Sacrifice, Protect, and Hope for the Best: Family Ownership, Turnaround Moves, and Crisis Survival

Alexandra Bertschi-Michel, Philipp Sieger, Thomas Wittig, Andreas Hack

Entrepreneurship Theory and Practice · 2023 · Volume 47 · Issue 4

Abstract

A critical yet unanswered question for family-owned firms in a survival-threatening crisis is which turnaround moves to employ and for what reasons. Building on noneconomic goals associated with family ownership and related socioemotional wealth (SEW) considerations, we theorize that the higher the degree of family ownership, the more likely family owners are to sacrifice normative SEW dimensions and to protect instrumental SEW dimensions. This then affects which operational, portfolio, financial, and managerial turnaround moves are likely to be employed, and ultimately, the odds of insolvency. Analyzing a unique sample of responses from 209 bank turnaround managers generally confirms our theorizing.

Keywords

family ownership, socioemotional wealth (SEW), turnaround moves, severe crisis

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