Just 36% of the family businesses surveyed by the Entrepreneurial Family Institute for Mexico and Latin America had already created or formalized a Crisis Committee during the early months of the pandemic.

By INSTITUTIONAL COMMUNICATION | EGADE BUSINESS SCHOOL

Within the framework of a discussion session of the Family Enterprise Research Conference (FERC), María Fonseca, Director of Tecnológico de Monterrey’s Entrepreneurial Family Institute for Mexico and Latin America (IFEM), and Laura Zapata, Associate Academic Dean of EGADE Business School, shared the main findings of the survey “Panorama for Family Businesses in the Face of COVID-19”.

The study, conducted by IFEM during June and July 2020, gathers evidence from 250 participants belonging to family businesses, mostly first and second generation, and with 20% belonging to third-generation firms. Fifteen percent of these companies are headquartered in Colombia, Chile, Perú and Venezuela, and 80% in Mexico.

Regarding the institutionalization of the family business, the study revealed that 43% of the sample has a Board of Directors, just 31% has a formal Family Council, and 36% indicated that they already had or had formalized a Crisis Committee during the early months of the pandemic.

Fonseca commented that innovation and creativity issues were a constant among the family enterprise members surveyed regarding the significance they afford as a family to the “crisis”.

Maintaining financial sustainability was also a priority for the family firms, although the sample responded that family prestige and remaining connected with the market were equally important. 

“This leads us to reflect on family businesses, in the sense that apart from generating wealth across generations, they also build a legacy that transcends financial matters, significantly weighing family prestige and its role in society,” Fonseca stressed.

Moreover, Zapata emphasized how important it is for family enterprises to have learning processes in the construction of a legacy so that future generations can understand these dynamics from a historical perspective, particularly all those related to unexpected events and change management, providing insight into how they have responded in different crises, such as the current pandemic.

The survey results can be viewed on the IFEM website, here.

The aim of IFEM is to generate and integrate knowledge, enabling and accompanying the families and their leaders in competency development, thereby producing a transformation that will favor value generation and the flourishing of the family, company and its environment, throughout generations.

FERC, an event that was established in 2005, is dedicated to developing a community of scholars interested in conducting research into understanding family firms and creating usable knowledge in this field.