Survival mode: how Latin American family firms are coping with the pandemic

Abstract

Purpose The main objective of this manuscript is to describe the current situation of a sample of family business and their response to COVID-19 pandemic. This exploratory study analyzes a series of challenges faced by this type of firm in Latin America. This study puts special focus on how the pandemic is impacting transgenerational and family entrepreneurship and the sense of legacy in family businesses. Design/methodology/approach The authors performed an online survey during June–July 2020. The survey includes 20 questions to owners or executives of family businesses about how they had been facing the onslaught of the COVID-19 pandemic in their companies. The authors received 194 valid respondents from firms that have their headquarters in Mexico, Colombia, Venezuela, Peru, Chile and other Latin American countries. Findings The empirical analysis shows that family firms in Latin America have managed to survive and stay current through family entrepreneurship, protecting their heritage and relying on legacy. Out of four main competencies, “family entrepreneurship” was the most important on which business families relied to face this crisis. Research limitations/implications The authors were able to gather information from just under 300 participants. However, the authors decided to take into account only those complete responses in the survey, so the present analysis was carried out on the valid sample of 194 respondents. Practical implications The results of this study show that business families have managed to survive and stay current through family entrepreneurship, protecting their heritage and relying on legacy. Strategic leadership and intergenerational dynamics alone are not enough to face this crisis. Social implications Family firms, like other companies, have shifted their mindset over the last months from “how can we grow” to “how can we survive”. Consequently, what competencies are necessary to develop so that family businesses can cope with this and the following crises? How are Mexico and Latin America’s family-owned businesses navigating the economic disruptions resulting from COVID-19? This paper explores the role of family firms in the wake of the COVID-19 outbreak. Originality/value This study provides an overview of the coping mechanisms that some family businesses are implementing to overcome the challenges during the pandemic, putting focus on the specific context of Latin America. Family businesses represent approximately 60% of the region’s GDP, so their survival is completely relevant in terms of not only economic impact but also social development. Future research and implications are discussed.

Guest editorial: Special issue introduction: strategic management in Latin America: exploring a VUCA context within a change of era

“…However, the resilience cultivated by some firms, governments and entrepreneurs that have devised solutions in challenging environments has been noteworthy (e.g. Flores et al , 2023; Jurado-Zambrano et al , 2023; Ramírez-Solís et al , 2021).…”

Reactions of Family Businesses to the Initial Effects of Pandemic Shock

“…For family businesses that have been operating on the market for generations, the COVID-19 pandemic was not the first crisis they had to face (Ramírez-Solís et al, 2021). Facing wars, natural disasters and deep recessions gave them a belief in the strength and commitment of the family treated as an effective form of crisis management (Leppäaho & Ritala, 2022).…”

“…In these circumstances, enterprises introduced changes to their current activities in order to avoid the negative effects of the crisis (Truant et al, 2021). This challenge was faced primarily by family businesses (Kraus et al, 2020;Ramírez-Solís et al, 2021), whose business profile is based on a long-term perspective or dissemination of family values Truant et al, 2021) that is reflected by continuity, future orientation and perseverance (Brigham et al, 2014) and accompanied by an emotional bond (Berrone et al, 2012).…”