Family Firms and Crisis Resilience

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)?

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 (B) Signup and view all the answers

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

F-PEC Scale (A) Signup and view all the answers

What does the F-PEC Scale measure?

The extent of family influence on an enterprise (B) Signup and view all the answers

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

The ability to persist in the face of substantial changes in the external business and economic environment (D) Signup and view all the answers

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

Because they have a long-term orientation (C) Signup and view all the answers

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

They can stifle growth (C) Signup and view all the answers

Why do family firms tend to act with independence?

Because they want to have flexibility and less external pressure (C) Signup and view all the answers

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

A COVID19 pandemic (A) Signup and view all the answers

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

Because they want to fiercely fight for the company when it is under threat (D) Signup and view all the answers

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

They create more jobs (C) Signup and view all the answers

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

Between interest tax shields and the cost of financial distress (D) Signup and view all the answers

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

A lack of succession planning (D) Signup and view all the answers

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

Internal equity, external debt, and new equity (B) Signup and view all the answers

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

Liebherr (B) 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?

Lower leverage due to higher costs of financial distress (B) Signup and view all the answers

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

Agency costs are higher for external equity (C) Signup and view all the answers

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

Balancing stakeholder interests (B) Signup and view all the answers

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

The company reported a record sales and a significant decline in profits (C) Signup and view all the answers

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

The evidence is mixed, with some studies showing higher and others showing lower leverage (A) Signup and view all the answers

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

Donaldson (A) Signup and view all the answers

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

They have a longer-term perspective (A) Signup and view all the answers

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

Low bankruptcy risk (A) Signup and view all the answers

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

Due to alignment of interests between family firms and lenders (C) Signup and view all the answers

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

Higher levels of family ownership (A) Signup and view all the answers

What is a consequence of bankruptcy for family firms?

It is more painful for family members (C) Signup and view all the answers

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

Risk-averse investments (C) Signup and view all the answers