IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v156y2023ics0148296322009511.html
   My bibliography  Save this article

Managerial capabilities and strategic renewal in family firms in crisis situations: The moderating role of the founding generation

Author

Listed:
  • Issah, Wunnam Basit
  • Anwar, Muhammad
  • Clauss, Thomas
  • Kraus, Sascha

Abstract

This study examines whether founding generation managed family firms are capable of responding proactively to the COVID-19 disruption via firm renewal. We used a unique global COVID-19 crisis specific survey dataset comprising of 2,130 family firm observations. Our findings indicate that in comparison to the later generations, founding generation-managed family firms only do better at strategic renewal as a response to the crisis when they have sufficient managerial capabilities. Our study recommends that family businesses, especially those managed by the founding generations should emphasize managerial capabilities rather than merely focusing on socioemotional wealth (SEW) when deciding on crisis coping strategies.

Suggested Citation

  • Issah, Wunnam Basit & Anwar, Muhammad & Clauss, Thomas & Kraus, Sascha, 2023. "Managerial capabilities and strategic renewal in family firms in crisis situations: The moderating role of the founding generation," Journal of Business Research, Elsevier, vol. 156(C).
    • Handle: RePEc:eee:jbrese:v:156:y:2023:i:c:s0148296322009511
    DOI: 10.1016/j.jbusres.2022.113486
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296322009511
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2022.113486?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Katrin Hussinger & Wunnam Basit Issah, 2022. "Trade Secret Protection and R&D Investment of Family Firms," DEM Discussion Paper Series 22-11, Department of Economics at the University of Luxembourg.
    2. Zhou, Haoyong & He, Fan & Wang, Yangbo, 2017. "Did family firms perform better during the financial crisis? New insights from the S&P 500 firms," Global Finance Journal, Elsevier, vol. 33(C), pages 88-103.
    3. Anderson, Ronald C. & Mansi, Sattar A. & Reeb, David M., 2003. "Founding family ownership and the agency cost of debt," Journal of Financial Economics, Elsevier, vol. 68(2), pages 263-285, May.
    4. Hussinger, Katrin & Issah, Abdul-Basit, 2019. "Firm acquisitions by family firms: A mixed gamble approach," ZEW Discussion Papers 19-044, ZEW - Leibniz Centre for European Economic Research.
    5. Clougherty, Joseph A. & Duso, Tomaso & Muck, Johannes, 2016. "Correcting for Self-selection Based Endogeneity in Management Research: Review, Recommendations and Simulations," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 19, pages 286-347.
    6. John Antonakis & Samuel Bendahan & Philippe Jacquart & Rafael Lalive, 2010. "On making causal claims : A review and recommendations," Post-Print hal-02313119, HAL.
    7. Ng, Poh Yen & Dayan, Mumin & Di Benedetto, Anthony, 2019. "Performance in family firm: Influences of socioemotional wealth and managerial capabilities," Journal of Business Research, Elsevier, vol. 102(C), pages 178-190.
    8. Klyver, Kim & Nielsen, Suna Løwe, 2021. "Which crisis strategies are (expectedly) effective among SMEs during COVID-19?," Journal of Business Venturing Insights, Elsevier, vol. 16(C).
    9. Kimberly A. Eddleston & Robert F. Otondo & Franz Willi Kellermanns, 2008. "Conflict, Participative Decision‐Making, and Generational Ownership Dispersion: A Multilevel Analysis," Journal of Small Business Management, Taylor & Francis Journals, vol. 46(3), pages 456-484, July.
    10. Thomas Clauss & Patrick Spieth & Christian Klusmann & Wunnam Basit Issah & Tobias Kesting, 2022. "How industry projects can stimulate academic engagement: an experimental study among U.S. engineering professors," Industry and Innovation, Taylor & Francis Journals, vol. 29(1), pages 74-101, January.
    11. Amankwah-Amoah, Joseph & Khan, Zaheer & Osabutey, Ellis L.C., 2021. "COVID-19 and business renewal: Lessons and insights from the global airline industry," International Business Review, Elsevier, vol. 30(3).
    12. Alfredo De Massis & Shujun Ding & Josip Kotlar & Zhenyu Wu, 2018. "Family involvement and R&D expenses in the context of weak property rights protection: an examination of non-state-owned listed companies in China," The European Journal of Finance, Taylor & Francis Journals, vol. 24(16), pages 1506-1527, November.
    13. Muhammad Anwar, 2018. "BUSINESS MODEL INNOVATION AND SMEs PERFORMANCE — DOES COMPETITIVE ADVANTAGE MEDIATE?," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(07), pages 1-31, October.
    14. Cucculelli, Marco & Le Breton-Miller, Isabelle & Miller, Danny, 2016. "Product innovation, firm renewal and family governance," Journal of Family Business Strategy, Elsevier, vol. 7(2), pages 90-104.
    15. Abdul-Basit Issah, 2021. "A Post M&A Innovation in Family Firms," DEM Discussion Paper Series 21-18, Department of Economics at the University of Luxembourg.
    16. Ricarda B. Bouncken & Sascha Kraus & Antonio Lucas Ancillo, 2022. "Management in times of crises: reflections on characteristics, avoiding pitfalls, and pathways out," Review of Managerial Science, Springer, vol. 16(7), pages 2035-2046, October.
    17. Danny Miller & Isabelle Le Breton–Miller, 2014. "Deconstructing Socioemotional Wealth," Entrepreneurship Theory and Practice, , vol. 38(4), pages 713-720, July.
    18. Adrian Klammer & Stefan Gueldenberg & Sascha Kraus & Michele O’Dwyer, 2017. "To change or not to change–antecedents and outcomes of strategic renewal in SMEs," International Entrepreneurship and Management Journal, Springer, vol. 13(3), pages 739-756, September.
    19. Kumar, Sonal & Zbib, Leila, 2022. "Firm performance during the Covid-19 crisis: Does managerial ability matter?," Finance Research Letters, Elsevier, vol. 47(PB).
    20. Rondi, Emanuela & De Massis, Alfredo & Kotlar, Josip, 2019. "Unlocking innovation potential: A typology of family business innovation postures and the critical role of the family system," Journal of Family Business Strategy, Elsevier, vol. 10(4).
    21. Luis R. Gomez‐Mejia & Marianna Makri & Martin Larraza Kintana, 2010. "Diversification Decisions in Family‐Controlled Firms," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 223-252, March.
    22. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    23. Jess H. Chua & James J. Chrisman & Lloyd P. Steier & Sabine B. Rau, 2012. "Sources of Heterogeneity in Family Firms: An Introduction," Entrepreneurship Theory and Practice, , vol. 36(6), pages 1103-1113, November.
    24. Matthias Breier & Andreas Kallmuenzer & Thomas Clauss & Johanna Gast & Sascha Kraus & Victor Tiberius, 2021. "The role of business model innovation in the hospitality industry during the COVID-19 crisis," Post-Print hal-03514806, HAL.
    25. Brahim Herbane, 2019. "Rethinking organizational resilience and strategic renewal in SMEs," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 31(5-6), pages 476-495, May.
    26. Gary Gereffi, 2020. "What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 287-301, September.
    27. Kimberly A. Eddleston & Franz W. Kellermanns & Steven W. Floyd & Victoria L. Crittenden & William F. Crittenden, 2013. "Planning for Growth: Life Stage Differences in Family Firms," Entrepreneurship Theory and Practice, , vol. 37(5), pages 1177-1202, September.
    28. Calabrò, Andrea & Frank, Hermann & Minichilli, Alessandro & Suess-Reyes, Julia, 2021. "Business families in times of crises: The backbone of family firm resilience and continuity," Journal of Family Business Strategy, Elsevier, vol. 12(2).
    29. Karl V. Lins & Paolo Volpin & Hannes F. Wagner, 2013. "Does Family Control Matter? International Evidence from the 2008--2009 Financial Crisis," The Review of Financial Studies, Society for Financial Studies, vol. 26(10), pages 2583-2619.
    30. Sascha Kraus & Petra Moog & Susanne Schlepphorst & Margit Raich, 2013. "Crisis and turnaround management in SMEs: a qualitative-empirical investigation of 30 companies," International Journal of Entrepreneurial Venturing, Inderscience Enterprises Ltd, vol. 5(4), pages 406-430.
    31. Liena Kano & Chang Hoon Oh, 2020. "Global Value Chains in the Post‐COVID World: Governance for Reliability," Journal of Management Studies, Wiley Blackwell, vol. 57(8), pages 1773-1777, December.
    32. Block, Joern H., 2012. "R&D investments in family and founder firms: An agency perspective," Journal of Business Venturing, Elsevier, vol. 27(2), pages 248-265.
    33. Alfredo De Massis & Emanuela Rondi, 2020. "Covid‐19 and the Future of Family Business Research," Journal of Management Studies, Wiley Blackwell, vol. 57(8), pages 1727-1731, December.
    34. Franz W. Kellermanns & Kimberly A. Eddleston & Thomas M. Zellweger, 2012. "Article Commentary: Extending the Socioemotional Wealth Perspective: A Look at the Dark Side," Entrepreneurship Theory and Practice, , vol. 36(6), pages 1175-1182, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Inés Herrero & Cristina López & Rocío Ruiz‐Benítez, 2024. "So … are family firms more sustainable? On the economic, social and environmental sustainability of family SMEs," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4252-4270, July.
    2. Xu, Aiting & Zhu, Yuhan & Wang, Wenpu, 2023. "Micro green technology innovation effects of green finance pilot policy—From the perspectives of action points and green value," Journal of Business Research, Elsevier, vol. 159(C).
    3. Wunnam Basit Issah & Lutfa Tilat Ferdous & Faruk Bhuiyan & Taimur Sharif, 2024. "Digitalisation and environmental management activities: The effects of family ownership`," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4351-4374, July.
    4. 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.
    5. Jahmurataj, Veton & Ramadani, Veland & Bexheti, Abdylmenaf & Rexhepi, Gadaf & Abazi-Alili, Hyrije & Krasniqi, Besnik A., 2023. "Unveiling the determining factors of family business longevity: Evidence from Kosovo," Journal of Business Research, Elsevier, vol. 159(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrea Calabrò & James J. Chrisman & Liena Kano, 2022. "Family-owned multinational enterprises in the post-pandemic global economy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(5), pages 920-935, July.
    2. Hussingera, Katrin & Issahd, Wunnam, 2022. "Trade secret protection and R&D investment of family firms," ZEW Discussion Papers 22-039, ZEW - Leibniz Centre for European Economic Research.
    3. Katrin Hussinger & Wunnam Basit Issah, 2022. "Trade Secret Protection and R&D Investment of Family Firms," DEM Discussion Paper Series 22-11, Department of Economics at the University of Luxembourg.
    4. Luis R. Gómez-Mejia & Francesco Chirico & Geoffrey Martin & Massimo Baù, 2023. "Best Among the Worst or Worst Among the Best? Socioemotional Wealth and Risk-Performance Returns for Family and Non-family Firms Under Financial Distress," Entrepreneurship Theory and Practice, , vol. 47(4), pages 1031-1058, July.
    5. Hanqing “Chevy†Fang & James J. Chrisman & Daniel T. Holt, 2021. "Strategic Persistence in Family Business," Entrepreneurship Theory and Practice, , vol. 45(4), pages 931-950, July.
    6. Arrondo-García, Rubén & Fernández-Méndez, Carlos & Menéndez-Requejo, Susana, 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, Elsevier, vol. 7(4), pages 227-237.
    7. Xueru Yang & Jun Li & Laura J. Stanley & Franz W. Kellermanns & Xinchun Li, 2020. "How family firm characteristics affect internationalization of Chinese family SMEs," Asia Pacific Journal of Management, Springer, vol. 37(2), pages 417-448, June.
    8. Svenja Jarchow & Christoph Kaserer & Henry Keppler, 2023. "Family firm performance in times of crisis—new evidence from Germany," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(3), pages 543-580, September.
    9. Wunnam Basit Issah & Lutfa Tilat Ferdous & Faruk Bhuiyan & Taimur Sharif, 2024. "Digitalisation and environmental management activities: The effects of family ownership`," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4351-4374, July.
    10. Fynn-Willem Lohe & Andrea Calabrò & Mariateresa Torchia, 2021. "Disentangling the drivers of family firms internationalization through the lens of socioemotional wealth," Journal of International Entrepreneurship, Springer, vol. 19(4), pages 479-509, December.
    11. César Camisón-Zornoza & Beatriz Forés-Julián & Alba Puig-Denia & Sergio Camisón-Haba, 0. "Effects of ownership structure and corporate and family governance on dynamic capabilities in family firms," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-34.
    12. Patricio Duran & Nadine Kammerlander & Marc van Essen & Thomas Zellweger, 2016. "Doing More with Less : Innovation Input and Output in Family Firms," Post-Print hal-02276703, HAL.
    13. Calabrò, Andrea & Requejo, Ignacio & Reyes-Reina, Fernando & Sanchez-Bueno, Maria J. & Suárez-González, Isabel, 2024. "Nearby or faraway? Determinants of target selection in family firm acquisitions," International Business Review, Elsevier, vol. 33(4).
    14. César Camisón-Zornoza & Beatriz Forés-Julián & Alba Puig-Denia & Sergio Camisón-Haba, 2020. "Effects of ownership structure and corporate and family governance on dynamic capabilities in family firms," International Entrepreneurship and Management Journal, Springer, vol. 16(4), pages 1393-1426, December.
    15. Jiang, Fuxiu & Shi, Wei & Zheng, Xiaojia, 2020. "Board chairs and R&D investment: Evidence from Chinese family-controlled firms," Journal of Business Research, Elsevier, vol. 112(C), pages 109-118.
    16. Du, Shanzhong & Ma, Lianfu & Li, Zhuo, 2022. "Non-family shareholder governance and corporate risk-taking: Evidence from Chinese family-controlled businesses," Journal of Business Research, Elsevier, vol. 145(C), pages 156-170.
    17. Nieves Lidia Díaz‐Díaz & Pedro J. García‐Teruel & Pedro Martínez‐Solano, 2023. "Private family firms, generations and bank debt," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(3), pages 3043-3075, September.
    18. Eng, Li Li & Fang, Hanqing & Tian, Xi & Yu, T. Robert, 2021. "Path dependence and resource availability: Process of innovation activities in Chinese family and non-family firms," Emerging Markets Review, Elsevier, vol. 49(C).
    19. Joern Block & Christopher Hansen & Holger Steinmetz, 2023. "Are Family Firms Doing More Innovation Output With Less Innovation Input? A Replication and Extension," Entrepreneurship Theory and Practice, , vol. 47(4), pages 1496-1520, July.
    20. Herdhayinta, Heyvon & Lau, James & Shen, Carl Hsin-han, 2023. "Cash holdings of minority family businesses in Indonesia," Emerging Markets Review, Elsevier, vol. 55(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:156:y:2023:i:c:s0148296322009511. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.