Strategic responses of family firms to external disruption: Examining the role of family and dynamic capabilities with evidence from China
Date
2025
Authors
Zhou, Yao
Editors
Advisors
Graves, Christopher
Shi, Henry
Shi, Henry
Journal Title
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Thesis
Citation
Statement of Responsibility
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Abstract
This research examines the strategic responses of family firms to external disruptions, focusing on the role of family and dynamic capabilities (DCs) with evidence from Chinese family firms during the COVID-19 pandemic. By combining the theoretical framework of DCs in strategic management and empirical insights from family firms, this research emphasises the role of resources and knowledge and a conceptual model of DCs to explain the recovery process of family firms during external disruptions (EDs).
This research adopts an exploratory, longitudinal, multi-case qualitative approach involving 12 Chinese family firms observed over three pandemic years. This research compares and contrasts these firms’ strategic responses and recovery performance, identifying three distinct performance groups and thereby exploring the role of DCs and the family play in shaping differences between the groups. Based on the degree of recovery, the case firms are classified into fully recovered (G1), partially recovered (G2), and non-recovered (G3) groups. A recovery pattern is also identified with three stages over three years, consisting of the decline-stemming stage (Y1), recovery stage (Y2), and growth stage (Y3), illustrating the firms’ recovery trajectories throughout the EDs.
Based on the findings, this research identified four major impacts of EDs caused by the COVID-19 pandemic: resource constraints, supply chain disruptions, business operation issues, and impacts on the family system. These impacts were significant, diverse, and dynamically evolved across the three stages of the pandemic. This research examined strategic responses from both business and family systems to these impacts and found that five key types of family capital (i.e., financial, human, knowledge, social capital, and succession planning) uniquely contributed to the firm’s resources and knowledge, thereby enhancing the firm’s DCs during EDs. It can be demonstrated from fully recovered businesses (G1) that their family contributions mainly came from the family’s financial and human capital support, family members’ experience, cohesive social networks, and well-structured succession plans, which are not fully reflected in G2 and G3.
The resources and knowledge of family firms are enhanced and managed with the investment of family capital, which influences the development of adaptive, absorptive and innovative capabilities. These three specific capabilities are the three key aspects of DCs that enable firms to implement diverse strategic responses to EDs, resulting in different recovery performances. Based on theoretical and empirical insights, this research validated a DCs model specifically for family firms. This model deepens the understanding of the response process of family firms to EDs and provides insights into these key factors of family capital, resource management, organisational knowledge, DCs, strategic responses and performance. It also reveals the source of heterogeneity among family firms. Although all case firms belong to the same business group (family firms) and face the same EDs caused by the COVID-19 pandemic, their performance recovery varies because of the differences in these key factors. This research highlights the important role of family and DCs in family firms’ strategic responses to EDs, contributes to the literature on strategic management, DCs and family firms, and provides practical implications for stakeholders in the industry.
School/Discipline
Adelaide Business School
Dissertation Note
Thesis (Ph.D.) -- University of Adelaide, Adelaide Business School, 2025
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