Family Firms and Crisis Resilience
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Questions and Answers

What percentage of family businesses worry about innovation and technology?

  • 80% (correct)
  • 57%
  • 29%
  • 15%

    • What percentage of family businesses have a clear ESG strategy in 2023?

  • 30%
  • 29%
  • 57%
  • 15% (correct)

    • What hinders the progress of digital transformation in family businesses?

  • Lack of succession plans
  • Lack of clear purpose
  • Resistance to change (correct)
  • Lack of investment in innovation and technology

    • What defines a family business according to Chua, Chrisman, and Sharma (1999)?

    <p>The business is governed and/or managed with the intention to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families</p> Signup and view all the answers

    What is the name of the scale that measures the extent of family influence on an enterprise?

    <p>F-PEC Scale</p> Signup and view all the answers

    What does the F-PEC Scale measure?

    <p>The extent of family influence on an enterprise</p> Signup and view all the answers

    What is resilience in the context of a company or organization?

    <p>The ability to persist in the face of substantial changes in the external business and economic environment</p> Signup and view all the answers

    Why do family firms tend to seek sustainable solutions to current challenges?

    <p>Because they have a long-term orientation</p> Signup and view all the answers

    What can be a limitation of moral obligations in family firms?

    <p>They can stifle growth</p> Signup and view all the answers

    Why do family firms tend to act with independence?

    <p>Because they want to have flexibility and less external pressure</p> Signup and view all the answers

    What is an example of a catastrophic event that family firms may need to be resilient to?

    <p>A COVID19 pandemic</p> Signup and view all the answers

    Why do family firms tend to commit with strength during crises?

    <p>Because they want to fiercely fight for the company when it is under threat</p> Signup and view all the answers

    What is a characteristic of family-owned businesses compared to DAX companies?

    <p>They create more jobs</p> Signup and view all the answers

    What is the main trade-off considered in the trade-off theory?

    <p>Between interest tax shields and the cost of financial distress</p> Signup and view all the answers

    What is a concern facing family-owned businesses according to a 2024 article?

    <p>A lack of succession planning</p> Signup and view all the answers

    What is the sequence of financing options proposed by the pecking-order theory?

    <p>Internal equity, external debt, and new equity</p> Signup and view all the answers

    Which of the following is an example of a family-owned business?

    <p>Liebherr</p> Signup and view all the answers

    According to the trade-off theory, what would be the expected level of leverage for family firms compared to non-family firms?

    <p>Lower leverage due to higher costs of financial distress</p> Signup and view all the answers

    What is a key assumption of the pecking-order theory regarding agency costs?

    <p>Agency costs are higher for external equity</p> Signup and view all the answers

    What is a common challenge facing family-owned businesses in terms of downsizing?

    <p>Balancing stakeholder interests</p> Signup and view all the answers

    According to a 2023 article, what was a significant event in the history of Liebherr?

    <p>The company reported a record sales and a significant decline in profits</p> Signup and view all the answers

    What is the empirical evidence regarding the leverage of family firms compared to non-family firms?

    <p>The evidence is mixed, with some studies showing higher and others showing lower leverage</p> Signup and view all the answers

    Who introduced the concept of agency costs in the context of firm financing?

    <p>Donaldson</p> Signup and view all the answers

    What is a common characteristic of family-owned businesses compared to publicly traded companies?

    <p>They have a longer-term perspective</p> Signup and view all the answers

    What is a primary concern for lenders when dealing with family firms?

    <p>Low bankruptcy risk</p> Signup and view all the answers

    Why do family firms tend to have lower cost of debt?

    <p>Due to alignment of interests between family firms and lenders</p> Signup and view all the answers

    What is a characteristic of family firms that influences the cost of debt?

    <p>Higher levels of family ownership</p> Signup and view all the answers

    What is a consequence of bankruptcy for family firms?

    <p>It is more painful for family members</p> Signup and view all the answers

    What is a key characteristic of family firms' investment strategy?

    <p>Risk-averse investments</p> Signup and view all the answers

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