How do family firms cope with economic crisis? : Case studies about Chinese family firms

Abstract: Introduction:The current economic crisis started in 2007 warned many business pro-fessions how important it is to react to the crisis quickly and properly. Many studies have been conducted on family businesses about their special resources environment, succession, governance etc. There are barely literature has ever mentioned about how family business cope with economic crisis. Thus, the author conducted such a study on this topic to explore more in family business study.Purpose:To enhance the understanding of economic crisis management in fam-ily business, this thesis will analyze the actions of family firms during the economic crisis. This research aims to investigate how unique fam-ily firm resources influence the way they cope with the economic crisis.Method:A qualitative research has been conducted in this study. In-depth inter-views were conducted in two family business firms with the business owners and other high level position staff who have clear picture about the management during economic crisis. Tele-interview was adopted due to the distance limit.Conclusions:During economic crisis, family firms do not use layoff as a major means to cost down. They keep relative stable relationship with their employ-ees as well as other business partners. They seek financial and other help from the family members or in the family network rather than other external resources such as bank etc. The governance also con-cerns more on employee benefits.