected with 2019 novel coronavirus in Wuhan, China”, The Lancet, Vol. 395 No. 10223, pp. 497-506.
Jacobides, M.G. (2005), “Industry change through vertical disintegration: how and why markets emerged in mortgage banking”, Academy of Management Journal, Vol. 48 No. 3, pp. 465-498.
James, E.H. and Wooten, L.P. (2005), “Leadership as (Un) usual:: how to display competence in times of crisis”, Organizational Dynamics, Vol. 34 No. 2, pp. 141-152.
Kim, Y. and Vonortas, N.S. (2014), “Cooperation in the formative years: evidence from small enterprises in Indonesia”, Indonesiaan Management Journal, Vol. 32 No. 5, pp. 795-805.
Kirk, J., Miller, M.L. and Miller, M.L. (1986), Reliability and Validity in Qualitative Research, Sage, Thousand Oaks, CA.
Kraus, S., Moog, P., Schlepphorst, S. and Raich, M. (2013), “Crisis and turnaround management in SMEs: a qualitative-empirical investigation of 30 companies”, International Journal of Entrepreneurial Venturing, Vol. 5 No. 4, pp. 406-430.
Kvale, S. (1983), “The qualitative research interview: a phenomenological and a hermeneutical mode of understanding”, Journal of Phenomenological Psychology, Vol. 14 No. 2, p. 171.
Lampel, J., Shamsie, J. and Shapira, Z. (2009), “Experiencing the improbable: rare events and organizational learning”, Organization Science, Vol. 20 No. 5, pp. 835-845.
Last, J.M., Harris, S.S., Thuriaux, M.C. and Spasoff, R.A. (2001), A Dictionary of Epidemiology, Oxford University Press, New York.
Lau, K., Hauck, K. and Miraldo, M. (2019), “Excess influenza hospital admissions and costs due to the 2009 H1N1 pandemic in England”, Health Economics, Vol. 28 No. 2, pp. 175-188.
Lechner, C., Dowling, M. and Welpe, I. (2006), “Firm networks and firm development: the role of the relational mix”, Journal of Business Venturing, Vol. 21 No. 4, pp. 514-540.
Lee, J. (2006), “Family firm performance: further evidence”, Family Business Review, Vol. 19 No. 2, pp. 103-114.
Lee, T.W., Mitchell, T.R. and Sablynski, C.J. (1999), “Qualitative research in organizational and vocational psychology, 1979–1999”, Journal of Vocational Behavior, Vol. 55 No. 2, pp. 161-187.
Lee, C.-K., Song, H.-J., Bendle, L.J., Kim, M.-J. and Han, H. (2012), “The impact of non-pharmaceutical interventions for 2009 H1N1 influenza on travel intentions: a model of goal-directed behavior”, Tourism Management, Vol. 33 No. 1, pp. 89-99.
Lins, K.V., Volpin, P. and Wagner, H.F. (2013), “Does family control matter? International evidence from the 2008–2009 financial crisis”, The Review of Financial Studies, Vol. 26 No. 10, pp. 2583-2619.
WHO (2020e), “Novel coronavirus (2019-nCoV) SITUATION REPORT – 63”, Nover Coronavirus: World Health Organisation, World Health Organization, Geneva.
Witte, E. (1981), Die Unternehmenskrise–Anfang Vom Ende Oder Neubeginn, Unternehmenskrisen– Ursachen, Fru€herkennung, Bew€altigung, Poeschel, Stuttgart, pp. 7-24.
Xi, J.M., Kraus, S., Kellermanns, F. and Filser, M. (2015), “Mapping the field of family business research: past trends and future directions”, International Entrepreneurship and Management Journal, Vol. 11 No. 1, pp. 113-132.
Yin, R.K. (2013), “Validity and generalization in future case study evaluations”, Evaluation, Vol. 19 No. 3, pp. 321-332.
Yin, R.K. (2017), Case Study Research and Applications: Design and Methods, Sage Publications, Thousand Oaks, CA.
Zhu, N., Zhang, D., Wang, W., Li, X., Yang, B., Song, J., Zhao, X., Huang, B., Shi, W. and Lu, R. (2020), “A novel coronavirus from patients with pneumonia in China, 2019”, New England Journal of Medicine, doi: 10.1056/NEJMoa2001017.