Angela Pike-Bowles *
Department of Applied Management, Administration and Ethical Leadership, University of Fort Hare, South Africa.
Juliet Townes
Department of Applied Management, Administration and Ethical Leadership, University of Fort Hare, South Africa.
In this post, we present a brief overview of our recently published book chapter titled “A Qualitative Exploration of Risk Management Strategies in Family Businesses”
There are multiple risks that family businesses experience in their development and continuity, such as family-related conflicts, a lack of training resources for growth, and the absence of a succession plan. Other risks include the inherent possibility of loss in business operations, environmental factors that reduce the business’s capacity to generate returns on investment, and the prospect of lower-than-anticipated profitability. It is often difficult for a family business to implement risk management (RM) because family members may not pay adequate attention to certain risks, such as criminal history or health-related issues. As a result, RM can be particularly challenging in family businesses.
The relevance of family businesses in research has increased significantly over the past few decades. Despite the need for family businesses to succeed, the literature on family businesses remains narrower than that in other management fields. Many family businesses lack the necessary structure to manage the various risks they face. This structural deficiency can lead to financial losses, legal problems, reputational damage, and other issues that may have long-term negative effects on performance and sustainability. Therefore, family businesses must develop effective RM strategies tailored to the specific risks and challenges they encounter. Scholars have also suggested the need for further research on family businesses, particularly regarding RM in uncertain economic conditions. In addition, family business growth has received limited attention in certain national contexts, such as South Africa.
Furthermore, there is a call for multiple perspectives on the relationship between RM and family business performance. This study addressed this qualitative gap by exploring the types of risks family businesses experience, their perceptions of these risks, and the influence of RM on decision-making and performance. The study sought to understand the RM mitigation strategies that family businesses apply to reduce risk and enhance performance. The following sections provide a concise literature review, followed by an explanation of the research methodology used by the authors.
