Unveiling the factors of family business resilience: an exploratory factor analysis

What the paper says

Purpose The purpose of this study is to examine and identify key factors that enhance resilience of family businesses during external crises. By understanding these factors, the study seeks to provide actionable insights to help family businesses strengthen their ability to withstand and recover from disruptions. Design/methodology/approach The present study adopts a quantitative approach, employing a survey method to collect data from 436 family-owned micro-, small- and medium enterprises in Assam. The questionnaire was developed based on an extensive literature review and included 29 potential resilience factors rated on a seven-point Likert scale. Exploratory factor analysis was first conducted to identify the core dimensions of resilience. Subsequently, confirmatory factor analysis (CFA) was performed on a second sample of 392 family businesses to validate the measurement model and confirm the structural grouping of the resilience factors. Findings The factor analysis revealed that the resilience of family businesses is strongly associated with support from family members and community (social capital), effective conflict management and goal alignment (organizational culture), employee commitment and adaptability (human capital) and external support from industry and government (external assistance). Social capital, particularly the involvement and financial support of family members or community, emerged as the most significant factor in fostering resilience during crises. The CFA results indicated a good model fit, confirming the robustness and validity of the identified resilience dimensions. Research limitations/implications This study is subject to certain limitations. The data collection was confined to family businesses in nine districts of Assam, which may limit the generalizability of the findings to other regions. Furthermore, future studies should investigate the interactions between these factors and their collective influence on crisis resilience. Practical implications The findings provide valuable insights for family business owners and policymakers on the importance of fostering strong family ties, organizational adaptability and external partnerships to enhance business resilience. Tailored support programs focusing on these areas can help family businesses prepare for and withstand future crises. Originality/value This study adds to the relatively small body of research on family businesses resilience by identifying specific factors that help businesses survive during crises. It offers a comprehensive framework that integrates family, organizational and external factors, highlighting the unique strengths of family-owned enterprises in crisis management.