Behavioral Rigidity vs. Strategic Flexibility: Family Firms in a Global Crisis

Global crises often force a pivotal choice between protecting human legacy and ensuring financial survival, yet the psychological drivers behind these trade-offs remain poorly understood. While family firms are traditionally viewed as inherently resilient, the unique emotional attachments of their owners may constrain their ability to adapt to unprecedented shocks. This study examines the behavioral underpinnings of crisis management across 11 European nations during the COVID-19 pandemic, challenging the traditional stewardship paradigm. Findings reveal a significant tension between preserving socioemotional wealth and economic survival. While family-managed firms prioritized personnel retention and financial autonomy, thus avoiding the psychological stigma of government aid, these non-financial priorities often proved detrimental to liquidity and business survival. This suggests that high emotional endowment can induce behavioral rigidity and an escalation of commitment, hindering strategic pivots. Furthermore, the results highlight a trend toward mimetic isomorphism, where extreme uncertainty forced a convergence of crisis responses across diverse organizational structures. Overall, the contribution of this study is to challenge the resilience myth, illustrating that acute shocks often override the distinctive behavioral archetype of family firms, forcing a shift toward institutional conformity and standardized mandates.