Crises in Family Businesses: Painful, (Un)Planned, and Personal

Abstract

Crisis management for family businesses received scant scholarly attention despite family firms’ high proneness to crises. There is a lack of understanding of the preparedness of family businesses to deal with crises and the strategies they use to mitigate their effects. In this study, we analyze family businesses’ crisis preparedness by examining how family businesses engage in crisis management planning and use of the corresponding crisis response strategies. Using qualitative content analysis of 19 in-depth interviews with family executives, we capture the variety in preparedness for crisis management in family businesses in an Arab World context. Smaller family businesses rarely plan for crises and rely more on improvised reactive responses. Also, family businesses facing reputational crises merge the identity of the family with the business by constructing the crisis as a personal attack demanding a defensive response strategy. This work contributes to crisis management and the family business literature.