Do family firms navigate reorganization differently? Insights from a socio-emotional and mixed gamble perspective

Description

This study explores whether family firms navigate formal reorganization differently from non-family firms by drawing on the socioemotional wealth (SEW) perspective and mixed gamble logic. Using quantitative data on bankrupt firms in Austria, we analyze family and non-family firms regarding reorganization outcomes and the conditions that enable successful turnaround in formal reorganization. We find that family firms exhibit higher reorganization success than non-family firms. This is driven by firm-internal and process-specific factors, such as the type of proceedings, the use of early warning systems, the development of a proper reorganization plan, and the owners’ financial contributions. Contrary to non-family firms, bank support is not decisive among family firms. Thereby, our findings reveal SEW’s dual role as both a constraint and a strategic resource in formal reorganization. We contribute to family firm research by uncovering distinct reorganization approaches under severe financial distress and by providing insights into the decision-making logics and survival strategies of family as compared to non-family firms. Furthermore, we advance the mixed gamble perspective by demonstrating that family firms dynamically reweigh SEW and financial priorities, a strategy that proves to be necessary to succeed in formal reorganization.

Period	19 Sept 2025
Event title	G-Forum, 28. Interdisziplinäre Jahreskonferenz zu Entrepreneurship, Innovation und Mittelstand
Event type	Conference
Location	Stuttgart, GermanyShow on map
Degree of Recognition	International