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Surviving the coronavirus pandemic and beyond: Unlocking family firms’ innovation potential across crises

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  • Leppäaho, Tanja
  • Ritala, Paavo

Abstract

In this research note, we examine Finnboat, a traditional Finnish family firm, from the interrelated perspectives of crisis behavior and innovation. The firm under study has endured three major crises: the economic recession of the 1990s, the 2008–2009 financial crisis, and the coronavirus pandemic. Our study shows that Finnboat has undertaken only very modest, if any, innovations during stable periods but has conducted a series of radical business-model and technology innovations, triggered by the different crises. This finding implies that during crises, a risk-averse family firm can productively engage into risk-taking and innovative behavior, effectively engaging in a “preference reversal.” We also find evidence of a deliberate accumulation of slack resources during periods of calm, which are mobilized to back up innovation and renewal efforts when a crisis hits. Our findings highlight family firms’ potential to endure crises by adopting a temporal separation logic to the risk-aversion vs. risk-taking paradox, and relatedly, by strategically managing the resource portfolio. Based on the case study, we suggest several research directions, approaches, and methodologies for studying family firm behavior and change during and in-between crises.

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  • Leppäaho, Tanja & Ritala, Paavo, 2022. "Surviving the coronavirus pandemic and beyond: Unlocking family firms’ innovation potential across crises," Journal of Family Business Strategy, Elsevier, vol. 13(1).
  • Handle: RePEc:eee:fambus:v:13:y:2022:i:1:s1877858521000218
    DOI: 10.1016/j.jfbs.2021.100440
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    2. Jaufenthaler, Philipp, 2023. "A safe haven in times of crisis: The appeal of family companies as employers amid the COVID-19 pandemic," Journal of Family Business Strategy, Elsevier, vol. 14(1).
    3. Bürgel, Tobias R. & Hiebl, Martin R.W. & Pielsticker, David I., 2023. "Digitalization and entrepreneurial firms' resilience to pandemic crises: Evidence from COVID-19 and the German Mittelstand," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).
    4. Jean-Luc Arrègle & Andrea Calabrò & Michael A. Hitt & Liena Kano & Christian Schwens, 2024. "Family business and international business : Breaking silos and establishing a rigorous way forward," Post-Print hal-04514340, HAL.
    5. Julia Riepl & Christine Mitter & Michael Kuttner, 2024. "Risk management during the COVID-19 crisis: insights from an exploratory case study of medium-sized family businesses," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 35(1), pages 109-135, March.
    6. Donard Games & Dessy Kurnia Sari, 2023. "Role of Female Successors in Family Business Innovation: Some Insights From the Largest Matrilineal Muslim Society," SAGE Open, , vol. 13(4), pages 21582440231, November.
    7. Block, Joern & Ulrich, Lennart, 2023. "Are family owners and managers good stewards in global crises? Evidence from stock market reactions to Covid-19," Journal of Family Business Strategy, Elsevier, vol. 14(1).
    8. Lambrechts, Frank & Gnan, Luca, 2022. "Human resources and mutual gains in family firms: New developments and possibilities on the horizon," Journal of Family Business Strategy, Elsevier, vol. 13(2).
    9. Haider, Zulfiquer & Wang, Yefeng & Wang, Yuan, 2024. "Family firm, financial constraint, and environmental preparedness: An international study," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 92(C).
    10. Sulu Zhu & Pengqun Gao & Zhen Tang & Ming Tian, 2022. "The Research Venation Analysis and Future Prospects of Organizational Slack," Sustainability, MDPI, vol. 14(19), pages 1-23, October.
    11. Arregle, Jean-Luc & Calabrò, Andrea & Hitt, Michael A. & Kano, Liena & Schwens, Christian, 2024. "Family business and international business: Breaking silos and establishing a rigorous way forward," Journal of World Business, Elsevier, vol. 59(3).
    12. Alexander Brem & Petra A. Nylund & Saeed Roshani, 2024. "Unpacking the complexities of crisis innovation: a comprehensive review of ecosystem-level responses to exogenous shocks," Review of Managerial Science, Springer, vol. 18(8), pages 2441-2464, August.
    13. Vasi, Melissa & Sansone, Giuliano & English, Vincent, 2024. "Exogenous crises and SMEs resilience: The Dynamic Open Innovation Funnel," Technovation, Elsevier, vol. 129(C).
    14. Anna Maria Bornhausen & Torsten Wulf, 2024. "Digital innovation in family firms: The roles of non-family managers and transgenerational control intentions," Small Business Economics, Springer, vol. 62(4), pages 1429-1448, April.
    15. Hanna Mizgajska & Lukasz Wsciubiak, 2022. "Institutional Support for Innovation: National versus Local Level: Insights from Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 3), pages 199-209.

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