The antecedents of family firms’ resilience to crisis in hospitality and tourism

Highlights

• We develop a mediation model of the determinants of SME family firms’ resilience.

• We draw upon family firms’ priorities and organizational psychological capital theory.

• We test our model on family-owned SME hotels in Turkey.

• Findings show that intangible forces can differentially affect resilience capability.

Abstract

Drawing on Miller and Le Breton-Miller’s (2005 & 2022) conceptualization of family firms’ priorities (continuity, community, connections, and command) and the organizational psychological capital theory (Luthans and Youssef, 2004), we develop a mediation model of how organizational psychological capital and family firm image affect resilience capability and risk taking (which in turn influence resilience). This model is tested on 200 family-owned small and medium sized (SME) hotels in Turkey. Our study demonstrates that intangible forces can be differentially leveraged to build resilience capability. This in turn strengthens resilience in firms confronting the Covid crisis. This paper further highlights that while the development of capabilities and strategic actions is important in generating firm resilience, the assets that are used to achieve this outcome matter the most.

Introduction

The Covid crisis has severely affected the world economy through mass layoffs and business closures (Bartik et al., 2020, Fernandes, 2020, Ozili and Arun, 2020), with hospitality and tourism being particularly harmed (Alonso et al., 2022, Bartik et al., 2020, Folinas and Metaxas, 2020, Hoque et al., 2020, Huang and Wang, 2022; ). Many hospitality and tourism industry firms are small and medium sized (SMEs) that are family owned (Banki and Ismail, 2015, Getz and Carlsen, 2000, Getz and Carlsen, 2005, Kallmuenzer, 2018, Kallmuenzer and Peters, 2018, Peters and Kallmuenzer, 2018, Zhao and Getz, 2008), including the majority in Turkey (Deloitte Turkey, 2017, Esen and Uyar, 2012; Köseoglu et al., 2018). While family firms generally vary in their resilience and survivability in the face of business challenges (Calabrò et al., 2021; Kraus et al., 2020), information about the specific factors influencing SME family firm resilience in hospitality and tourism is still relatively limited (e.g., Amaral and Da Rocha, 2022; Santiago et al., 2022; Schwaiger et al., 2022). This is a particularly important gap given that this industry has been substantially affected by the current Covid-19 pandemic. Therefore, closer analysis of such family firms can improve our understanding of these factors to benefit both theory and practice.

To fill this gap in the literature, we develop the following research question: What are the determinants of SME family firms’ resilience in hospitality and tourism industry? Since firm priorities set the stage for the development of assets, capabilities, and associated outcomes, we examine this through the lenses of Le Breton-Miller and Miller, 2022, Miller and Le Breton-Miller, 2005 conceptualization of family firms’ priorities (4Cs encompassing continuity, community, connections, and command) and organizational psychological capital theory (Luthans et al., 2007a, Luthans et al., 2007b, Luthans and Youssef, 2004, Memili et al., 2013, Memili et al., 2014, Memili et al., 2020, Randolph et al., 2022). We explore the impact of organizational psychological capital and image (Dyer Jr and Whetten, 2006, Memili et al., 2010, Zellweger et al., 2012) on firm resilience and risk taking, specifically in hospitality and tourism family firms. Crises like the Covid pandemic are marked by resource scarcities and financial constraints along with generally higher risks and uncertainties. In the face of these difficulties, intangible strategic assets like organizational psychological capital and family firm image may become even more important and valuable because they can increase strategic capability and facilitate responses. This in turn strengthens resilience in family firms. In this study, we test a model developed to explain the SME family firm resilience of hospitality and tourism firms which constitute the majority in this particular industry in Turkey.

This paper contributes to research on family businesses, organizational psychological capital, and hospitality and tourism. Several studies have demonstrated how family firms have suggested and shown resilience during the Covid pandemic (Calabrò et al., 2021; Kraus et al., 2020; Le Breton-Miller and Miller, 2022). However, we believe that the present study drawing upon the 4Cs (continuity, community, connections, and command) and organizational psychological capital perspective is one of the first few to investigate this empirically by identifying the unique intangible strengths as the antecedents of SME family firms’ resilience in line with their priorities. We also illustrate the differential impact of “invisible forces” on firms’ strategic actions in terms of risk taking. Specifically, a family firm’s image can increase its resilience capability while limiting risk taking. Both elements play a significant role in developing family firm resilience in the hospitality and tourism industry. The study also introduces organizational psychological capital of family firms as a key intangible asset that facilitates resilience by enhancing both resilience capability and risk taking. To our knowledge, organizational psychological capital has not been explored as a determinant of SME family firms’ resilience in hospitality and tourism industry yet. This is particularly important when SME family firms in this particular industry face challenges in terms of human, financial, and other forms of capital even in relatively more stable and predictable external environments than a pandemic owing to internal constraints due to size and capacity. The findings build on recent research demonstrating that some family firms may be more resilient than others and inviting researchers to explore this phenomenon (Calabrò et al., 2021). At times of crisis, larger private or public family firms (e.g., global chain hotels such as Hilton, Marriott, and others) in hospitality and tourism industry may benefit from the safety cushion of economies of scale and scope, brand recognition, slack resources, resource transfers (from less affected to others), and technology. However, we still do not know enough about how SME family firms develop resilience and survive the crisis with relatively less financial resources and capacity. By drawing attention to the importance of intangible forces in developing SME family firm resilience, our study can help scholars and practitioners improve their understanding of the complex dynamics among non-financial factors, strategic capabilities and actions, and organizational outcomes in SME family firms in the hospitality and tourism industry.

The following section reviews research into family firms in hospitality and tourism, organizational psychological capital, image, resilience capability, risk taking, and resilience. The hypotheses, methodology, and empirical findings are then presented. The final section considers the theoretical and practical implications, and future research opportunities while acknowledging the study’s limitations.