Pandemic a test of solidarity for family businesses

The coronavirus pandemic has left many family businesses facing an uncertain future and even visions of bankruptcy. At the same time, it is in difficult times that the unique characteristics of family businesses become a recipe for survival.

Family businesses are one of the cornerstones of the global economy - it is, after all, the oldest way of doing business that we know of[1]. In spite of this, in recent years family businesses have been confronted with a harmful stereotype, according to which they were associated with small, financially unstable entities without professional management. Today, growing in strength, they constitute the vast majority of the SME sector and an important element in the Polish economy, generating a sizeable percentage of GDP. In the face of the pandemic, family businesses have also shown in many cases that their unique characteristics and the specifics of their management have allowed them to emerge from a potential crisis unscathed.

Solidarity in times of crisis

The coronavirus, which has turned everyday life and the functioning of the economy upside down, has translated into a dramatic situation for many businesses. In the case of local, family-run businesses, it was often the customers themselves who came to the rescue. After all, economic patriotism is a characteristic of consumers when faced with problems or financial crises affecting their favourite companies. Poles also behave no differently during the coronavirus pandemic. According to a survey conducted by the Family Firm Foundation at the end of 2020[2], Poles are keen to support their favourite local family businesses in times of pandemonium - this was declared by almost 70 per cent of those interviewed. This is a very high percentage, considering the current economic situation or the fact that one in four Poles fear losing their job. The most common way of showing solidarity is by shopping or using the services of selected entrepreneurs, declared by almost 54 per cent of those surveyed. Nearly 18 per cent of respondents share information on social media about supporting specific companies, and almost 12 per cent of respondents financially support fundraising for the entrepreneurs in question.

It is also specific to family businesses that solidarity works both ways here. Many family businesses are heavily involved in their local communities and their owners often feel responsible for the successful development of their region. Family-owned companies often focus their CSR strategy precisely on the local market. Although quite a few companies were hit hard by the pandemic, struggling to survive, some family businesses that did not have to face the problems rushed to help in difficult times, such as local medical facilities or friendly, affected businesses.

Family character as a motivation to help

The last few months of the pandemic have shown that family businesses have a number of qualities necessary for survival and a sense of stability and motivation in difficult, uncertain times. - A family business, in which many team members are related to each other, is often characterised by deepened, close relationships and a less formal atmosphere. This translates into high work motivation and mutual trust and loyalty, as well as a sense of collective responsibility for the fate of the company. Very often, family-run businesses transfer deepened relationships and emotional bonding not only to the company itself, but also to the entire business environment. Hence, cordial and mutually respectful relationships with the company's customers, clients or suppliers - says Arkadiusz Drążek, commercial director of the family company Brześć, which produces sweets and snacks. In such an atmosphere, mutual help, solidarity and motivation to face problems in case of challenges are natural. It is also important to remember that family business owners think about their long-term development, taking into account the next generation that may take over the reins. Hence, they approach all decisions in a strategic rather than an ad hoc manner.

Trust, loyalty and flexibility

After the outbreak of the pandemic and the freezing of many branches of the economy, family businesses also had to face the problems of staying afloat. It was the close relationships created inside and outside family businesses that often made their owners and employees feel co-responsible for the company's survival. Many entrepreneurs emphasised that security and maintaining employment stability, and thus the trust of the team, was a priority for them. In the face of new challenges, family businesses showed that they are an entity in which the fate of the employer is strongly linked to the fate of the employees, which translates into a shared commitment and determination to find ways to mitigate the negative effects of the pandemic.

An equally important characteristic of family businesses, which are usually representatives of the SME sector, and which has become a great asset in unstable times, is their great flexibility and ability to adapt quickly to new conditions. Many companies have taken it upon themselves to try to transform their businesses overnight and adapt them to new market needs. - Overnight, we decided to launch the production of disinfectants. Thanks to the family nature of our company, our high degree of flexibility and ease of decision-making, we were able to implement this plan at an express pace. Ultimately, the new brand protected us to a large extent from the negative effects of the crisis. At the same time, we were also able to secure a steady supply of disinfectants to local medical facilities - says Jakub Gromek, President of Mazurska Manufaktura S.A., which even before the pandemic focused on the production of craft spirits.

Many entrepreneurs representing family businesses look to their future with anxiety. On the other hand, both consumer patriotism and loyalty and trust on the part of employees are becoming a strength and driving force for many family business owners to fight together for the future.


Author of the text: Martyna Dziopak, PR Manager at Good One PR agency with many years of experience in communication services for family businesses in the SME sector





Material originally appeared in the Family Business magazine RELACJE, issue 1 (43) March 2021