Resolving crises and conflicts in family firms in the German Mittelstand: three essays

Medium-sized enterprises are central drivers of Germany's economic prosperity and global competitiveness. They are characterized by their innovative strength, regional presence, export orientation, and adherence to tradition. Often family-owned, familial values and long-term goals significantly influence business decisions. Family businesses combine familial ties and business activities, which brings both advantages and challenges. They strive for financial stability, succession planning, and sustainability, are often risk-averse, and involve multiple generations in business management. This generational ownership dispersion can lead to complex decision-making dynamics and conflicts that impact business performance. In addition to internal conflicts, family businesses also face external challenges such as financial crises, geopolitical tensions, and digital transformation. The COVID-19 pandemic has highlighted the importance of business resilience, and digitalization processes are becoming increasingly important, with many family businesses still in the early stages of this development.
This dissertation examines how family businesses in the German Mittelstand can effectively manage crises and conflicts, particularly in the context of increasing digitalization. Paper 1 analyzes the resilience of family and non-family businesses before the COVID-19 pandemic. Paper 2 investigates how conflict management strategies can mitigate digitalization-related conflicts in family businesses and improve their digital positioning, as well as the influence of the number of family generations. Paper 3 focuses on ownership structure and its impact on organizational ambidexterity.
In summary, the results show that the effects vary depending on the conflict resolution strategies used, highlighting the importance of appropriate conflict management for long-term innovation capacity. The findings emphasize the complex interplay of digitalization effects on family businesses and the role of ownership dynamics and strategic conflict management. Contextual nuances, such as the difference between family and non-family ownership, the distribution of ownership across generations, and conflict resolution strategies, influence the extent of these effects. The research underscores the complex interplay of digitalization effects on family businesses and shows that appropriate conflict resolution strategies, particularly avoidance and collaboration, can improve resilience and organizational ambidexterity in fully family-owned businesses.