Family firms challenged by crisis : A multi cased study to identify strategies applied by Swedish family SMEs in order to cope with the Covid-19 crisis

Abstract: Background: The Covid-19 crisis has caused limitations that have led to some serious economic consequences around the world. The crisis that is still ongoing has created a complex situation for most economic actors. Every firm has been affected by the crisis in one way or another including family firms, that play a vital role in the global economy. The majority of family firms are family small and medium-sized enterprises (SME), that occupy an enormous proportion of the economy. Considering the evident role of family SMEs, the crisis situation calls with urgency to investigate strategic measures that family SMEs apply in order to survive. Different from all other countries, the Swedish government has implemented the most unorthodox and relaxed restrictions in the world. This created a unique business environment for Swedish firms to operate in. Family SMEs generate 60 percent of value to the non-financial economy, and 65 percent of employment in Sweden. The crucial economical role of family SMEs in Sweden in combination with the unique restrictions, has triggered the urgency to investigate the strategic measures that Swedish family SMEs apply to adapt. Purpose & method: This study aimed to find an answer to the question of what strategic measures are applied by Swedish family SMEs in order to cope with the Covid-19 crisis. This study was executed by conducting qualitative research. 12 semi-structured interviews were conducted with 7 Swedish family SMEs from the construction, design, building, manufacturing, education and sports industries. The collected data was then sorted and analyzed systematically to generate knowledge, and draw upon conclusions that answer the research question of the study. Conclusions: The findings showed that Swedish family SMEs use a different set of strategic measures in order to cope with the crisis. This study identified five strategic measure combinations which are: three cases of persevering + innovation, 1 case of retrenchment + innovation, 1 case of retrenchment + persevering, one case of retrenchment + persevering + innovation, and one case of pure persevering. It was found that the use of the strategic measures depends on five decisive factors namely, the impact of the crisis on the firms, the industry of the firms, the unique governmental restrictions, the preparedness of the firms for crisis and the development of the strategic measures through time. One interesting result was that all the firms in the sample have benefited financially from the crisis in the long-run, despite the challenges regarding supply chain disruptions.