CRISIS IN MEXICO: ITS EFFECTS ON FAMILY OWNED BUSINESSES

Abstract

In December 1994, Mexico suffered a deep financial crisis which caused a sustantial devaluation of the peso. The new government as well as millions of entrepreneurs were caught by surprise. This paper will review: 1. An austerity measures, changes in attitude, adaptability and other adjustments forced by this crisis on several representative Mexican family businesses. 2. Conflicts within family members owning to financial, succession and psychological factors. 3. Evolving corporate and family strategies being used by several businesses for survival. 4. Effects of this situation on women entrepreneurs, both in their businesses and in relation to their families. The author will focus on several financial strategies, boards of directors and advisors of family businesses and their effectiveness in conflict resolution and strategic planning. This paper is based on author’s exprience with several dozen firms in Mexico, before and during this still ongoing crisis. Changes in attitudes, family dynamics and management strategies forced by this unexpected “meltdown” will help viable companies survive and grow in the next generation. Moreover, it could mean an important starting point for entrepreneurs and their families everywhere who wish to embark in new ventures in these turbulent times.