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HOI research | Discovering organizational fortitude in the face of adversity - a study of a family firm

A new study, recently published in the Journal of Management, reveals the remarkable ability of family firms to not just survive but thrive through multiple adversities. By focusing on a century-old family business in the UK, researchers develop the concept of "organizational fortitude," a new lens to understand resilience in businesses facing recurrent challenges.

Unveiling the role of resilience in family firms

This research conducted on organizational resilience offers a new understanding of the unique challenges and strengths inherent in businesses facing adversity. Family firms, characterized by their generational legacy, confront distinctive tests of endurance and adaptability. This study meticulously examines how one such business navigated and triumphed over adversities, viewing these not as single occurrences but as part of a continuous, multifaceted struggle. The examination of H. Forman & Son, a storied family business with over a century of history, provides an exemplary context to comprehend these resilience dynamics.

In-depth analysis of organizational fortitude in a family business

In the study, the researchers introduced the concept, "organizational fortitude," to articulate the enduring resilience of family-run businesses. This concept is vital for grasping how these enterprises endure and also leverage challenges to their advantage. The study reveals the intricate interplay of various elements within these businesses — at individual, family, and organizational levels — that synergistically contribute to their resilient nature.

A central insight of this research is that resilience in family firms is not a fixed attribute; rather, it is a dynamic, evolving process. This resilience stems from the historical legacy of the firm, ingrained family values, and the strategic responses of leadership to various challenges. The story of H. Forman & Son, which successfully navigated a series of significant adversities such as a fire, a flood, and forced relocation, serves as a testament to this evolving resilience.

The study uncovers an intriguing pattern: each adversity encountered by the firm did not weaken, but rather acted as a catalyst for growth and change. This observation is crucial, highlighting the distinctive ability of family firms to transform adversities into opportunities, thereby strengthening and redefining their business models and practices.

The research underscores the critical role of leadership in times of crisis. The case of H. Forman & Son illustrates how decisive and adaptive leadership was instrumental in guiding the firm through each challenge, significantly influencing the firm's resilience trajectory.

Implications and directions for future research

This research does more than enhance our comprehension of resilience in family enterprises; it also paves the way for future scholarly exploration. It encourages a more profound investigation into the complex interactions among family dynamics, leadership roles, and organizational strategies in fostering resilience. These insights are invaluable, not just for family businesses but for all business types, especially in the context of today's rapidly changing and unpredictable global business environment. This study lays the groundwork for a richer understanding and application of resilience strategies in diverse business settings.

This research was conducted by a team including Professor Mattias Nordqvist. He is the SEB Chair in Entrepreneurship and Family Business, and the Director of the Center for Family Enterprise at House of Innovation. Other team members are  Celina Smith: Emlyon Business School, Emanuela Rondi: Università degli Studi di Bergamo and Alfredo De Massis: Free University of Bozen-Bolzano; IMD; Lancaster University; Zhejiang University.

Professor Nordqvist is grateful to SEB, Ferd, Salenia, Virala, Topsoe and HMP Foundation - the partners of Center for Family Enterprise, for supporting this research.

House of Innovation Entrepreneurship Family economics Journal Paper Publication Research