Shifting Socioemotional Wealth Prioritization During a Crisis

Shifting socioemotional

wealth prioritization

during a crisis

A content analysis of statements to shareholders of family businesses

MASTER THESIS WITHIN: Business Administration

NUMBER OF CREDITS: 30 ECTS

PROGRAMME OF STUDY: Global Management

AUTHORS: Stella Alice Gisela Heuer & Lajos Szabó

TUTOR: Tommaso Minola

JÖNKÖPING May 2021

Master Thesis in Business Administration Title: Shifting socioemotional wealth prioritization during a crisis: A content analysis of statements to shareholders of family businesses Authors: Stella Alice Gisela Heuer and Lajos Szabó Tutor: Tommaso Minola Date: 2021-05-24 Key terms: Family business, socioemotional wealth, FIBER, COVID-19, content analysis, Sweden, Germany Abstract Family businesses are generally considered to be the most prevalent form of business around the world. They have also been shown to differ from their non-family counterparts due the non- economic factors that influence their decision-making. One of the most widely used conceptualization of these factors concerns the controlling family’s socioemotional endowment or in other words, the family’s socioemotional wealth. Newer approaches have proposed that socioemotional wealth can not only be broken down into several component dimensions, but that these dimensions may shift in prioritization in response to different contingencies. The sudden spread of the COVID-19 pandemic and the global crisis that has followed in its wake is one such contingency, impacting economies and family firms virtually everywhere in the world. Studying the crisis’ effects on family firms has thus already been outlined as a major focus of research going forward. This paper aims to develop the concept of socioemotional wealth as a dynamic construct and study the crisis’ effects on family firms. We conduct a content analysis of 20 Swedish and 20 German publicly listed family firms’ statements to shareholders published over a three-year period coinciding with the emergence of the crisis. Thus, this research presents an empirical look at how family firms in the contexts of two differing governmental responses to the crisis prioritized the different dimensions of their socioemotional wealth. The results show the families’ emotional attachment coming to the forefront in both cases, with no significant difference between the two countries’ family firms. Furthermore, we observe the families’ socioemotional ties to their employees retain their pre-crisis prevalence as the most prioritized dimension. This is accompanied by a deepening of the quality of the communication tied to this dimension of socioemotional wealth with it coming to reflect the emerging solidarity and cultural changes resulting from the crisis. The results suggest that family firms may respond to a crisis on the scale of the COVID-19 pandemic through their decision-making being increasingly influenced by their emotional attachment to the firm, while also retaining a focus on preserving strong social ties to their employees to persevere through the difficult period.

Acknowledgements We would like to give our gratitude to our supervisor, Tommaso Minola, for his unyielding support and valuable feedback during the writing of this thesis. His comments helped guide our research tremendously. We would also like to give a warm thank you to our peers in our thesis group for the insightful discussions and keen observations. We further thank Jordan-Dawn De Laender, Antonia Focke, Abdimajid Khayre and Jan Niklas Schmänk for their contributions in improving our work with their detailed comments and assessments as part of our monthly seminars.

Table of Contents List of Abbreviations ...... v List of Figures ...... vi List of Tables ...... vi List of Appendices ...... vi 1 Introduction ...... 1 1.1 Background ...... 1 1.2 Research Problem ...... 2 1.3 Research Purpose and Research Questions ...... 4 2 Theoretical Background ...... 5 2.1 Literature Review Procedure...... 5 2.2 Family Businesses ...... 6 2.3 Socioemotional Wealth ...... 8 2.4 FIBER ...... 9 2.5 Crises in Family Businesses ...... 14 2.5.1 Crisis Management in Family Businesses...... 14 2.5.2 COVID-19 ...... 15 2.5.3 Government Responses to COVID-19: Sweden and Germany ...... 16 2.6 Propositions and Model Construction ...... 19 3 Methodology ...... 27 3.1 Research Philosophy ...... 27 3.2 Research Approach ...... 29 3.3 Research Strategy ...... 30 3.4 Sample Selection and Data Collection ...... 34 3.5 Data Analysis Procedure...... 37 3.6 Research Quality ...... 38 3.7 Research Ethics ...... 39 4 Findings and Data Analysis ...... 41 4.1 Description of Empirical Data ...... 41 4.2 Descriptive Statistics ...... 45 4.3 Statistical Analysis ...... 50 4.4 Summary and Comparison with Prior Research ...... 53 4.4.1 Summary of Findings ...... 53 4.4.2 Ability Dimensions “F” and “R” ...... 54 4.4.3 Willingness Dimensions “I”, “B” and “E” ...... 57 4.4.4 Answering the Research Questions ...... 64 5 Discussion ...... 66 5.1 Discussion of Findings ...... 66 5.2 Contribution and Implications ...... 67 5.3 Limitations ...... 70 5.3.1 Limitations of Theoretical Background ...... 70 5.3.2 Limitations of Research Design ...... 71 5.3.3 Limitations of Data Set ...... 72 5.3.4 Limitations of Data Analysis ...... 73 5.4 Future Research ...... 73

iii

6 Conclusion ...... 76 7 Reference List...... 78 8 Appendices ...... 85

List of Abbreviations

B – The socioemotional wealth dimension of binding social ties COVID-19 – Coronavirus disease 2019 E – The socioemotional wealth dimension of emotional attachment EC – European Commission F – The socioemotional wealth dimension of family control and influence I – The socioemotional wealth dimension of identification with the firm on the family member’s side OxCGRT – Oxford COVID-19 government response tracker R – The socioemotional wealth dimension of renewal of family bonds to the firm achieved by way of dynastic succession SEW – Socioemotional wealth WHO – World Health Organisation

List of Figures

Figure 1: FIBER and its conditional inferences ...... 11 Figure 2: SEW crisis model ...... 20 Figure 3: Research onion ...... 30 Figure 4: Descriptive statistics – year founded and number of employees ...... 41 Figure 5: Descriptive statistics – revenues in million EUR ...... 42 Figure 6: Descriptive statistics – sectors and family voting rights ...... 42 Figure 7: Descriptive statistics – family member is on Executive Board ...... 43 Figure 8: Descriptive statistics – family member is on Board of Directors ...... 44 Figure 9: Descriptive statistics – family member is author of statement ...... 44 Figure 10: Descriptive statistics – family name is also company name ...... 45 Figure 11: FIBER prioritization in both countries (2018-2020) ...... 47 Figure 12: FIBER prioritization Swedish sample (2018-2020) ...... 47 Figure 13: FIBER prioritization German sample (2018-2020) ...... 48 Figure 14: Number of FIBER and COVID-19 crisis related paragraphs ...... 62

List of Tables

Table 1: The FIBER dimensions of SEW ...... 10 Table 2: Summary of propositions ...... 26 Table 3: The ten steps of quantitative content analysis ...... 32 Table 4: Breakdown of coded paragraphs ...... 46 Table 5: Kruskal-Wallis test results for combined sample ...... 51 Table 6: Kruskal-Wallis test results for Swedish sample ...... 51 Table 7: Kruskal-Wallis test results for German sample ...... 51 Table 8: Employee recognition before versus during COVID-19 ...... 61

List of Appendices

Appendix 1: Literature overview procedure ...... 85 Appendix 2: Coding scheme ...... 85 Appendix 3: Sample overview Swedish publicly listed family businesses ...... 86 Appendix 4: Sample overview German publicly listed family businesses...... 87 Appendix 5: Number of firms addressing specific FIBER dimensions ...... 89 Appendix 6: Mann-Whitney U test results for the combined sample ...... 89 Appendix 7: Mann-Whitney U test results for Germany...... 90 Appendix 8: Mann-Whitney U test results for Sweden ...... 91 Appendix 9: Mann-Whitney U test results between Germany and Sweden...... 92 Appendix 10: Sample excerpts from statement to shareholders – “F” dimension ..... 93 Appendix 11: Sample excerpts from statement to shareholders – “I” dimension...... 94 Appendix 12: Sample excerpts from statement to shareholders – “B” dimension .... 95 Appendix 13: Sample excerpts from statement to shareholders – “E” dimension .... 96 Appendix 14: Sample excerpts from statement to shareholders – “R” dimension .... 97

1 Introduction

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In this chapter the background of the research is introduced discussing family businesses, their relevance and how they may be influenced by outside stimuli such as crises. This is followed by the presentation of the identified research problem. The chapter is then concluded by the formulation of the research questions.

1.1 Background Family firms are considered to be the most widespread form of business in the world (Gersick et al., 1997; La Porta et al., 1999). This fact by itself may suggest that no amount of focus could be considered too much when it comes to seeking to understand how these businesses differ from their non-family counterparts, what drives them and how they make decisions in the myriad of contingencies they may face. In turn, family firms have been the subject of a steadily growing stream of research. The fruits of this labour have shown that family businesses are not only the most common form of business around the globe but are also each unique in their own way. Indeed, if there is one aspect that family business research has seemingly solidified regarding their subject matter it is that no two family firms are ever the same (Daspit et al., 2018; Gómez-Mejía et al., 2007). Yet, there seems to be one crucial aspect of family firms that still unifies them and sets them apart from non-family firms. That is not to say that the aforementioned field of family business research has agreed upon a unified definition of what a family firm is, quite the opposite in fact. However, what research does seem to have agreed on regarding family business is that they distinguish themselves from all other forms of organizations through the key importance non-economic factors play in their management (Gomez-Mejia et al., 2011).

Thus, the question of what exactly these non-economic factors are, how they are shaped and how family business principals make decisions according to them has led to several different conceptualizations of what drives family firm decision-making (Berrone et al., 2012; Gomez-Mejia et al., 2011; Gómez-Mejía et al., 2007). One such conceptualization that has received much focus is that of socioemotional wealth (SEW) (Gomez-Mejía et al., 2007). The concept proposes that in order to pursue and protect SEW, that is non- financial aspects of the business such as family influence and ensuring intra-family succession, family firms have been shown to be willing to incur significant risks to their

financial performance. In contrast to previously used ones in the field of family business research the concept of SEW has been positioned as an approach which itself is specific to and originates from the unique way family businesses make decisions. It has been used and expanded upon extensively since its conception (Berrone et al., 2012). SEW has seen application in studying how external stimuli such as a crisis affects family businesses with recent focus being placed on the global financial crisis (Faghfouri et al., 2015; Rivo- López et al., 2020).

The topic, however, is still ripe with new opportunities for exploration. The relevancy of further such research could not be more apparent with the emergence of the COVID-19 pandemic and the crisis it has left in its wake (De Massis & Rondi, 2020; Kraus et al., 2020; Rivo-López et al., 2020). With it officially being classified as a pandemic in the spring of 2020, COVID-19 has impacted businesses on a global scale (WHO, 2020e).

In connection to previous crises family firms have already been shown to react in unique ways when compared to non-family ones, for instance through being a greater source of job stability (Rivo-López et al., 2020). Thus, it is imperative that more effort is directed towards understanding both the unique ways in which family firms face crises and the family firm specific goals behind their decisions. In turn, a global crisis of such magnitude not only further accentuates the necessity of such research, but also presents an unparalleled opportunity to further our understanding of the non-economic goals that drive family firms and how they are influenced by the outside contingency of a crisis (Swab et al., 2020). Due to the pandemic’s global nature, we are also able to observe how these goals are affected in family firms operating in diverse national contexts that entail different governmental methods to halting the spread of the virus. This study seeks to contribute to filling the gap in family business research connected to these topics.

1.2 Research Problem

As outlined in recent discussions, the COVID-19 pandemic has already had a profound effect on family businesses by posing new challenges (De Massis & Rondi, 2020; Kraus et al., 2020). De Massis and Rondi (2020) outline a SEW-based approach as a possibility for future research, specifically calling attention to the potential in using SEW-based approaches that focus on how the pandemic has affected the interplay between different dimensions that can be considered to make up SEW. One such approach builds on the

concept of SEW by breaking it down into five dimensions which together make up the socioemotional endowment of the controlling family (Berrone et al., 2012). These five “FIBER“ dimensions of SEW (Berrone et al., 2012) have already seen use in studying how family firms behave during a crisis. One such study found that family firms in Spain proved to be a source of higher job stability than their non-family counterparts during the global financial crisis (Rivo-López et al., 2020). Furthermore, this study also concludes by calling attention to the future study of family firms’ potentially similar role during the COVID-19 pandemic.

Recent developments regarding the topic of SEW have also suggested conceptualizing and further investigating FIBER as a dynamic construct where its dimensions interact and shift in priority in response to different contingencies (Nason et al., 2019; Swab et al., 2020). Finally, even though in the original conceptualization of the FIBER dimensions suggested the use of content analysis as a suitable method for the concept’s further research (Berrone et al., 2012) the method has been severely underutilized. Given the method’s natural fit for longitudinal studies which could investigate how FIBER dimensions shift over time, it is even more surprising that only a scarce few papers have adapted the approach thus far (Cleary et al., 2019).

Considering the above, it is clear that at the intersection of the topics of family businesses, their SEW endowment conceptualized as a dynamic construct and crisis lies a research gap that is ripe for new studies. The relevance of new research aiming to fill this gap is further made imperative when considering the magnitude of the global crisis caused by the COVID-19 pandemic. Following these points, this paper investigates how the interplay of the different FIBER dimensions making up SEW may have been influenced in the family firms of two countries with differing governmental restrictions related to the pandemic. This is achieved through the content analysis of statements to shareholders published during a three-year period coinciding with the emergence of the crisis, allowing for a longitudinal approach.

We aim to look at family firms dealing with the situation under the fundamentally different decentralized and voluntary guideline-based approach that the Swedish government has taken in its answer to the COVID-19 pandemic, in contrast to the rest of Europe (Granberg et al., 2021; Kuhlmann et al., 2021). We also reflect on how this

difference in approach could have potentially influenced the SEW prioritization of Swedish family businesses during the pandemic when compared to those of a European country with more severe restrictions. For this purpose, we have chosen Germany. We specifically aim to uncover how the crisis may have impacted the prioritization of FIBER dimensions by family firm principals and how the difference in governmental approaches in response to the crisis may have influenced this prioritization (Rivo-López et al., 2020; Swab et al., 2020). Furthermore, this is investigated in the context of two countries with divergent governmental restrictions put in place in response to the crisis. In doing so this work answers calls for expanding the SEW literature in relation to the pandemic’s effects (De Massis & Rondi, 2020; Rivo-López et al., 2020) and for the study of its FIBER dimensions as a dynamic construct (Swab et al., 2020). Furthermore, it does so using a method that is both underutilized in family business research and has been explicitly recommended for further developing the FIBER construct (Berrone et al., 2012; Cleary et al., 2019).

1.3 Research Purpose and Research Questions The aim of this thesis is to understand the impact that the COVID-19 pandemic has had on family business decision-making during crises by investigating its impact on SEW. Our aim is to study how the pandemic affected family business decision-making when viewed through the lens of the five FIBER dimensions. Following recent developments related to the conceptualization of FIBER, we seek to study how the prioritization of these dimensions may have shifted in response to the crisis (Cleary et al., 2019; Swab et al., 2020). Furthermore, we seek to discover how the diverging contexts of differing governmental regulations may have influenced how the crisis impacts the prioritization of these dimensions. This is achieved by comparing firms in two countries with differing approaches to the crisis. For this purpose, we have chosen Sweden where the government took on a voluntary recommendation-based approach and Germany where compulsory restrictions were put into place.

We thus construct the following two research questions:

I. Research Question: How does a crisis affect the prioritization of SEW dimensions in family firm decision-making? II. Research Question: How is this prioritization different between family firms of countries with alternate governmental responses to the crisis?

2 Theoretical Background

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The following chapter provides a discussion of the existing literature in the field of family business research with a focus on decision-making in family firms as conceptualized through SEW. First, we provide our literature review procedure which is followed by a brief overview of family businesses. After that, our selected definition of a family businesses is introduced as well as the concept of socioemotional wealth and its FIBER dimensions. Next, the phenomenon of a crisis in family businesses is discussed, leading into a description regarding the one caused by the COVID-19 pandemic. We conclude by presenting a SEW model with its FIBER dimensions extended to account for the effects of a crisis.

2.1 Literature Review Procedure With the aim of finding adequate and suitable academic literature for the theoretical background section underlying our research, different literature databases for the search were used. We wanted to ensure that we did not focus on only one literature database and thus miss relevant articles. Hence, we primarily concentrated our search on Web of Science and Scopus1, as these search portals are known for their trustworthiness as well as their peer-reviewed high-quality articles. Furthermore, we also took care in ensuring that most of our chosen articles’ journals were on the ABS list of 2018, following the guideline that their rating should be at least 2 or higher to be included in our work. We only made an exception if the article was indispensable for the study.

For our search runs in the above-mentioned databases we divided our literature search into different batches: family businesses and crises, socioemotional wealth, FIBER, COVID-19 and related governmental responses. Initially, our search words were "family business" in conjunction with "crisis", "COVID-19" and "decision making". We later followed this up with searches using the keyword combinations of "socioemotional wealth" and "crisis", specifically keeping an eye out for articles by Gomez-Mejia, given the authors key role in developing the concept. Afterwards our search focused on the topic

1 In Web of Science we searched within all fields. In Scopus we searched within the combined fields of article title, abstract and keywords for the purpose of narrowing the search.

of "FIBER". Additionally, we searched for "government", "COVID-19", "pandemic", "Sweden", "Germany" and "prospect theory". An overview of our literature review procedure can be found in Appendix 1.

Due to the topic of the COVID-19 pandemic and the crisis it fostered still being fresh in the literature, we paid special attention to continuously search for new literature during the writing process which encompassed the period between January and May of 2021. This was done because some articles relevant to us may not have been published until 2021 due to the then still ongoing nature of the pandemic. We proceeded in the same way with the other topics.

In addition, the sources used in the articles found through the above process were also reviewed if they were found to connect to our chosen topics. This allowed us to account for relevant articles that were not displayed in the results of the searches conducted using the above-mentioned portals. Thus, we added an element of snowballing to our process.

2.2 Family Businesses Family business research has seen a significant and continuous growth for the last two decades (Brigham & Payne, 2019; Gomez-Mejia et al., 2011; Swab et al., 2020). The diverse research interest that family firms have garnered is not surprising if one considers the global prevalence of the myriad of businesses that fall under the family firm umbrella term (Gomez-Mejia et al., 2011). Research in the field has consistently pointed out family firms to be the most common form of businesses around the globe (Gersick et al., 1997; La Porta et al., 1999).

In general, a family firm can be defined as “a firm where members of the founding family continue to hold positions in top management, are on the board, or are blockholders of the company” (Chen et al., 2008, pp. 499-500). However, the increased focus placed on family firms is also coupled with research that has dealt with a plethora of differing topics in relation to family businesses, thus resulting in no clear consensus regarding how to best define the term “family business” (Chua et al., 1999; Gomez-Mejia et al., 2011; Gómez- Mejía et al., 2007). Gomez-Mejia et al. (2011) arrive at the conclusion that the literature mostly agrees on family firms differentiating themselves from other organizational forms with the increasingly important role non-economic factors play in their management. When it comes to empirical research, they also point out how more nuanced operational

definitions should be left to the discretion of the given researcher. According to them this is made necessary due to the heterogenous nature of family firms, an attribute that has been discussed in various contexts, whether it be in terms of varying ownership structures, differing contingencies affecting decision-making processes or governance structures (Daspit et al., 2018; Gómez-Mejía et al., 2007; Martin & Gomez-Mejia, 2016; Swab et al., 2020).

One area of major focus for family business research in recent years has been that of SEW, a construct seeking to understand family firm decision-making by looking at the non-economic family specific drivers influencing them (Brigham & Payne, 2019; Gómez-Mejía et al., 2007; Schulze & Kellermanns, 2015; Swab et al., 2020). The popularity of the concept has, in turn, allowed for several operational conceptualizations of a definition for family firms. Due to our theoretical approach being based on SEW and its FIBER dimensions, we will be using a definition of family firms that is also based on the SEW approach, in line with the recommendations of Gomez-Mejia et al. (2011).

Gomez-Mejia et al. (2011) define family firms through the use of the SEW concept, pointing out how they can be characterized as being “motivated by and committed to the preservation of nonfinancial or affective utilities, or what we call socioemotional wealth” (Gomez-Mejia et al., 2011, p. 692) and thus differentiating them from non-family firms. We adapt this broader definition of the family firm. However, they further add that specific operationalizations of the definition should depend on the given study’s context. Due to this, alongside the above broader SEW-based definition of family firms, we also define family firms from an operational perspective. For this goal we adopt the definition of family firms by the European Commission (EC, 2009) as it has been previously used to define family firms in the national context of Sweden (Andersson et al., 2018) and it matches the criteria used in German family firm related studies (Benz et al., 2020). Thus, it fits our research since we focus on publicly listed family firms in Sweden and Germany. For publicly listed companies, the approach defines family firms as ones where either an individual or a family holds at least a quarter of the decision-making rights, in conjunction with one family member engaged in the firm’s governance at minimum (EC, 2009). The basis of our research, however, is mainly rooted in SEW and its approach to conceptualizing and defining family firms. We discuss the concept in detail in the following section.

2.3 Socioemotional Wealth The concept of socioemotional wealth, first introduced by Gomez-Mejia et al. (2007), looks at family firm decision-making from a behavioural agency theory perspective (Miller & Le Breton-Miller, 2014; Wiseman & Gomez-Mejia, 1998). The construct proposes that contrary to the generally accepted assumption that had dominated before the publishing of the aforementioned article, family firms are not risk averse but in fact are willing to take on significant risk in order to preserve their socioemotional endowment. SEW itself can be defined as the affective endowments or affective utilities of family firms (Berrone et al., 2012; Gomez-Mejia et al., 2011; Gómez-Mejía et al., 2007).

The SEW approach proposes the notion that family firms’ primary frame of reference for decision-making concerns these non-financial aspects of the firm and hence problems are framed and assessed in terms of potential gains and losses to SEW (Berrone et al., 2012). The pursuit of preserving SEW in turn means that family firms make economically risky decisions, due to their frame of rationality being one that primarily aims to preserve or increase their socioemotional endowment (Gomez-Mejia et al., 2011; Gómez-Mejía et al., 2007). From the perspective of non-family firms where financial performance is used as the dominant guide of decision-making, this would consequently seem like irrational decision-making.

The concept of SEW, non-economic goals driving family firm decision-making, has since been the focus of intense research (Brigham & Payne, 2019; Gomez-Mejia et al., 2011; Schulze & Kellermanns, 2015). The interplay of financial and non-financial goals in family firms has been expanded upon considerably (Gomez-Mejia et al., 2018; Gomez– Mejia et al., 2014; Martin & Gomez-Mejia, 2016). This line of research has shown a more nuanced picture regarding the relationship of SEW-related and financial goals, with them having the potential to either reinforce or hinder each other depending on the given situation of the family (Gomez-Mejia et al., 2018; Martin & Gomez-Mejia, 2016).

SEW has also received its fair share of critique aiming to deepen and develop the concept as the amount of research using the approach proliferated (Kellermanns et al., 2012; Miller & Le Breton-Miller, 2014; Newbert & Craig, 2017). There are several main points of critique concerning SEW. Some discuss how most research has relied on secondary data and has been conducted using family ownership or other proxies as a stand-in for the

existence of SEW in a given firm (Gomez-Mejia et al., 2011; Miller & Le Breton-Miller, 2014). Others question if the concept is unique to family firms to begin with (Miller & Le Breton-Miller, 2014). Furthermore, the topic of whether SEW is inherently altruistic or self-serving (Newbert & Craig, 2017) or if SEW itself can be a burden to the firm (Kellermanns et al., 2012) has been a locus of discussion in studies critiquing SEW. In our research we aim to answer calls for a more direct approach to measuring SEW, albeit still through secondary data, by adapting a model that looks at the prioritization of SEW dimensions by the family (Swab et al., 2020). By using secondary data, we are able to take on a longitudinal approach that was able to cover a multitude of different family firms and their own unique experiences before and during the crisis.

The SEW literature has furthermore expanded into the research topics of family business decline (Llanos-Contreras & Jabri, 2019) and crisis management within family firms (Casillas et al., 2019; Marett et al., 2018; Rivo-López et al., 2020). However, a SEW- based look at the crisis management of family firms is still ripe for new research opportunities, given both the novelty of the global crisis situation caused by the COVID- 19 pandemic (De Massis & Rondi, 2020; Kraus et al., 2020; Rivo-López et al., 2020) and new approaches to operationalizing SEW through the FIBER model as dynamic concept (Swab et al., 2020).

2.4 FIBER The FIBER model breaks down SEW into five dimensions in order to allow for a more detailed view of the different components that shape a family firm’s socioemotional endowment (Berrone et al., 2012). As seen in Table 1, FIBER corresponds to the five dimensions of: family control and influence (F), identification with the firm on the family member’s side (I), binding social ties (B), emotional attachment (E) and renewal of family bonds to the firm achieved by way of dynastic succession (R) (Berrone et al., 2012). Since its inception the concept has been expanded upon in various ways. The family firm aspects embodied in each dimension have also received individual attention (Hauck et al., 2016; Martin & Gomez-Mejia, 2016; Rivo-López et al., 2020; Swab et al., 2020). In our overview of the FIBER construct, we consider the original conceptualization, recent developments and proposed modifications to the construct as well as relevant topics related to each dimension in order to assist the formulation of our own SEW model based on the FIBER dimensions as discussed in section 2.6.

FIBER Dimension Description

Family members’ ability to exert control over and influence F Family Control and Influence strategic decisions for the family firm. Family members’ ties to the firm concerning how they view Identification of Family their own family’s identity and the family firm’s identity to I Members with the Firm overlap, for example through the firm sharing the family’s name. Family members’ bonds both with other members of the family B Binding Social Ties and non-family stakeholders in connection to the firm. Emotional Attachment of The role family members’ emotions play in family firm E Family Members decision-making. Renewal of Family Bonds The drive and ability of the family to pass down the firm R Through Dynastic Succession through intra-family succession. Table 1: The FIBER dimensions of SEW (own elaboration based on Berrone et al., 2012)

Before the individual dimensions are illustrated in detail it needs to be noted that one of the most recent developments of the FIBER model further categorizes the dimensions into the categories of willingness and ability (Swab et al., 2020). In this conceptualization of the model, the existence of SEW within a firm is dependent on whether it fulfils the conditions of both having the willingness and the ability to support it. Ability covers the two dimensions of family control and influence (F) as well as renewal of family bonds to the firm achieved by way of dynastic succession (R). The other three dimensions of identification with the family firm, binding social ties and emotional attachment fall under the willingness category. According to this approach a family firm possess SEW if it simultaneously has both dimensions of the ability category and at least one dimension that falls under willingness. Having both of the ability dimensions gives firms the power to pursue and preserve SEW, while having at least one of the willingness dimensions gives them the drive to do so (Figure 1). Swab et al. (2020) further propose that these dimensions can shift over time, as the family firm prioritizes different dimensions in response to different contingencies. Next, we shift our focus to discussing the individual FIBER dimensions.

Figure 1: FIBER and its conditional inferences (own elaboration based on Swab et al., 2020)

According to Berrone et al. (2012) the dimension of family control and influence (F) ties into the distinguishing feature separating family firms from non-family ones, namely the family members’ ability to influence and control strategic decisions. This aspect of family firms is also used in cases to define family firms themselves (Chua et al., 1999). Regardless, as Berrone et al. (2012) detail, the continued preservation of such control is an important factor for keeping SEW intact. Additionally, the dimension relates to the topic of the potential development of nepotism in family firms, which has recently been shown to be able to both aid or undermine family firms (Firfiray et al., 2018). Critiques of the FIBER model have also pointed out that this dimension may overlap with the dimension of renewal of family bonds (R) (Hauck et al., 2016). Furthermore, it is noted to being measured in how control is exerted in practice over the firm by the controlling family. Thus, this dimension can be said to have more ties to the economic side of the firm, as opposed to the affective dimensions driving the family decisions (Hauck et al., 2016). This dimension has also been theorized to negatively impact financial performance (Martin & Gomez-Mejia, 2016). Building upon prior research concerning this dimension, Swab et al. (2020) frame family control and influence as a necessary but not sufficient condition within a firm for SEW to exist. They outline this dimension as additionally needing the dimension of “R” to give a firm the ability to work towards preserving SEW and at least one of the other three dimensions for SEW to exist within the firm (Figure 1).

The “I” dimension refers to family members’ identification with their firm and ties into the identity of the firm being an extension of the family’s identity (Berrone et al., 2012). Thus, this dimension is associated with explaining more responsible decision-making in family firms, to avoid tarnishing both the name of the firm and the family. In line with this reasoning, the dimension has also been suggested to be positively associated with firm performance (Martin & Gomez-Mejia, 2016). In their modified FIBER model Swab et al. (2020) assign this dimension the role of providing the willingness for the controlling family to work towards SEW-related goals (Figure 1).

Binding social ties (B) in Berrone et al.’s (2012) original approach refers to the social relationships of the family firm. It is also categorized as a factor contributing to willingness in pursuing SEW by Swab et al. (2020) (Figure 1). This dimension has been associated with how family firms make decisions regarding both family members and other non-family stakeholders such as for instance employees, suppliers or local communities. Additionally, family firms have been shown to put care into preserving relationships with both (Casillas et al., 2019; Cennamo et al., 2012; Rivo-López et al., 2020). For relations between family members, the related topics involve ones such as favouritism possibly leading to nepotism and its potential benefits or negative effects (Firfiray et al., 2018). The topic of non-family employees has also been expanded in recent research, with family firms being shown to provide a higher rate of job stability during crises than their non-family counterparts (Rivo-López et al., 2020). However, the dimension has also been associated with a possible negative effect on performance, as family members may shift towards favouritism excluding non-family employees from top management (Martin & Gomez-Mejia, 2016). Furthermore, the dimension of binding social ties has been pointed out to be in need of further development in relation to its operationalization (Hauck et al., 2016).

Emotions have received their fair share of focus in family business research (Kellermanns et al., 2014; Morgan & Gomez-Mejia, 2014). Given how SEW concerns the non- economic family centric affective endowment of family firms, it comes as little surprise that FIBER has a corresponding dimension for emotions in emotional attachment (E) (Berrone et al., 2012). Originally, the dimension was referred to as encompassing the role taken on by emotions in the context, which are known to exert influence over virtually all parts and processes of the family firm, from succession planning to stakeholder relations

(Morgan & Gomez-Mejia, 2014). This dimension has also been linked to the reputational aspect of the family firm (Martin & Gomez-Mejia, 2016). Similarly, to the FIBER dimension of identification, the boundary between the family members and the firm are blurred in terms of reputation. Thus, the family members’ drive to preserve a good image extends to both the family and the firm. Furthermore, the drive to maintain reputation has been positively linked to performance and corporate social responsibility (Martin & Gomez-Mejia, 2016). Swab et al. (2020) categorize emotional attachment as another source of willingness for family firms to support SEW goals (Figure 1).

The final dimension, renewal of family bonds through dynastic succession (R), is connected to the practice of intra-family succession, one of the key traits of family firms (Berrone et al., 2012). The goal of preserving the firm and the controlling family’s influence over it through subsequent generations has been shown to be a defining trait of family firm decision-making (De Massis et al., 2008; Sund et al., 2015). Consequently, exit strategies in times of performance decline have been shown to be a last resort measure for family firms. In a bid to preserve SEW derived from continued succession in the family, family firms avoid exit strategies where non-family firms would not (Chirico et al., 2020). Furthermore, the question of the generation in control has also been the subject of interest for research, with the “R” dimension positively relating to firm performance predominantly in the case of the founder generation (Martin & Gomez-Mejia, 2016). A focus on the preservation and increase of SEW in general has also been shown to diminish as the baton of family control is passed to subsequent generations of the family (Gomez- Mejia et al., 2011). Swab et al. (2020) consider this dimension to be the other necessary component of SEW that, together with family control, comprise the ability of family firms to allow for the preservation and pursuit of SEW (Figure 1).

The FIBER construct has seen recent application in research seeking to understand the differences in family and non-family decision-making during the crisis situation caused by the global financial crisis (Rivo-López et al., 2020). As our research looks at family firms in the context of the COVID-19 pandemic and the crisis it has triggered, we proceed by discussing these topics in the next section.

2.5 Crises in Family Businesses

2.5.1 Crisis Management in Family Businesses

A crisis can be identified as a sudden event that changes a system and its individual components (Kraus et al., 2020). The literature further attributes several common features to organisational crises (Runyan, 2006). While the probability of occurrence may be low, in a worst-case scenario, the crisis may potentially threaten the very existence of a company (Dutton & Jackson, 1987; Witte, 1981). In addition, numerous stakeholders are affected and an acute crisis forces decisions to be made quickly (Hills, 1998; Pearson & Clair, 1998).

According to Kraus et al. (2020) a basic distinction regarding the type of crisis is whether it is caused internally by a company (Bundy et al., 2017) or by external factors such as natural disasters (Runyan, 2006). Furthermore, it should be mentioned that crises can also have positive effects for stakeholders. The external stimulus of a crisis can lead to innovations or even to an entry into new markets (Faulkner, 2001). Apart from the COVID-19 crisis detailed below, another prominent example for an external crisis is the Great Recession, an event which was brought about due to the enormous downward trend in the economy from 2007 to 2009 as a result of the global financial crisis (Rivo-López et al., 2020).

The topic of how family firms fare during crises in comparison to their non-family peers has also garnered attention from researchers in connection to both the global financial crisis, and more recently, the COVID-19 pandemic. Family firms have been consistently shown to tackle crisis situations and make decisions in ways that differ from non-family companies (Casillas et al., 2019; Chirico et al., 2020; Faghfouri et al., 2015; Kraus et al., 2020; Minichilli et al., 2016). When compared to non-family firms, family firms have also been proven to be a source of higher job stability and support for employees (Kraus et al., 2020; Rivo-López et al., 2020) and are able to apply retrenchment more flexibly and dynamically during a crisis (Casillas et al., 2019). However, family businesses have also been noted to employ formalized crisis procedures less frequently when family ownership is higher (Faghfouri et al., 2015). The question of family firms performing better or worse than non-family ones during a crisis seems to be unresolved with research presenting results in support of both possibilities (Arrondo-García et al., 2016; Minichilli et al., 2016). Chirico et al. (2020) argue that family firms are unlikely to pursue an exit

strategy due to deteriorating performance relative to their non-family counterparts. The authors see the reasons for this in the fact that family businesses draw more strongly on non-financial benefits while also aiming to ensure succession.

Furthermore, family firms show a tendency to plan both in terms of short-term challenges, by securing liquidity as well as to keep the long-term security of the firm in focus (Kraus et al., 2020). These traits reflect the values and goals driving family firm decision-makers that go beyond only financial aspects (Gomez-Mejia et al., 2011). Thus, the SEW approach has also been applied in studies investigating the relationship between family firms and crises (Casillas et al., 2019; Rivo-López et al., 2020). Rivo-López et al. (2020) as well as De Massis and Rondi (2020) specifically call for future research to focus on the recent crisis situation brought about by the COVID-19 pandemic and its effect on family firms. As outlined above we intend to answer this call using a SEW-based approach.

2.5.2 COVID-19

In the following, we provide a brief overview of the crisis situation that acts as the backdrop for our research. We continue with a short description of the events unleashed by the pandemic.

The origins of COVID-19 can be traced back to Wuhan, China. By December 2019, there was an increase in unexplained pneumonia cases in the city that could not be ascribed to a pre-existing disease (WHO, 2020a). As a local seafood market appeared to be linked to the sudden outbreak it was shut down by Chinese officials shortly after (Huang et al., 2020). The Chinese government announced that the virus had been identified as a new type of coronavirus which can easily spread from one person to another (WHO, 2020b). The first deaths associated with the virus were confirmed and the entire Hubei province was put under quarantine (Moosa, 2020; WHO, 2020a). In Europe, the first COVID-19 patient was identified at the end of January, coinciding with a similar situation in many other countries around the world (WHO, 2020c). Consequently, on January 30, 2020 the WHO (World Health Organisation) declared “the outbreak to be a public health emergency of international concern” (WHO, 2020d, p. 1). By March 11, 2020 COVID- 19 was classified as a pandemic (WHO, 2020e) by exceeding the classification of an epidemic as it impacted a large number of individuals beyond international borders (Porta et al., 2014). After Italy and Spain were initially hit hard by the virus in Europe and both

countries imposed a total lockdown, rising infection figures in other countries also led to the adoption of stricter measures to contain the virus (Giritli Nygren & Olofsson, 2020; Kraus et al., 2020). This led to a severe restriction of public and private life. After a temporary decline during the summer, infection levels rose again in a second wave in many European countries during the winter, resulting in related stricter measures. By December 2020, the first vaccines were approved (Warren & Lofstedt, 2021).

The restrictive measures taken by the national authorities in response to COVID-19 led to enormous disruptions in the economy (Anderson et al., 2020). According to Kraus et al. (2020) it is already clear that the COVID-19 crisis is not only a severe economic crisis but also the catalyst for the largest global recession since the Great Depression. Thus, it is associated with a global increase in unemployment rates accompanied by the potential destabilization and collapse of entire industries. While some firms have been able to forge unique opportunities out of the crisis, others had to forfeit high revenues due to government-induced closures and disrupted supply chains (Kraus et al., 2020).

2.5.3 Government Responses to COVID-19: Sweden and Germany

As Kraus et al. (2020) outline governments displayed urgency to contain the virus through different measures. Studies on the necessity of various non-pharmaceutical interventions, such as domestic case isolation, social distancing measures or closure of nonessential businesses or institutions, indicate that a combination of diverse non-pharmaceutical interventions is essential to prevent the health system from collapsing in the light of COVID-19 (Ferguson et al., 2020; Hale et al., 2020; Moosa, 2020; Yan et al., 2020). These measures aim to reduce social contacts as much as possible with the goal of flattening the infection curve to ease the burden on the health care system and to buy time to develop a vaccine (Moosa, 2020). Measures included cancelling major events, imposing travel restrictions and bans, closing schools and universities, closing restaurants and hotels as well as shutting down companies that operate for instance in the leisure industry (Hale et al., 2020; Yan et al., 2020).

Most of Europe has reacted in a more or less unified way regarding the implementation of compulsory restrictions (Kraus et al., 2020; Moosa, 2020; Yan et al., 2020). However, Sweden can be considered as an exception to this case since it decided to adopt recommendations instead of severe restrictions (Giritli Nygren & Olofsson, 2020; Kuhlmann et al., 2021; Yan et al., 2020).

The international press has often criticized Sweden’s COVID-19 approach for being irresponsible, controversial and too soft (Giritli Nygren & Olofsson, 2020; Granberg et al., 2021). However, others like Granberg et al. (2021) consider this to be a misrepresentation. For instance, Sweden periodically closed educational institutions, advised the elderly for self-isolation, limited public meetings to 50 people, advised to refrain from traveling and recommended professionals to work from home whenever possible (Giritli Nygren & Olofsson, 2020; Granberg et al., 2021; Yan et al., 2020). Nevertheless, the major difference remaining compared to other European countries are that most aspects of the Swedish approach are based on recommendations instead of compulsory rules (Kuhlmann et al., 2021). Yan et al. (2020) classify Sweden’s COVID- 19 approach as a nudging strategy which is characterized by the aim of modifying behaviours in such ways that the implementation of prohibitions is not necessary.

Within the scope of our thesis, we are interested in how Sweden’s unique and rather liberal laissez-faire response to the COVID-19 crisis may have impacted Swedish family businesses prioritization of the SEW dimensions compared to another European country pursuing a rather authoritarian approach by enforcing legally binding measures. For this purpose, we have chosen Germany. The German COVID-19 response was mainly determined by concrete restrictions suspending many civil liberties and basic rights. In order to ensure that citizens comply with the measures, disobeying them would result in sanctions and penalties. Measures included lockdowns, closure of schools and universities and obligatory face mask usage. The severity of the restrictions was often modified in accordance to shifts in the infection figures, resulting in a “stop and go” approach. Furthermore, the sometimes patchwork-like nature of the German execution of laws meant that judgment regarding implementation was left to the discretion of each individual federal state. This in turn, subsequentially led to different restrictions being put in place in different states (Kuhlmann et al., 2021).

Kuhlmann et al. (2021) support our decision of comparing Germany and Sweden as the countries are similar in their basic structural characteristics but have reacted rather differently to the exact same external stimulus being COVID-19. Our goal is not to identify whether one approach is better than the other but to find out whether the different framing of the crisis has impacted the handling of the crisis in family businesses in both countries. Additionally, it has been pointed out in recent research concerning family

firms’ decision-making that the political and economic context of countries has been underutilized as a point of reference (Llanos-Contreras et al., 2020). With this in mind, our approach of using two countries with differing governmental responses to the pandemic, further helps in filling a gap in research concerning SEW and its FIBER dimensions.

A recent study of note that looks at how different governments deal with the crisis caused by the pandemic has done so using a prospect theory based lens (Hameleers, 2021). The study focuses on the concepts of loss and gain-framing and their use by governments in how they react and communicate the crisis to the public. They associate gain-frames, that is framing the situation and the choices the individual has in a way that emphasizes positive outcomes such us the lives saved with risk-aversive strategies in combating the pandemic. Risk-aversive in this context is described as the approach that aims to preserve the status quo (Hameleers, 2021; Tversky & Kahneman, 1981). Hameleers (2021) further adds that a gain-framing is also associated less with changing the emotional states of the public. Thus, following this reasoning we can link Sweden to a gain-framing of the pandemic, as their initial response and strategy relied on preserving the pre-pandemic status quo. The country framed the situation as a “marathon” where the actions of the individuals can help save lives, but have to do so over an extended period of time through consistent but sustainable milder restrictions (Yan et al., 2020).

This differing approach can also be observed in the OxCGRT (COVID-19 Government Response Tracker) by Hale et al. (2020), a systematic tool used to trace and visualize government measures related to COVID-19 over time. Even if the data provided by Hale et al. (2020) is not ideally suited to compare Sweden and Germany as the authors treat restrictions and recommendations homogeneously, the “heat map” of the OxCGRT visualizes the unique nature of the Swedish response over time very accurately.

Conversely, a loss-framing of the situation that is focused on the potential loss of life caused by the pandemic is associated with negative emotions and a sense of fear and powerlessness. As Hameleers (2021) points out, if a loss-framing triggers this sense of powerlessness and fear, it will cause an increase in the support for stricter governmental intervention and measures. Based on the previously described German approach to the crisis, we link the picture of the crisis the German government has communicated to their public to a loss-framing. As a result of this approach German family firms may have

experienced the associated negative emotions that could be potentially triggered by the loss-framing. Hameleers (2021) adds that if these negative emotions are triggered, they can influence decision-making during the pandemic. Swedish family firms, on the other hand, may have been impacted less emotionally due to their government’s framing having closer ties to a gain framing.

In summary, our approach incorporates the factor of differing governmental framings and responses to the crisis situation brought about by the pandemic in order to investigate if and how they influence family business decision-making and SEW prioritization by simultaneously studying German and Swedish family firms over a three-year period. Previous research shows that the political context impacts family firm decision-making (Llanos-Contreras et al., 2020). Furthermore, research focusing on the effects of differing governmental framings of the crisis situation caused by the pandemic has shown that a loss-framing of the situation, for example illustrating the situation through the potential loss of life, is associated more with feelings of powerlessness and fear. This in turn may lead to stricter measures being applied and supported (Hameleers, 2021). On the other hand, a gain-frame that characterizes the situation and the potential course of action through the number of lives that can be saved by taking on certain measures was associated with more support for risk-aversive interventions. Thus, these findings link the effect of differing governmental restrictions and framing of the crisis to differing impacts on emotional states. We intend to investigate if these differing governmental restrictions will affect SEW and which FIBER dimensions are prioritized by family firms during the crisis.

2.6 Propositions and Model Construction In the previous literature review, we first covered the overall topic of family businesses, noting their unique status as the most widespread form of business worldwide. We furthermore have also discussed how family firms have been shown to make decisions using not only financial performance as their frame of reference, but rather that of family specific non-economic goals (Gomez-Mejia et al., 2011). Given the heterogeneity of family businesses as well the nature of their relationship to outside stimuli, it has been shown that there is still ample room for new research. We intend to contribute to the literature discussing the phenomenon of family firm decision-making through the lens of SEW as conceptualized through the FIBER dimensions.

Specifically, we take on an approach that relies on the concept of SEW, as it has been conceptualized from its inception to help explain the drivers of family firm decision- making (Gómez-Mejía et al., 2007). SEW broadly defines these drivers as the affective utilities of family firms. The concept has repeatedly been the subject of calls for better operationalization in research, which we intend to answer by using a recently proposed version of the FIBER model (Swab et al., 2020). This approach not only breaks SEW down into the five FIBER dimensions, but builds on previous critiques of the construct, also categorizing them as either necessary or sufficient factors in contributing to the willingness and ability of family firms to preserve and pursue SEW. We incorporate this approach not only to formulate our definition for family businesses, but also use it as the basis of our proposed model as its framing of the FIBER dimensions accounts for both family firm heterogeneity and for the relationship between the dimensions themselves.

Furthermore, SEW and its dimensions as expressed through FIBER have recently been shown to potentially shift over time (Cleary et al., 2019). Further, it has been suggested that the FIBER dimensions might be affected by outside stimuli, a relationship that is yet to be explored in research. Particular attention in this case should be paid to crises such as the one initiated by the COVID-19 pandemic (De Massis & Rondi, 2020). A similar notion has also been expressed by Swab et al. (2020) who propose that the family firms’ prioritization of the FIBER dimensions shift dynamically and differ between firms. Our proposed model is illustrated in the figure below (Figure 2).

Figure 2: SEW crisis model (own elaboration based on Gomez-Mejia et al., 2011 and Swab et al., 2020)

The study follows a content analysis approach in line with the one utilized by Cleary et al. (2019), looking at statements to shareholders in annual reports published by publicly listed family firms. We postulate that the FIBER dimensions, as expressed through the annual reports, will not be all present in a stable form over the studied time period of three years, but will change dynamically. Furthermore, we study family firms facing a crisis situation due to the topic’s continued relevance both in connection to family firms and the COVID-19 pandemic (De Massis & Rondi, 2020; Kraus et al., 2020). We have already discussed how the FIBER dimensions have been demonstrated to potentially shift over time without the influence of a crisis on the scale of the pandemic (Cleary et al., 2019). This change over time has also been shown to differ on a firm-to-firm basis, even when controlling for several contingency factors at once, further giving credit to family firms being heterogenous (Cleary et al., 2019). On the other hand, family firms facing a crisis have shown to behave differently than their non-family peers. Previous research concerning the effects of a crisis situation on family firms has attributed this differing behaviour to their SEW-guided decision-making (Casillas et al., 2019; Faghfouri et al., 2015; Rivo-López et al., 2020). However, for the most part these studies treat SEW and its dimensions as stable constructs that do not change over time. It has further been noted how a focus on SEW-based priorities diminishes as the firm is passed down through multiple generations and how the focus from SEW may shift to a focus on traditional financial goals when the crisis hits (Minichilli et al., 2016; Rivo-López et al., 2020). How specific dimensions of SEW shift in response to a given crisis has yet to be explored, the relevance of which has been recently brought into focus in connection to the severity of the COVID-19 pandemic (De Massis & Rondi, 2020). The crisis has put an immense emotional pressure on family firms. Early studies have shown the roots of cultural change taking place in response, with solidarity driving the relationship between the family and its stakeholders (Kraus et al., 2020). On the other hand, De Massis and Rondi (2020) highlight the potential negative effects the pandemic may have on the SEW of family firms, as they are forced to make decisions that can undermine several of its dimensions. Thus, we propose that family firms will prioritize and put emphasis on certain aspects of their SEW corresponding to specific FIBER dimensions when faced with a crisis. Our approach of using content analysis allows us to observe this change in prioritization through looking at the communication conducted by the firms in their annual reports. Following previous research in this approach (Cleary et al., 2019) we assign specific

phrases and expressions to corresponding FIBER dimensions to measure how the focus on these dimensions shifts before and during the crisis period. Thus, we suggest that the crisis generated by the pandemic will result in a shift in the prioritization of the FIBER dimensions that determine the willingness and ability of family firm decision-makers to pursue and preserve SEW. We further propose that this shift will cause certain dimensions of SEW to come to the forefront during the crisis, while other dimensions will be less prevalent, as expressed by the family firms’ communication through their statements to shareholders in their annual reports. We test these assumptions in the context of family firms in two different countries, Sweden and Germany. Doing so we are able to compare our results to see the possible effects the different governmental responses may have caused for each respective country’s prioritization of the FIBER dimensions. This allows us to answer both our research questions. This relationship is also shown in our own proposed model (Figure 2). With this in mind, we arrive at our first proposition.

Proposition 1: The crisis will impact the prioritization of the FIBER dimensions.

The following propositions are formulated based on our predictions on how the prioritization of the FIBER dimensions of SEW will be impacted by the crisis. We formulate these propositions following the willingness and ability categorisations of the FIBER dimensions (Swab et al., 2020). We begin with discussing our assumptions connected to the ability dimensions of family control and influence (F) and renewal of family bonds through dynastic succession (R). This is then followed up by the discussion of our proposition tied to the willingness dimensions of family members’ identification with their firm (I), binding social ties (B) and emotional attachment (E). We conclude by outlining our proposition related to how SEW may be prioritized differently during the crisis between Swedish and German family firms.

In their content analysis coding scheme concerning the FIBER dimensions Cleary et al. (2019) assign elements concerned with family members making decisions, facing issues and references to their appointments or resignations from the board or managerial positions to the dimension of family control and influence (F). In their study, which was focused on a period devoid of any major crisis on the scale of the current one, they found the “F” dimension to appear only at low levels. Furthermore, crisis situations have been proposed to unite the efforts of family owners and push regular points of contention between them to the side-lines even in cases of dispersed family ownership structures

(Minichilli et al., 2016). Swab et al. (2020) propose that this dimension is necessary for SEW to exist within a firm. Its existence, however, only provides the ability for SEW to be pursued and does not by itself indicate that SEW preservation and pursuit will be the goal of family firm decision-making. They further add that this dimension as a result would not be one to change and be prioritized by family firms as a reaction to different contingencies. Thus, we propose that the dimension of family control and influence will be prioritized less by family firms during the crisis period and thus will not be impacted by the crisis.

The dimension of renewal of family bonds through dynastic succession (R) was shown in Cleary et al.’s (2019) work to be the one with the consistently lowest representation among all five FIBER dimensions across the studied firms. We expect this dimension to possibly receive even less attention in the reports published during the crisis. Succession in family firms has already been shown to rely on the existence of several factors to succeed, while also being threatened by a multitude of potential pitfalls, even without the looming threat of a crisis situation (De Massis et al., 2008). Furthermore, necessary preparations and willingness on both the incumbent’s and potential successor’s side have been shown to be needed for a well-executed succession (Sund et al., 2015) which could potentially be interrupted by the sudden onset of the crisis. Finally, like in the case of the dimension of family control, we expect this dimension to fall in priority for family firms during the crisis period due to it contributing only to the ability of firms to purse SEW and not the willingness to make SEW-focused decisions (Swab et al., 2020). These points combined with the already low level of attention both ability dimensions have received in previously studied reports lead us to the proposition that the crisis will not impact family firms’ prioritization of the ability dimensions of “F” and “R”.

Proposition 2: The crisis will not impact the prioritization of the ability dimensions of family control and influence and renewal of family bonds through dynastic succession.

Next, we move on to the willingness dimensions. In the conditional FIBER model of Swab et al. (2020) dimensions falling under the willingness category are proposed to be the drivers behind family firm heterogeneity. They are outlined as being more likely to shift and differ over time as different dimensions are prioritized in response to different contingencies.

Cleary et al. (2019) found the dimension of family members’ identification with their firm (I) to be the most prevalent and second most prevalent in the two firms they studied respectively. They further link this dimension to elements in the reports that illustrate the day-to-day operational role of the family as well as its history and even family bereavement. As family business crisis literature has shown the dimension of family identification plays a key role in the unique response that family firms have to crisis situations. It has been attributed as one of the drivers behind family firm job stability during crises (Rivo-López et al., 2020). Furthermore, family firms have already been shown to respond to the crisis caused by the pandemic through a strong push for solidarity between them and their employees and suppliers, resulting in cultural change that strengthened bonds to the firm (Kraus et al., 2020).

The dimension of binding social ties (B) has similarly been shown to be both a dominant element in the chairman’s statements studied by Cleary et al. (2019) and a driver behind family firms’ crisis management approach (Rivo-López et al., 2020). Like the previous dimension we expect binding social ties to have a potentially more dominant role for family firms during the crisis. This would line up with the earlier observed increase in employee commitment during the crisis (Kraus et al., 2020) as well as the perceived importance and SEW-related value family firms derive from sustaining and strengthening their ties to employees during a crisis in order to preserve their long-term vision (Rivo- López et al., 2020).

While the dimension of emotional attachment (E) has been shown to appear in a low amount over the observed period in the work of Cleary et al. (2019), we expect this dimension to be potentially pushed to the forefront during the crisis. In their coding scheme Cleary et al. (2019) tie this dimension to the element of emotive expressions aimed at threats or competitors and the element of the family in relation to decision- making choices. Emotions have been shown to permeate through family members’ decision-making, which combined with family members’ close identification with the firm often mean that these emotions closely affect the firm itself (Gomez-Mejia et al., 2011; Morgan & Gomez-Mejia, 2014). Furthermore, as family firms often rely on their unique culture that stems from the controlling family’s values and influence (Hall & Nordqvist, 2008), we expect that the cultural change that is generated as a reaction to the

crisis (Kraus et al., 2020) will also result in the accompanying emotions to be expressed in the studied reports.

With these points in mind, we propose that the SEW of family firms during the crisis will be impacted through their prioritization of the willingness dimensions of family members’ identification with their firm (I), binding social ties (B) and emotional attachment (E).

Proposition 3: The crisis will impact the prioritization of the willingness dimensions of family members’ identification with their firm, binding social ties and emotional attachment.

As outlined in section 2.5.3, we associate Sweden’s COVID-19 response with gain- framing due to their recommendation-based approach that highlighted and relied on individual responsibility, also described as conceptualizing the crisis as a “marathon” (Yan et al., 2020). This comparison referred to its long duration that would need measures that are acceptable over a longer period. Sweden’s approach is characterized by the intention to preserve its status quo as a nation whose government does not hold the right to directly restrict the freedom of the individual (Granberg et al., 2021; Kuhlmann et al., 2021). Sweden can be said to have employed a risk-aversive course of action to deal with the crisis, thus potentially affecting which dimensions of SEW Swedish family firms focus on during the crisis, due to this approach being associated with less of an emotional response (Hameleers, 2021).

In contrast, Germany has employed strict restrictions with a more authoritarian approach involving fines and sanctions. We associate their approach with a loss-framing of the crisis situation that potentially leads to a higher level of fear and powerlessness, as this, in contrast to a gain-framing, has been shown to impact emotional states more. This potentially affects which dimensions of SEW family firms prioritize (Hameleers, 2021; Kuhlmann et al., 2021; Swab et al., 2020). We use these previous points regarding the governmental framing of the crisis, to construct our final proposition of the crisis having a different effect between the family firms of the two countries.

Proposition 4: The prioritization of the FIBER dimensions will differ when comparing Swedish and German family firms during the crisis.

We conclude this section with an overview of our propositions below in Table 2.

Propositions

1 The crisis will impact the prioritization of the FIBER dimensions.

The crisis will not impact the prioritization of the ability dimensions of family control and influence 2 and renewal of family bonds through dynastic succession.

The crisis will impact the prioritization of the willingness dimensions of family members’ 3 identification with their firm, binding social ties and emotional attachment.

The prioritization of the FIBER dimensions will differ when comparing Swedish and German family 4 firms during the crisis.

Table 2: Summary of propositions

3 Methodology

______

In the following chapter, the methodology on which this thesis is based is discussed and connected to the purpose. The chapter is divided into seven sections. First, the research philosophy is explained followed by the research approach. Subsequently, the research strategy is presented. After that, we proceed with the description of the sample selection and data collection as well as the data analysis procedure. We conclude our methodology section by reflecting on research quality and research ethics. ______

3.1 Research Philosophy The term research philosophy relates to the underlying belief system or worldview behind a given research. In the following we will not only detail our chosen method, but also the ontological and epistemological framework we employ (Easterby-Smith et al., 2018; Saunders et al., 2016). According to Easterby-Smith et al. (2018) ontology can be considered as being the centre of research philosophy and is regarded as the initial stage for philosophical discussions. It contains fundamental assumptions of the nature of reality and assists in clarifying how we believe the world to be. Ontological positions ranging from realism to nominalism can be visualized as being on a continuum, where aforementioned positions are located on either end. Whereas realism supposes the world to exist irrespective of the viewer’s perception about it, nominalism argues contrarily that reality is man-made and thus cannot exist independent of the observer (Easterby-Smith et al., 2018; Saunders et al., 2016). Between these two positions on the continuum lie internal realism located closer to realism and relativism closer to nominalism. While internal realism still keeps the assumption that reality is independent from the one viewing it, it diverges from realism through the belief that access to that reality is indirect for the viewer. Finally, relativism assumes that the observed phenomena will itself be dependent upon the perspective it is observed from (Easterby-Smith et al., 2018).

After determining which ontological position to take with respect to the nature of reality, it is necessary to elucidate how best to investigate the nature of reality. This is where epistemology comes into play, which concerns the nature of knowledge as well as the assumptions about possibilities of enquiring it. Embedded in the epistemology are the two opposing standpoints of positivism and social constructionism. While positivists share

the belief of an externally existing world whose attributes can be quantified by objective measures, social constructionists are of the opinion that reality is determined by individuals and their personal sense-making mechanisms instead of being determined by objective outside factors (Easterby-Smith et al., 2018; Saunders et al., 2016).

In Chapter 2 we have highlighted the underlying theoretical implications related to our topic. Since the foundation of our research is the previous existing literature in the field of family business, our approach falls closer to a realist one in ontological terms. Furthermore, in our literature review we looked at SEW and its FIBER dimensions as well as the impact of COVID-19 and the resulting differing governmental responses. Hence, based on prior literature we came up with an extended SEW model that accounts for the effect a crisis has on the FIBER dimensions. By means of this model we have built a framework through which we intend to examine and observe the world from an external perspective. We adopt the role of an outside evaluator. However, we also access the reality that we intend to observe through indirect means by analysing secondary data, specifically the statement to shareholders sections of annual reports published by family firms. The indirect nature of this approach means that ontologically we fall under internal realism. We plan to investigate the topic quantitatively through objective methods to evaluate our propositions. Thus, from an epistemological viewpoint we find ourselves belonging to positivism (Easterby-Smith et al., 2018). In line with this internal realist and positivist approach, we formulated several propositions which we investigate quantitatively through the use of quantitative content analysis. Furthermore, we also supplement this data with additional insights gained from qualitative data which further matches our internal realist and positivist approach (Easterby-Smith et al., 2018). We are interested in discovering how the contingency of a crisis effects the prioritization of family firms’ SEW dimensions. As we outlined earlier treating SEW and its FIBER dimensions as a dynamic concept that is affected by outside contingencies is a relatively new approach. The topic of the COVID-19 pandemic’s effects on family firms is an equally under researched subject due to the still ongoing nature of the pandemic. Thus, we aim to delve deeper into a combination of topics which remains largely unexplored, making the nature of our research exploratory at its core (Saunders et al., 2016).

Our chosen method allows us to conduct a clearly outlined replicable study through which we are able to observe a variety of family firms both before and during the crisis period,

adding a longitudinal dimension. This in turn, makes the time horizon of our research longitudinal. Finally, the data we collect through our content analysis is then subjected to statistical data analysis and the results are supplemented by additional insights gained from the content of the statements.

3.2 Research Approach After considering the research philosophy in the previous part, the following section is dedicated to the topic of a suitable research approach. Generally, literature concerning the topic outlines three different approaches, namely deductive, inductive and abductive working procedures (Saunders et al., 2016). When using a deductive approach, the emphasis is on testing an existing theory. Hypothesis testing is a commonly used example of this approach. Here hypotheses are created based on theoretical insights established by preceding literature. In testing, statistical methods are then applied which result in a validation or denial of the hypothesis under consideration. In contrast to deductive approaches, the main focus of an inductive method is to generate novel theory from the collected data sets. In this case, blocks of themes or patterns are then specified on the basis of the collected data with the aim of developing a new theory. Similarly, an abductive approach may also seek to generate new theory but can also modify and combine existing ones. Abduction works by collecting data in order to gain insight into a phenomenon, using the results to construct new frameworks and theory and consequently test them further (Easterby-Smith et al., 2018; Saunders et al., 2016).

As part of our literature review, we looked at all essential concepts for our topic, from family businesses to SEW, the related FIBER dimensions, external crises such as COVID-19 and the resulting government responses. On this foundation, we proposed an extended model and formulated our propositions. As previously mentioned, this procedure is in line with the concepts of internal realism and positivism. Furthermore, based on the above detailed alternatives our research approach can be considered to be a deductive one as we formulated our propositions on already existing theory and seek to test them through our research (Easterby-Smith et al., 2018; White & Marsh, 2006). Furthermore, our statistical analysis involves hypothesis testing in connection to the non- parametric tests we conduct on the data collected from our content analysis. While hypothesis testing does occur for determining statistical significance, the hypotheses themselves are not specified as the context for the relationships being tested are provided

by the research questions and our propositions, an approach which is in line with conventional research literature suggestions (Saunders et al., 2016).

To summarise our methodological approach, we present the figure below.

Figure 3: Research onion (own elaboration based on Saunders et al., 2016)

3.3 Research Strategy When using a quantitative approach the focus is typically on surveys or experiments (Easterby-Smith et al., 2018). However, alternative methods are also an option such as content analysis (White & Marsh, 2006). With the help of a survey, researchers aim to quantitatively describe the characteristics and behaviours of a population through selecting a suitable sample that answers and rates a set of descriptive questions and other items (Creswell & Creswell, 2017; Easterby-Smith et al., 2018). In contrast, experiments are utilized to manipulate individual variables to examine the implications resulting from this manipulation (Creswell & Creswell, 2017). In content analysis, data sets such as

interview transcripts, websites or internal business journals are analytically and systematically searched by means of previously defined codes to put the data into context (Cleary et al., 2019; Krippendorff, 2019; Weber, 1990; White & Marsh, 2006). Content analysis itself can be either qualitative or quantitative in nature (White & Marsh, 2006). A qualitative content analysis approach is inductive in nature, involving multiple rounds of coding without the use of predetermined categories, instead opting to let the categories emerge during the coding process. It may also incorporate triangulation and other sources of data to gain a deeper understanding, with the potential for developing new theory. On the other hand, quantitative content analysis embodies a positivistic, deductive approach using predetermined categories and statistical hypothesis testing, aiming to study frequency and relative importance of the different elements falling into these categories. Thus, our approach falls under the category of a quantitative content analysis, due to our use of predetermined categories and our overarching deductive approach involving statistical analysis (White & Marsh, 2006). However, in line with our internal realist and positivist approach, we additionally use insights gained from qualitative data obtained from the statements that are the subject of our content analysis.

In the theoretical background we proposed our model that accounts for the outside influence of a crisis and formulated four propositions. As our first research question is designed to compare the SEW prioritization of family businesses before versus during the COVID-19 crisis, it was clear that we needed to rely on longitudinal data. Thus, we have refrained from conducting a survey or an experiment as a variety of biases can arise when an individual is asked to go back in time, in our case to a time before the COVID-19 pandemic. A more suitable alternative was thus the quantitative content analysis of secondary data in order to avoid the aforementioned problem. A further advantage of quantitative content analysis is that the approach ensures that findings do not depend on the researchers’ authority and thus can be easily replicated. By relying on already available published sources, it also sets the stage for longitudinal studies to be conducted. Since its inception content analysis has also been shown to be a method that produces valid results through the use of a wide variety of different techniques (Weber, 1990). Altogether, these points ensure not only validity for content analysis, but also mean that the method is reliable and allows for replicability (Weber, 1990; White & Marsh, 2006).

Content analysis has been shown to be a suitable approach to studying SEW and its FIBER dimensions as a dynamic construct on a longitudinal time horizon (Cleary et al., 2019). Furthermore, our method of choice is underutilized both in the general realm of family business research and in connection to the topic of SEW (Berrone et al., 2012; Cleary et al., 2019). Thus far, we have only encountered a single other research paper that adopted content analysis to investigate SEW and its FIBER dimensions, by analysing two breweries over a period of 23 years (Cleary et al., 2019). This is especially surprising given that the original proposition of the FIBER dimensions were accompanied by the explicit recommendation that future research utilize content analysis to further the concept (Berrone et al., 2012). Thus, we not only fill a gap in research by utilizing this method to study SEW but do so in a way that builds on the original recommendations relating to furthering FIBER literature.

Using the content analysis method we follow the ten steps of content analysis (White & Marsh, 2006) as seen in Table 3 below.

The ten steps of quantitative content analysis

1. Establish hypotheses or propositions 2. Identify appropriate data (text or other communicative material) 3. Determine sampling method and sampling unit 4. Draw sample 5. Establish data collection unit and unit of analysis 6. Establish coding scheme 7. Code data 8. Check for reliability of coding and adjust coding process if necessary 9. Analyse coded data, applying appropriate statistical test(s) 10. Write up results Table 3: The ten steps of quantitative content analysis (own elaboration based on White and Marsh, 2006)

As shown in Table 3, hypothesis development is the first step, our approach however incorporated the establishment of propositions in this step as it better fit both our internal realist and positivist approach (Easterby-Smith et al., 2018). The use of propositions was also preferred given the novelty of the combination of the topic of SEW with the selected method, having found only one other content analysis using a FIBER framework (Cleary

et al., 2019). Furthermore, the effects of a crisis on the prioritisation of the FIBER dimensions is also yet to be explored.

The second step is to identify suitable data (White & Marsh, 2006). Building on the work of Cleary et al. (2019) our choice fell on the statement to shareholders included in the annual report of publicly listed family firms. However, as the number of firms we are analysing is considerable higher than in Cleary et al.’s (2019) analysis of breweries, we expanded upon their approach to include a wider variety of statements. This is given further legitimacy when considering family firm heterogeneity as not all family firms publish chairman’s statements. Thus, the statements to shareholders we analyse from the annual reports will vary regarding the executive position of their authors by not only including chairman’s statements but also extending beyond to include CEO’s statements. Analysis of the statements to shareholders provide a diverse look into a firm’s given situation as those statements are not only addressed directly to the shareholders but also contain important corporate news and provide a summary of the business content discussed in the annual report (Balata & Breton, 2005). Moreover, those statements are also among the most read parts of the annual report and thus reflect an essential element of communication (Bartlett & Chandler, 1997). Hence, it is not surprising that according to Cleary et al. (2019) quantitative content analysis of these statements is ideally suited for testing whether FIBER dimensions are present and how they change over time.

The third and fourth steps of quantitative content analysis are devoted to determining the sample. In the context of this study, we identified 20 German and 20 Swedish publicly listed family businesses whose statements to shareholders published in their annual reports we analysed over a three-year time span. The detailed approach in constructing the sample is discussed in section 3.4. As part of the fifth step, establishing the data collection unit and unit of analysis, we have determined our data collection unit to be the statement to shareholders and its individual paragraphs as our unit of analysis. As we are dealing with topics instead of a specific wording it is recommended that we rely not on coding software but on manual coding (Moreno & Cámara, 2014). We conduct our research in line with this recommendation, employing manual coding evenly divided between two coders.

The sixth step concerns establishing the appropriate coding scheme. It is essential that the coding scheme is developed before the actual coding begins (Weber, 1990; White &

Marsh, 2006). Further, it is important to note that the coding scheme must be able to answer the research questions and evaluate the propositions (Weber, 1990; White & Marsh, 2006). We rely on and modify the already existing coding scheme by Cleary et al. (2019) as it accounts for each of the FIBER dimensions. This method of adopting and modifying an already existing coding scheme has been suggested by Krippendorff (2019). Our additions to the coding scheme concern the dimension of identification of family members with the firm. Here we added the element of including not only products that shared a name with the family, but also initiatives and services that did the same in order to account for the cross-industry approach we used. The full coding scheme can be found in Appendix 2. Furthermore, due to the prevalence of paragraphs coded with the dimension of emotional attachment in connection with the element of emotive language against an outside threat we consulted additional literature in the topic. This literature regarded emotive language and the role of metaphors which we used to improve our consistency and reliability in what we coded as falling under this dimension through this element (Ho & Cheng, 2016; Johnson-Laird & Oatley, 1989).

The seventh step deals with the actual coding of the data. Our counting unit is the relative frequency of a FIBER dimension, with one paragraph corresponding to one or more FIBER dimensions based on its contents. Following Cleary et al. (2019) a specific paragraph can potentially relate to multiple dimensions if it corresponds to several of the dimensions based on our coding scheme. Paragraphs that did not refer to any dimension were excluded in the analysis. As part of the eighth step, to account for coding reliability, we conducted a preliminary coding run with both coders coding twelve annual report statements independently. Thus, we checked for potential differences that could arise in interpreting the data with the purpose of harmonizing our approaches and changing the coding scheme accordingly (Cleary et al., 2019). The nineth step, the procedure of analysing the coded data with suitable statistical measure is discussed in section 3.5. The findings are presented in Chapter 4 and are discussed in Chapter 5 in connection to the tenth step of the quantitative content analysis process.

3.4 Sample Selection and Data Collection As the aim of our study is to analyse how a crisis affects the prioritization of SEW through its FIBER dimensions and how the context of differing governmental restrictions may influence it, the next section is dedicated to describing how we derived a suitable sample

to be able to answer these research questions. Firstly, the definition that will be used to identify potential companies is stated. After that, the approach of arriving at the Swedish publicly listed family businesses is presented which is followed by the description of the procedure for the German counterparts.

Our study focuses on listed family businesses as they are legally obliged to publish annual reports, which makes it easier for us to draw comparisons between diverse family businesses. Like Andersson et al. (2018) and Bjuggren et al. (2011) who have conducted studies targeting Swedish family firms we use the definition of the EC (2009). The EC (2009) considers a publicly listed company to be a family business if it fulfils the following conditions: an individual or a family holds at least one quarter of the voting rights and at least one family member is officially engaged in the governance of the company (e.g. as a member of the board of directors or the supervisory board). This reflects the first SEW dimension, namely family control and influence (F). Further, the definition is also in line with the research of Swab et al. (2020) as the authors link the “F” dimension to the ability to possess SEW. A very similar definition to that of the EC (2009) is also used by other researchers focusing on German family firms (Bain, 2019; Benz et al., 2020). The authors argue that the above-mentioned threshold of voting rights is sufficient to control the general assembly of a listed company. Other reasons for choosing the EC (2009) definition are that firstly, it is based on a large-scale meta-analysis of European family businesses, thus fitting the aim of our study and secondly, that the definition is recognized by renowned organizations such as the European Union (Andersson et al., 2018). In the context of our study, we have added one component to the chosen definition for our sample, namely that the family business must be at least 20 years old. We took this decision since it is more common in this time frame for succession to potentially be a topic and the next generation may already be involved with the firm to some extent (Bain, 2019). This additional component further reflects Swab et al.’s (2020) second ability dimension of SEW besides family control and influence (F), namely renewal of family bonds to the firm achieved by way of dynastic succession (R).

Below is a visualization of the relevant criteria of our operationalized definition of a publicly listed family business:

While it has long been known that family businesses are key drivers of the economy, research has been restricted by the incapacity to determine these businesses among the population in the first place (Andersson et al., 2018). This problem was addressed in the Swedish national context by Andersson et al. (2018) who conducted a large-scale study to obtain data on ownership, kinship and engagement in a firm's governance in various registers. As part of our study, we followed their work and were able to contact one of the authors through our university, who sent us their previously collected data regarding potential companies. We filtered this list according to the criteria in our definition above, selecting firms that were listed on the NASDAQ OMX Stockholm. The work of Bjuggren et al. (2011) dealing with a similar topic was another study we considered in this process, but the study does not give a complete picture of publicly listed Swedish family businesses, which again illustrates how difficult it is to find the desired data. After intensive research we were able to identify 20 Swedish listed family businesses for our sample that also fit our definition.

In the German national context, we followed a similar approach in principle, using previous data from Bain et al. (2019) and Benz et al. (2020) to identify potential German listed family businesses for our study. To meet our definition, we searched various databases and annual reports for information on family history, ownership structure, voting rights structure, family members who are on the board of directors or supervisory board, age of the company and whether the company was listed on the German stock market. After extensive research we were able to identify 20 German listed family businesses for our sample according to our definition to match the number of firms selected into our sample from Sweden.

In order to be able to measure the effect of the crisis on the communication presented through the statements to shareholders in the annual report and thus, on the FIBER dimensions of the SEW construct, we decided to focus on a time span of three years.

Thus, the annual reports of 2018 (before the crisis), 2019 (at the beginning of the crisis) and 2020 (during the crisis) are relevant for us. In summary, our sample consists of 40 family businesses including 20 Swedish listed family businesses and 20 German listed family businesses whose statements we examined over a time frame of three years. In Appendix 3 and 4 detailed information can be found about the respective companies. In total we examined 120 statements to shareholders in our analysis.

3.5 Data Analysis Procedure We began our analysis procedure by conducting a preliminary coding run by analysing the statements to shareholders of two firms per country for the entire observed period in line with the suggestions of Cleary et al. (2019). This allowed us to ensure the inter-coder reliability. It also resulted in modifications of the preliminary coding scheme, by allowing us to add to the elements of any FIBER dimension in accordance to frequently occurring topics we identified that were not covered by Cleary et al.’s (2019) original coding scheme. As mentioned above, this was done in the case of the “I” dimension, where we added an additional element.

The first test coding of 12 statements yielded an 85% match between the two coders. The main source of the discrepancies between the results was identified to be the coding of paragraphs in connection to the “E” dimension of emotional attachment. Specifically, it was tied to the coding scheme’s element of “use of emotive language against competitors/threats” (Appendix 2). In an effort to harmonize the two coders’ approach to what constitutes to emotive language, additional literature was consulted concerning the topic of emotional language (Johnson-Laird & Oatley, 1989). As metaphors have also been shown to be tied to the expression of emotions in financial analysis reports (Ho & Cheng, 2016), the coders also unified their approach in accepting the use of metaphors as emotive language in connection to the above element of the coding scheme. After these points were clarified the second round of test coding resulted in a high level of correlation between the two coders’ results (96%).

After conducting the aforementioned rounds of preliminary coding and adjusting our coding scheme we proceeded with the full coding process. Here, statements to shareholders published in the annual reports spanning a three-year period of the selected 40 firms, 20 per country, were coded. Following Cleary et al.’s (2019) coding method our units of analysis which were selected to be the individual paragraphs of the statements,

were coded from 1 to 5 based on our adopted and modified FIBER coding scheme. Thus, a paragraph through its assigned code corresponds to either one or more FIBER dimensions, based on which dimension or dimensions the contents of a given paragraph could be identified to relate to. In case no element of the paragraph could be linked to a FIBER dimension it received the code 0 and was not included in our analysis. In addition to this, paragraphs from reports published during the crisis period that referenced the COVID-19 pandemic were coded with the additional code of 6 in order to be able to track how prevalent the topic was between the 2019 and 2020 statements.

Once coded, the collected results were analysed through the IBM SPSS Statistics 27 software. We utilized category counting with each FIBER dimension representing one category to see how the frequency of each dimension, coded 1-5, changed before and during the crisis period in family firms in our sample (Weber, 1990). A separate round of category counting was also conducted in relation to the paragraphs, where we tracked the emergence of paragraphs assigned with code 6 due to them referencing the COVID-19 pandemic and the resulting crisis. This was done in order to give a full picture for the descriptive statistics by presenting how the different FIBER dimensions changed over time as paragraphs relating to COVID-19 and the crisis emerged simultaneously. We then proceeded with both the descriptive and analytical statistical analysis of our data, the results of which we detail in Chapter 4.

3.6 Research Quality We utilize secondary data in our research and thus are bound by validity and reliability challenges specifically tied to secondary data. As Saunders et al. (2016) outline when discussing this topic, the validity of secondary data often suffers from the issue of measurement validity, with the available data not matching the data needs and questions of the research exactly. As they go on to detail, since secondary data itself is diverse, this problem itself cannot be remedied with a single unified solution. They suggest looking at similar prior research and making our own judgements to ensure validity. Thus, to counter potential problems concerning measurement validity we looked at and based our approach on similar research which used chairman’s statements to measure the occurrence of the FIBER dimensions (Cleary et al., 2019). The results of this previous paper prove the validity and suitability of using chairman’s statements to measure SEW in publicly listed family firms. Furthermore, they outline how reports from other

executives could be potentially used for the same purpose in the future, a suggestion we follow in our research. Cleary et al. (2019) further mention potential problems of measurement validity that may arise from misinterpreting certain sections of the reports. Their solution to this problem is the use of preliminary coding done individually by separate coders on the same reports. We follow this suggestion and have done a preliminary coding run on twelve German and Swedish firms’ reports. We compared our results and resolved potential conflicts of interpretation that arose to ensure validity.

Ensuring coverage and the exclusion of unwanted data is also key (Saunders et al., 2016). To exclude unwanted data we followed the prior example and only used the statements to shareholders published in the annual reports as it has been shown to contain elements that connect to each of the FIBER dimensions (Cleary et al., 2019). To ensure coverage we contacted the authors of previous research concerned with identifying family firms publicly listed on the NASDAQ OMX Stockholm. Thanks to their help we were able to obtain and build on their previously constructed list of potential publicly listed family firms. Thus, we believe we have constructed an exhaustive list of publicly listed Swedish family firms that fulfil our operational definition. We then aimed to match this amount through identifying a comparable amount of German family firms.

Use of secondary data is not without its own set of pitfalls. We acknowledge that it may be subject to measurement biases that result from certain events and matters being deliberately excluded from the annual reports by the family firms we study (Saunders et al., 2016). With that in mind, we believe that our research was best suited for our selected method as it allowed us the opportunity to both take a longitudinal approach and avoid the biases that result from directly obtaining primary data from firms. We were also able to cover a wide range of companies that may have otherwise had limited resources to cooperate with us for our research given the still ongoing nature of the crisis caused by the pandemic.

3.7 Research Ethics As Easterby-Smith et al. (2018) detail the topic of incorporating research ethics into the area of business research has gained increasing interest. They detail ten principles that are to be followed in order to ensure that research is done in an ethical manner. Furthermore, they point out how the ten key principles broadly concern the protection of research participants and the integrity of the research community itself. In line with the first six of

the principles which aim at ensuring research participants’ protection, we have taken the necessary considerations. First, our research relies on secondary data, namely annual reports of publicly listed family firms. Thus, by using publicly available information, that was voluntarily made publicly accessible by the firms included in our research we ensure that our work does not run the risk of causing harm to or risking the dignity of the firms in our sample. Furthermore, we find that our approach respects privacy, anonymity and confidentiality for the same reasons. Regarding the principles relating to the preservation of the researchers’ integrity, we clearly outline the aim and purpose of our paper, our affiliations and find no conflicts of interest. We also aim to be as transparent and honest as possible by giving an in-depth account of our research method and data analysis.

Equally important Easterby-Smith et al. (2018) draw attention to the fact that business researchers should first and foremost be concerned with three major areas that could potentially undermine the ethical integrity of their work. These concern potential deception when both participating in and observing the situation, the pitfalls of conducting fieldwork in organizations and ethical issues tied to the collected data. Out of these three the area of relevance to our chosen method concerns the data acquired in the process of the research and its potential to harm those the data describes. We have relied on and collected publicly available data to identify publicly listed firms as family firms based on our selected criteria. As it is pointed out by Saunders et al. (2016), when collecting, amassing and analysing publicly available data from the internet without the explicit consent and knowledge researchers are faced with a dilemma. They can either publish the data as it is or use anonymity to preserve the confidentiality and data privacy of the research subjects. However, this dilemma is mostly associated with the harvesting and use of data tied to the communication of private individuals, such as blogposts or forum discussions. We utilize the annual reports of public firms and find that providing a clear, transparent list of selected firms, while also being able to use quotes and examples from the analysed statements benefits the quality and transparency of our research. Furthermore, similar use of secondary data is not without precedent (Cleary et al., 2019), showing the ethical validity of the approach. We thus, find that the resulting list of firms does not violate the privacy or interests of the included firms and avoids the potential problems of the aforementioned dilemma. As a result, we present the full list of firms we have selected into our sample. This further allows us to ensure the transparency, replicability and validity of our study.

4 Findings and Data Analysis

______

In the following chapter the findings of the study are presented and analysed. After the empirical characteristics of the sample are described in the first part, the second part is dedicated to the descriptive statistics of the study. Thereafter the statistical analysis is presented. Lastly, the findings are put into context with the use of prior research. ______

4.1 Description of Empirical Data The next section outlines the characteristics of our sample. In total, we looked at 40 firms over a three-year period (2018-2020), 20 firms in Germany and 20 firms in Sweden. Detailed information on the selected firms can be found in Appendix 3 and 4.

To meet our definition, companies had to fulfil three criteria: the owning family must hold at least 25% of the voting rights, at least one family member must be involved in the governance of the company and the company must be at least 20 years old. In the following figures, information on the year the companies were founded, number of employees, annual turnover and the sectors they operate in, is described. In addition, voting rights shares, whether a family member serves on the Executive Board and Board of Directors or Supervisory Board, whether the author of the statement to shareholders is a family member and whether the family name equals the company name are presented.

Year founded Number of employees 50% 45% 40% 17% 35% 30% 45% 25% 20% 15% 38% 10% 5% 0% 251- 1,001- 10,001- > < 250 1,000 10,000 50,000 50,000 before 1900 1900-1950 1950-2000 % 8% 8% 48% 35% 3%

Figure 4: Descriptive statistics – year founded and number of employees

As shown in Figure 4, most of the companies analysed were founded between 1900 and 1950 (38%) or 1950 and 2000 (45%). Just 17% of the companies are older than 100 years. Furthermore, most companies had between 1001 and 10000 employees (48%), followed by the second largest group, which had between 10001 and 50000 employees (35%).

Revenues in million EUR 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2000M- 5000M- < 1M 1M-500M 500M-2000M > 10000M 5000M 10000M % 5% 18% 45% 20% 10% 3%

Figure 5: Descriptive statistics – revenues in million EUR

The revenue sizes of the sample were distributed as follows: 45% of the companies generated profits between 500 and 2000 MEUR, 20% between 2000 and 5000 MEUR, 18% between 1 and 500 MEUR, 10% between 5000 and 10000 MEUR, 5% below 1 MEUR and 3% above 10000 MEUR (Figure 5).

Sectors Family voting rights

Communications 5% 20-30% 8%

Consumer Discretionary 13% 30-40% 8% Consumer Staples 5% 40-50% 40% Financial Services 13% 50-60% 20% Healthcare 8% 60-70% 10% Industrials 38% 70-80% 10% Materials 10%

Real Estate 5% 80-90% 3%

Technology 5% 90-100% 3%

Figure 6: Descriptive statistics – sectors and family voting rights

In addition, companies operating in diverse sectors are represented in our sample (Figure 6). 38% of the companies belong to the Industrials sector and 13% each to the Financial Services sector and the Consumer Discretionary sector. The remaining 36% of companies are spread across Real Estate, Communications, Healthcare, Technology, Materials and Consumer Staples (each between 5-10%).

Moreover, 40% of the families had between 40-50% of the voting rights in their companies, followed by 20% of the families with voting rights between 50-60%. 10% of the companies had voting rights between 60-70% and 70-80%. The remaining companies had either less than 40% or more than 80% of the voting rights (Figure 6).

Family member is on Executive Board

Combined Sample Sweden Germany

No Yes No 50% 25% 25%

Yes No Yes 50% 75% 75%

Figure 7: Descriptive statistics – family member is on Executive Board

As shown in Figure 7, 50% of the companies had a family member serving on the company's executive board. At the country level this is true for 25% of Swedish companies versus 75% of German companies (Figure 7).

Family member is on Board of Directors/Supervisory Board

Combined Sample Sweden Germany

No No 12% 25%

Yes Yes Yes 100% 88% 75%

Figure 8: Descriptive statistics – family member is on Board of Directors/Supervisory Board

88% of the companies had a family member appointed to the board of directors or supervisory board. At the country level this applies to 100% of Swedish companies versus 75% of German companies (Figure 8).

Family member is author of statement to shareholders

Combined Sample Sweden Germany

No Yes No 45% 45% 35%

Yes No Yes 55% 55% 65%

Figure 9: Descriptive statistics – family member is author of statement to shareholders

Of the statements to shareholders examined, 55% were written by family members. At the country level 45% of the authors of the Swedish companies were family members and 65% of the German companies (Figure 9).

Family name is also company name

Combined Sample Sweden Germany

Yes Yes No 35% 20% 50%

No No Yes 65% 80% 50%

Figure 10: Descriptive statistics – family name is also company name

The family name corresponded to the company name in 35% of the cases. Broken down to the country level, this applied to 20% of Swedish companies and 50% of German companies (Figure 10).

4.2 Descriptive Statistics In the following the descriptive results of the content analysis are presented. In the first part of this section, a general overview of the coded paragraphs is given. This is followed in the second part by a presentation of the chronological prioritization of the individual FIBER dimensions.

All paragraphs of the statement to shareholders of the annual reports of 20 German and 20 Swedish family firms from 2018, 2019 and 2020 were coded. Hence, the content analysis was conducted on 120 statements. The total number of coded paragraphs was 1755, thus each statement had an average length of 15 paragraphs. Table 4 shows an overview of the coded paragraphs.

Germany Sweden Total

n % n % n %

Total number of paragraphs 742 100 1013 100 1755 100

Paragraphs without 568 76.6 847 83.6 1415 80.6 FIBER dimensions Paragraphs with 174 23.5 166 16.4 340 19.4 FIBER dimensions Paragraphs with 145 19.5 148 14.6 293 16.7 1 dimension Paragraphs with 24 3.2 16 1.6 40 2.3 2 dimensions Paragraphs with 3 0.4 2 0.2 5 0.3 3 dimensions Paragraphs with 1 0.1 0 0 1 0.1 4 dimensions Table 4: Breakdown of coded paragraphs

Out of the total number of paragraphs that made up the content analysis 19.4% could be linked to the FIBER dimensions. When looking at the two countries’ statements separately, while the Swedish statements contained an overall higher number of paragraphs relative to Germany, the Swedish statements also contained a lower overall percentage of paragraphs coded with the FIBER dimensions (16.4%) than Germany (23.5%). Both countries’ statements possessed a roughly equal amount of FIBER paragraphs over the entire period, with Germany having 174 FIBER paragraphs and Sweden having 166. Furthermore, the German statements were responsible for an overall higher number of paragraphs that contained more than a single dimension. In addition, they contained the single paragraph that had four different FIBER dimensions assigned to it (Table 4). In contrast to previous research which employed the same coding method and content analysis approach, one German and one Swedish statement did not receive any codes related to a FIBER dimension (Cleary et al., 2019).

Next, it is presented how the different FIBER dimensions changed in their prevalence in the coded paragraphs, showing how certain dimensions increased in their prioritization by the firms, while other dimensions received less paragraphs devoted to them (Figure 11 - 13). First, the ability part of the SEW construct is described in relation to the figures, namely the dimensions “F” and “R”. Then, the willingness part of the SEW construct is

presented in relation to the figures, namely “I”, “B” and “E”. The figures show how the individual FIBER dimensions changed for the combined sample and for each country in relative terms over the total number of FIBER dimensions coded for each year.

FIBER prioratization in both countries (2018-2020) 70% 60% 50% 40% 30% 20% 10% 0% 2018 2019 2020 F 8% 7% 3% I 18% 20% 11% B 63% 57% 46% E 9% 15% 39% R 3% 2% 0%

Figure 11: FIBER prioritization in both countries (2018-2020)

FIBER prioratization Swedish sample (2018-2020) 80% 70% 60% 50% 40% 30% 20% 10% 0% 2018 2019 2020 F 6% 4% 3% I 15% 11% 8% B 73% 74% 51% E 2% 9% 39% R 4% 2% 0%

Figure 12: FIBER prioritization Swedish sample (2018-2020)

FIBER prioratization German sample (2018-2020) 60%

50%

40%

30%

20%

10%

0% 2018 2019 2020 F 9% 10% 4% I 20% 27% 15% B 55% 42% 42% E 14% 19% 38% R 2% 2% 0%

Figure 13: FIBER prioritization German sample (2018-2020)

Figure 11 presents how the dimensions shifted over the studied period for the combined sample. Here, the ability dimensions “F”, family control and influence, and “R”, renewal of family bonds through dynastic succession, showed an overall decrease from 2018 to 2020. Also, both dimensions had a very low share of the overall FIBER coded paragraphs. The same is valid for the Swedish statements, while in the German statements an increase in the “F” dimension from 2018 to 2019 can be observed, before the level fell to its lowest point over the analysed period in 2020 (Figure 12 & 13). In addition, out of the 20 Swedish firms five addressed this dimension in the observed time period versus nine firms for the German sample (Appendix 5). Further, the “R” dimension had the lowest percentage out of all paragraphs with FIBER dimensions. In the German statements over the first two studied years “R” made up 2% of those years’ FIBER paragraphs, while in the Swedish statements a decrease from 4% in 2018 to 2% in 2019 can be observed. The dimension received no coded paragraphs in 2020 for neither countries’ statements (Figure 12 & 13). Both countries only had two firms during the entire period whose statements included paragraphs that were linked to this dimension (Appendix 5).

After the ability dimensions “F” and “R” have been considered, the willingness dimensions “I”, “B” and “E” will be addressed below. The “I” dimension, identification of family members with the firm, shows an increase for the combined sample from 18% in 2018 to 20% in 2019, while it dropped to 11% in 2020 (Figure 11). Compared to the

overall FIBER dimensions it thus represents the second most coded dimension in 2018 and 2019 and the third most addressed dimension in 2020. The Swedish statements have seen a consistent decrease over the three-year period for this dimension with it similarly starting off as the second most represented dimension in 2018 with 15% and then dropping to the third place in both 2019 and 2020 with 11% and 8% respectively (Figure 12). The German statements saw an increase in “I” in 2019 before decreasing in 2020. Thus, it was the second most prominent dimension in both 2018 with 20% and 2019 with 27% before dropping to the third place with 15% in 2020 (Figure 13). Further, the “I” dimension appeared in the statements of eight out of 20 Swedish firms from 2018 to 2020 versus ten out of 20 German firms (Appendix 5).

The next willingness dimension to consider is “B”, binding social ties, which was the most dominant dimension in the combined sample for all years. Paragraphs that contained this dimension made up 63% in 2018, 57% in 2019 and 46% in 2020 of the total number of paragraphs coded with the FIBER dimensions (Figure 11). When viewed in isolation the Swedish statements fared in a similar manner. Paragraphs containing the “B” dimension made up 73% of the total FIBER paragraphs in 2018, followed by 74% in 2019 and 51% in 2020. Even with the decrease in paragraphs containing the “B” dimension in 2020 for the Swedish statements, the dimension still retained its position as the one with the most paragraphs linked to it for that year (Figure 12). On the other hand, dimension “B” decreased for the German sample from 55% in 2018 to 42% in 2019 and stayed at the same level in the 2020 statements. Also, in the case of the German companies for all statements in the three-year-period this dimension was the one with the most paragraphs tied to it (Figure 13). In addition, the “B” dimension was addressed by 19 out of 20 Swedish firms as well as the entire 20 firms in the German sample in the three years (Appendix 5).

The last willingness dimension to address is “E”, emotional attachment of family members, which initially only made up 9% of the FIBER paragraphs in 2018 and 15% in 2019 within the combined sample. However, in 2020 the percentage rose to 39%, resulting in “E” being the second most prominent dimension after “B” with 46% (Figure 11). In the Swedish firms’ statements only 2% of the FIBER paragraphs included the “E” dimension in 2018 as a single company had a paragraph linked to it. This did change in the 2019 statements of the Swedish firms with four firms having paragraphs addressed to

“E” resulting in an increase to 9%. Like the combined sample the Swedish statements in 2020 showed a further prioritization of the “E” dimension increasing to 39% and thus becoming the second most dominant dimension after “B” with 51% (Figure 12). Within the German sample the “E” dimension has been comparatively higher with 14% in 2018 and 19% in 2019. In 2020 the amount of FIBER paragraphs containing “E” increased to 38% in the German sample. As in the cases presented before it thus follows “B” with 42% as the second most prominent dimension (Figure 13). In total 14 out of the 20 Swedish firms addressed this dimension over the three-year span as well as 17 out of the 20 German firms (Appendix 5).

4.3 Statistical Analysis To analyse how the FIBER dimensions changed in their prevalence in the statements that make up our sample, a statistical approach was adopted which was in line with studies utilizing a similar content analysis methodology (Cleary et al., 2019; Moreno & Cámara, 2014). Our sample does not fulfil the requirements of normality using the Kolmogorov- Smirnov and Shapiro-Wilk tests (Saunders et al., 2016). In line with this we have opted to use statistical non-parametric tests to analyse our data (Saunders et al., 2016). Thus, we have conducted Kruskal-Wallis tests, allowing us to check for significant differences in the dimensions over the studied period and Mann-Whitney tests, in order to specify which year’s statements were tied to the significant differences we may find. These tests allowed us to see if there was a significant difference between the years concerning the paragraphs tied to the different FIBER dimensions and if there was a significant difference for the dimensions when comparing the two countries. Thus, the tests allowed us to validate our propositions and see if there was a statistically significant change in the FIBER dimensions in conjunction with the emergence of the crisis.

In our first proposition we outlined our assumption that the crisis would affect the prioritization of SEW. In order to see if there was a significant difference in any of the FIBER dimensions we began by conducting a Kruskal-Wallis test for our sample over the entire three-year period of our observations for the combined sample (Table 5) and on a country basis (Table 6 & 7). This allowed us to reject or accept the null hypothesis in each of these cases of there being no significant difference in each FIBER dimension between the years over the studied period (Moreno & Cámara, 2014). Based on the results of the three Kruskal-Wallis tests we can see that for both our separate Swedish and

German samples as well as the combined sample, the only dimension with a statistically significant difference over the studied period at a 95% level was the FIBER dimension “E”. In the cases of the other four dimensions “F”, ”I”, ”B” and ”R”, the test showed no significant difference. Thus, in these cases leading us to accept the null hypothesis of no significant difference.

Entire sample (both countries) F I B E R Kruskal-Wallis H 2,047 ,353 1,523 33,624 2,897 df 2 2 2 2 2 Asymp. Sig. ,359 ,838 ,467 ,000 ,235 Table 5: Kruskal-Wallis test results for combined sample (entire period)

Sweden

F I B E R

Kruskal-Wallis H ,318 ,061 ,419 22,845 2,070

df 2 2 2 2 2 Asymp. Sig. ,853 ,970 ,811 ,000 ,355

Table 6: Kruskal-Wallis test results for Swedish sample (entire period)

Germany F I B E R Kruskal-Wallis H 2,136 ,429 2,384 11,988 1,017 df 2 2 2 2 2 Asymp. Sig. ,344 ,807 ,304 ,002 ,601

Table 7: Kruskal-Wallis test results for German sample (entire period)

Nonetheless, the tests prove that there was a statistically significant increase in paragraphs expressing the “E” dimension, family member’s emotional attachment to the firm, in the case of both the Swedish (Table 6) and German firms (Table 7) as well as in the case of the combined sample (Table 5). Thus, we can see an observable shift in the prioritization of the FIBER dimensions coinciding with the emergence of the crisis caused by the COVID-19 pandemic, this allows us to validate our first proposition.

This leads us to our second and third propositions. The second proposition detailed that the crisis would not have a significant impact on the ability dimensions, while the third

proposition postulated that there would be a significant impact on the willingness dimensions.

Starting with the ability dimension of family control and influence (F), we can see a decrease in the number of paragraphs devoted to the dimension in both countries’ cases as demonstrated by the descriptive statistics in 4.2. However, the resulting differences between each years’ statements did not prove to be statistically significant in neither the combined nor the individual samples (Table 5-7). Similarly, the dimension of renewal of family bonds through dynastic succession (R) did not show a significant difference through the Kruskal-Wallis tests either (Table 5-7). These results thus support our second proposition.

Moving on to the third proposition tied to the willingness dimension, for the dimension of family members’ identification with the firm (I) the Kruskal-Wallis test did not find a statistically significant difference over the studied period neither for the individual nor the combined samples (Table 5-7). Furthermore, in the case of the dimension of binding social ties (B) we did not find a statistically significant difference either (Table 5-7).

On the other hand, the dimension of family member’s emotional attachment to the firm (E) showed statistically significant differences over the studied period both in the case of the combined and the individual country samples (Table 5-7). To determine which year impacted the prioritization of this FIBER dimension the most in the statements further Mann-Whitney tests were conducted for each FIBER dimension comparing the different years. The results have shown that in the case of the sample of both the German and Swedish firms this difference was not statistically significant between the statements of 2018 and 2019 (Appendix 7 & 8). On the other hand, there was a statistically significant difference in the dimension from 2019 to 2020 and 2018 to 2020 for both the Swedish and German samples. The same was true for the combined sample (Appendix 6). Although, in the case of Germany this difference between the 2019 and 2020 statements was extremely close to not being significant, barely being under the required alpha level of .0166 we get after adjusting for the number of comparisons made through a Bonferroni correction (Armstrong, 2014). Nevertheless, these results thus also allow us to validate our third proposition, with there being a significant difference connected to the willingness dimension of emotional attachment which emerged as the crisis was put in the focus in the 2020 statements.

In connection to our final proposition, we conducted additional Mann-Whitney tests looking at each FIBER dimension over the total FIBER dimensions for each separate year between the corresponding Swedish and German samples (Appendix 9). These tests found no significant difference for any of the FIBER dimensions in none of the three years’ statements between the Swedish and German samples. Furthermore, both the Swedish and German statements of 2020 were significantly different in the “E” dimension compared to both their corresponding 2018 and 2019 statements (Appendix 7 & 8). These results thus contradict our fourth assumption of the SEW prioritization differing significantly when comparing our Swedish and German samples.

4.4 Summary and Comparison with Prior Research

4.4.1 Summary of Findings

In summary, through the statistical analysis we were only able to find a statistically significant difference for the FIBER dimension of emotional attachment (E) over the studied period. Nevertheless, these results supported our first three propositions of the crisis impacting FIBER prioritization with the crisis not having significant effect on the ability dimensions and the crisis impacting the willingness dimensions significantly. On the other hand, our final proposition of there being a difference between the two countries’ samples were not validated by our results. In fact, the results showed a remarkable similarity for several dimensions between the two countries. We give more context to these findings and contrast them with our qualitative insights and the descriptive results below in connection to each individual dimension.

The descriptive statistics give us a detailed picture of the FIBER dimensions and how they changed as the crisis caused by the COVID-19 pandemic emerged. Our descriptive results also allow us to compare and contrast with the original article’s results that previously proposed and used the coding scheme we have adopted (Cleary et al., 2019). We also note that to our knowledge there have been no other studies using this approach to study the FIBER dimensions of the SEW construct in statements to shareholders published in annual reports that we could compare our results to (Cleary et al., 2019). Our sample contained two statements where none of the paragraphs received codes corresponding to a FIBER dimension. This contrasts Cleary et al.’s (2019) results as every statement they coded received at least one coded paragraph. Nevertheless, the other 118

statements used in our content analysis all had at least one paragraph further adding credibility to the method proposed by Cleary et al. (2019). Overall, the statements that made up our sample also contained less paragraphs relative to the total number of coded paragraphs that were coded as having FIBER dimensions than in Cleary et al.’s (2019) study of two firms.

As propositions one, two and three were found to be valid, the findings regarding which FIBER dimensions were dominantly present in the statements could be potentially explained by the notion put forward by Swab et al. (2020). They propose that the three FIBER dimensions that make up a family firm’s willingness to pursue and sustain SEW are the main drivers behind family firm heterogeneity since these dimensions react in accordance with different contingencies, while the ability dimensions stay stable. The same three willingness dimensions, that is identification with the family firm (I), binding social ties (B) and emotional attachment (E), were the ones that were most dominantly represented in both the pre-crisis statements and in statements published during the pandemic. Furthermore, emotional attachment under the willingness category was the only dimension that was significantly different between all three years, thus supporting our third proposition. On the other hand, the two dimensions of family control and influence (F) and renewal of family bonds through dynastic succession (R) that are tied to ability proved to be the two least represented dimensions both before and during the crisis. This in turn gives legitimacy to our second proposition. We begin our discussion and comparison to prior research of the results with these two ability dimensions and then move on to the three willingness dimensions.

4.4.2 Ability Dimensions “F” and “R”

In line with previous findings utilizing our approach (Cleary et al., 2019), the “F” dimension only made up a low percentage of the paragraphs devoted to the FIBER dimensions in the case of both the combined and the individual countries’ results. The same was true for the “R” dimension with it being the overall least represented dimension of our study across all firms and in both countries (see 4.2). This result could potentially be explained by these two dimensions being the ones responsible for the family firm’s ability and not the family firm’s willingness to preserve and pursue SEW. Thus, the two

dimensions might not shift around in prioritization in response to outside stimuli affecting the firm (Swab et al., 2020).

While the ability dimension of family control and influence (F) held a slightly higher share of the overall FIBER paragraphs than the “R” dimension, it received less attention in each successive year’s reports for both countries’ samples. As discussed above the dimension had no significant differences between the three years. Furthermore, with paragraphs associated with the dimension overall appearing in the statements of only five Swedish and nine German firms (Appendix 5), we can point to our results aligning with those of previous research (Cleary et al., 2019). Again, the results for this dimension could be potentially explained by Swab et al.’s (2020) propositions of the ability dimensions not being prioritized by family firms as a response to different contingencies. In this conceptualization they instead serve as an enabler, a necessary but in itself not sufficient requirement for family firms to pursue and preserve SEW. This could explain why the dimension was not prioritized in the statements as the crisis emerged. Similar to the “R” dimension, paragraphs tied to this dimension did not focus on the crisis caused by the pandemic either and were mostly concerned with appointments of family members or share issues. In the following some quotes from the statements to shareholders tied to the “F” dimension are presented (see Appendix 10 for further examples)2:

“As the majority shareholder of our family and entrepreneur led group, this is something that we are very conscious of. And we are more than happy to bear the responsibility that comes along with it” (Hansen & Rosenthal, 2019).

“Since the takeover by Heinz Hermann Thiele, our current majority shareholder and honorary Chairman of the Supervisory Board, Knorr-Bremse has evolved into a global market leader and cutting-edge player on the international scene” (Knorr-Bremse, 2018).

“Christa Fuchs stepped down from the position of Chairwoman of the Supervisory Board upon turning 80 but remains an ordinary member of the Supervisory Board” (OHB, 2018).

2 (Relevant for Appendix 10-14): All annual reports used can be accessed through the following link: https://drive.google.com/drive/folders/1JsrEk-7dTmifocQG8UhuPFHXoS9A-jWb?usp=sharing

Regarding the other ability dimension renewal of family bonds through dynastic succession (R) the possible explanation for why the dimension proved to be the least prevalent one across the board is further backed up by prior research. Researchers noted the many pitfalls and difficulties family firms face in preparing and successfully executing intra-family succession (De Massis et al., 2008; Sund et al., 2015). Incumbents often do not prepare for succession by adequately discussing the topic or in some cases even actively avoid doing so. Thus, the fact that this dimension has been barely expressed in the studied reports may not come as a surprise, particularly when considering the crisis element in the studied time period. Further, it also needs to be considered that the purpose of the statement to shareholders is external communication of business events within a certain year (Brennan & Merkl-Davies, 2013). Thus, internal succession problems might not be a topic to be discussed in those reports until an internal decision has been made. In spite of this, family firms’ ability to pursue and maintain their SEW is inherently tied to ensuring intra-family succession. In the face of an outside threat family firms have been shown to avoid alternatives where the possibility of future succession to the next generation would be compromised (Chirico et al., 2020). Thus, it is interesting to note that no firm in our sample brought up the dimension in connection to the crisis and future plans of succession. Instead, all paragraphs tied to the “R” dimension were ones referencing current or previous transitions. Thus, it seems that even if the extraordinary crisis situation caused by the COVID-19 pandemic did potentially bring newfound relevance for the internal discussion of succession, the family firms in our sample still did not choose to prioritize this dimension of SEW to the extent that they were communicated in their statements to shareholders. In the following a sample quote from the statements to shareholders tied to the “R” dimension is presented (see Appendix 14 for further examples):

“2019 was also a special year for us as a family: we completed the change of generation in November. My father had planned the succession for a long time. After eight years working together in the company, including three years on the Management Board, he has now has fully retired from the company. I am extremely grateful for the extensive preparation he gave me. It is with a sense of both joy and duty that I will lead the second generation of our family business” (Fielmann, 2019).

Previous critiques of the FIBER model have also pointed out how this dimension may overlap with dimension “F” (Hauck et al., 2016). We also note that the coding scheme we adopted (Cleary et al., 2019) does allow for certain overlaps between the two dimensions, with us observing that the paragraphs receiving the “R“ code often also referenced family member appointments or resignations from the board similar to paragraphs with the “F” dimension (Appendix 10 & 14). Out of the three separate instances of the “F” dimension appearing in Swedish statements’ paragraphs, two were also coded as also possessing the “R” dimension. For German statements, paragraphs coded to have the “R” dimension without exception also received the code for having the “F” dimension alongside them. These points combined with the fact that the two ability dimensions were the ones that appeared the least frequently overall might give further legitimacy to Hauck et al.’s (2016) critique. This could point to future conceptualizations of a FIBER model-based coding scheme measuring the two dimensions together instead of separately, for instance as an “ability” dimension following Swab et al.’s (2020) model.

4.4.3 Willingness Dimensions “I”, “B” and “E”

Moving on to the FIBER dimensions responsible for willingness according to Swab et al. (2020) we can observe several interesting points. Despite the fact that our sample observes a wide range of firms across multiple sectors in two different countries and over a shorter time period than a comparable study, the dimension of binding social ties appeared to be represented in a percentage of the total FIBER paragraphs on a national level that is in line with what Cleary et al. (2019) previously observed. Together with the two dimensions of identification with the family firm and emotional attachment, the three willingness dimensions were the ones with the highest overall percentage of paragraphs of all FIBER paragraphs over the entire period in the combined sample (see 4.2). This further lines up with previous suggestions regarding the prioritization of FIBER dimensions in the willingness category (Swab et al., 2020). However, unlike Cleary et al.’s (2019) results, the “E” dimension proved to be more prominent for the combined sample showing a steady growth relative to the total FIBER paragraphs. This growth was accompanied by the emergence of paragraphs expressing the crisis caused by the pandemic that were not all necessarily linked to any of the FIBER dimensions. While statements in 2018 were more akin to Cleary et al.’s (2019) results in terms of the prominence of this dimension, with only a single Swedish firm and four German ones

having paragraphs associated with it in 2018, the number of firms that had paragraphs with the “E” dimension increased in 2019. 2020 then had 29 of the studied 40 firms, 14 in the case of Sweden and 15 for Germany, which had paragraphs tied to emotional attachment, a strikingly homogenous development that contrasts previous findings and suggestions (Cleary et al., 2019). In the following, the individual willingness dimensions “I”, “B” and “E” are examined in more detail and compared to prior research.

In connection to our third proposition, the first FIBER willingness dimension, identification with the firm (I), could have differed significantly between statements published before and during the crisis. While the dimension was the second most prevalent for both countries’ samples in 2018, it did increase in prevalence as the crisis was expressed in the 2019 statements for Germany. However, by 2020 it fell back to be the third most prominent dimension in both countries’ statements. Furthermore, on the individual firm level, only two firms, one per country, introduced a paragraph with the dimension in 2020 without having paragraphs with the dimension in the previous year’s statements. Nevertheless, some firms did initially have an increase in the number of paragraphs with the “I” dimension from 2018 to 2019. Apart from the two mentioned exceptions, firms that had the “I” dimension in any of its prior statements either had less paragraphs addressing the “I” dimension in 2020 or retained the same number from 2019 (see 4.2). This may come as a surprise given that previous literature has linked this dimension with the family firm’s tendency to make decisions that aim to preserve not only profit but also the family name’s respect in the eyes of its stakeholders (Berrone et al., 2012). Thus, it was plausible to assume that firms would prioritize this dimension in their outward communication through the statement, in order to preserve their SEW in response to the crisis and the many uncertainties it caused. Furthermore, in relation to the “I” dimension we assumed that family firms could potentially draw upon their family history with previous crises to ensure their stakeholders that they can persevere through the crisis (Cleary et al., 2019). Instead, we observed the dimension decreasing in the number of paragraphs linked to it as the crisis was introduced in the 2019 reports and became the main focus in the ones from 2020.

Furthermore, the “I” dimension in the statements of the German firms took up a larger percentage of the total FIBER dimensions for all three years when compared to the number of paragraphs with the dimension in Swedish statements (see 4.2). This can be

potentially explained by the German sample having more firms whose name equals the name of the controlling family than the Swedish sample (see 4.1). Due to the nature of our coding scheme (Appendix 2), this meant that paragraphs referring to products and initiatives sharing the family’s and the firm’s name were coded with the “I” dimension. Because of the above-mentioned reason this happened more frequently in the case of German firms. Nevertheless, this only explains why the German sample has an overall higher number of paragraphs with the “I” dimension than the Swedish one. The effect of the crisis in the 2020 statements seems to be similar for both countries, as in both samples the “I” dimension is only at third place in its overall share of the total number of FIBER paragraphs. The differences between the years for this dimension did not amount to be statistically significant. The fact that the dimension did not come to the forefront during the crisis can be interpreted using Swab et al.’s (2020) suggestions. Interpreting the results through this lens would suggest that the willingness dimension of “I” was not prioritized during the crisis and thus falling out of focus in favour of the other two willingness dimensions “B” and “E”. In the following some quotes from the statements to shareholders tied to the “I” dimension are presented (see Appendix 11 for further examples):

None of us have experienced all of these phases in person. Nevertheless, these years are closely linked with the name of the Hansen family – through the people who have carried, and passed on, the baton from generation to generation (Hansen & Rosenthal, 2019).

Lundbergs celebrates 75 years during the autumn. It was my father, Lars Erik Lundberg, who started the business in Norrköping, as a construction company (Lundbergforetagen AB, 2018).

This brings us to the next FIBER dimension falling under the willingness category: binding social ties (B). This dimension was by far the most represented throughout the entire period in both countries. Although the number of paragraphs did not differ significantly between the three years, there are still several insights to be discussed connected to this dimension. Even though the relative percentage of paragraphs containing the “B” dimension compared to the total amount of FIBER paragraphs decreased in each successive year, the absolute number of paragraphs containing “B” remained almost unchanged for each year both on a country and an individual firm level

(see 4.2). The dimension’s continued prevalence between years and across firms lines up with Cleary et al.’s (2019) results. The authors observed the dimension to be the most represented one for one firm and the second most represented one for another over a much longer time horizon compared to our study.

Since there was no statistically significant difference in the number of paragraphs with the “B” dimension it may seem like the dimension was slowly side-lined in the reports as the crisis emerged. However, we would be doing our sample a disservice if we only looked at our results through solely the lens of statistical significance. Although the relative presence of the dimension decreased in the 2019 and 2020 reports when compared to each corresponding previous year, the quality and contents of these paragraphs grew to reflect on the crisis and its effects by the 2020 reports (Table 8). Initially paragraphs from 2018, thus predating the crisis, mostly contained general expressions of gratitude towards certain groups of employees or specifically towards non-family member managers for their exceptional efforts or achievements. Since the dimension of “B” covers the family firm’s goal of preserving its relationships with its stakeholders from a long- term perspective, it also goes beyond basic acknowledgement of employees’ achievements (Berrone et al., 2012; Casillas et al., 2019). In line with this, the crisis’ effect on the 2020 statements brought about a torrent of paragraphs containing the “B” dimension that were dedicated to thanking and highlighting the efforts employees took to combat the crisis, often focusing on the strengthened community and culture of mutual aid that developed in response to the pandemic (Table 8). This effect of the crisis on family firm’s culture lines up with previous findings from early research on the effects of the pandemic instigated crisis on family firms (Kraus et al., 2020). Table 8 below compares the “thank-you sections” to employees from before versus during the crisis using three exemplary companies to illustrate the qualitative deepening of the 2020 statements. For further general sample quotes regarding dimension “B” see Appendix 12.

Company Employee Recognition Before COVID-19 During COVID-19

“I would like to take this opportunity to expressly thank all our employees for the tremendous dedication with which they are “I would specifically like to thank our rising to the current challenges. They are employees. Thanks to their dedication demonstrating the value we chose as our motto we saw good growth in 2018 and were back when we celebrated our anniversary in able to cope with the record volumes Dräger 2014: They are working ›with heartfelt in production in the fourth quarter dedication‹! All of our employees are going the once again, setting a new net sales extra mile and are working for life every day! record” (Dräger, 2018). For this reason, we decided to pay a special Thank•You bonus to all employees worldwide at the end of the year” (Dräger, 2020).

“It is said that, “people show their true character in times of crisis”. The level of commitment and solidarity displayed in our family business this year has impressed me “We thank all our employees. With greatly. I would like to take this opportunity to their dedication, conscientiousness thank our employees, who have combined Fielmann and competence, they once again customer orientation and health protection contributed to the success of the throughout this highly unusual year. Their company […]” (Fielmann, 2018). untiring dedication and flexibility in challenging times were exemplary. I am optimistic that, together, we will overcome the challenges that the current year holds for us” (Fielmann, 2020).

“This, I want to suggest, is a result of all the “I also want to thank all our fantastic work that my fantastic co-workers have put in, employees whose dedicated work has where everyone with great commitment Wallenstam enabled us to be so successful” contributed and really battled during these (Wallenstam, 2019). very special circumstances” (Wallenstam, 2020).

Table 8: Employee recognition before versus during COVID-19

In conclusion, while the number of paragraphs containing the “B” dimension might not have changed significantly in response to the crisis, the quality of the corresponding paragraphs did change to reflect the effects of the crisis. Many family firms dedicated significant sections of their statements to detailing and thanking their stakeholders in their efforts to thwart the negative impact of the crisis on their firms, giving further support to

Swab et al.’s (2020) proposal of binding social ties being a willingness dimension that may be prioritized by family firms in response to certain contingencies.

Moving on we arrive at the dimension of emotional attachment (E). Initially we discussed how this dimension may be the biggest source of difference between how the two countries’ family firms may prioritize certain FIBER dimensions in response to the crisis (see 2.5.3). We based this on the contrasting framing of the crisis by both countries’ respective governments. We theorized that the associated “negative framing” of the situation in Germany could in turn bring about a more emotional response (Hameleers, 2021). On the other hand, we linked the recommendation-based approach of the Swedish government to a less emotional one. Although the dimension had seen statistically significant difference between the years, it did so for both countries in a similar manner. Thus, it contrasts our previous assumption. Nevertheless, the results show a willingness dimension being brought to the forefront in connection to an outside stimulus (Swab et al., 2020). The drastic increase in the number of paragraphs with the dimension happened simultaneously with the topic of the crisis taking centre stage in most statements. Figure 14 shows how the number of paragraphs referencing the crisis increased alongside the changes in the amount of FIBER dimensions.

Number of FIBER and COVID-19 Crisis related paragrahs in both countries (2018-2020) 250

200

150

100

0 2018 2019 2020

F I B E R CRISIS

Figure 14: Number of FIBER and COVID-19 crisis related paragraphs in both countries (2018-2020)

Figures 12 and 13 in section 4.2 show that there was initially a pre-crisis difference in the "E" dimension between the two countries. While the share of the "E" dimension in the Swedish statements was only 2%, the share in the German statements was 14% in 2018. However, similarly to the “I” dimension there are certain aspects of the coding scheme that may be responsible for the pre-crisis differences between the two countries’ statements. As with the “I” dimension this is due to our German sample having a larger number of firms that shared their name with the family. According to the coding scheme this results in references regarding the superiority of family brand or method being coded with the “E” dimension. It should also be noted that the coding scheme explicitly links outside threats to the firm directly to the dimension of emotional attachment (Appendix 2). However, this does not mean that every paragraph that merely mentions the crisis was coded as containing the “E” dimension. Quite the contrary, the crisis related paragraphs far exceed the paragraphs to be considered emotional in the context of coding scheme as can be seen in Figure 14.

With these points in mind, the “E” dimension reached the same relative share of the total FIBER paragraphs for 2020 for both the Swedish and German firms (see 4.2). Paragraphs dedicated to expressing emotional responses to the crisis took the second place compared to the overall FIBER paragraphs. The 2020 paragraphs containing the “E” dimension express a wide range of emotions mostly tied to the crisis. Many topics such as other future scenarios that could be comparable, how the firm may forge strength from the challenges or the pandemics lasting effects on everyday life have been addressed. In the following some quotes from the statements to shareholders tied to the “E” dimension are presented (see Appendix 13 for further examples):

2020 has asked a lot from all of us – from society as a whole and especially from the CTS Group, our business partners and our employees. Never before has our capability been put to such a test of mettle as in this time of the COVID-19 pandemic. Concert halls, arenas and cultural venues have been empty and forlorn for months now, by order of government authorities. An entire industry has effectively been disbarred from working […]. Never at any stage, therefore, did the CTS Group experience any kind of shock paralysis. It was clear to us from the very beginning that we would emerge stronger from this crisis by relying fully on our core competencies – technology and industry know-how (CTS Eventim, 2020).

2020 will be described as one of the most dramatic and challenging years in modern history. The Covid-19 virus has had devastating consequences for life and health, in all parts of the world with grave impacts on society. It is now a new year but the virus is still holding us in its grip and it is obvious that the effects will be felt in all parts of society for a long time to come […]. These tendencies have intensified during the pandemic which is worrisome (Saab, 2020).

Quite soon, many of us realized that 2020 would be anything but normal, and in March when Covid-19 was classified as a pandemic, life and conditions changed for us, the business community and for society in a dramatic, almost surreal way […]. The current crisis differs somewhat from both the property crisis in the 1990s and the financial crisis in 2008-2009, primarily because the pandemic is claiming lives and many people are being affected by it in a hard and unforgiving way (Wallenstam, 2020).

As presented in this chapter our overall results show that the 2020 statements where the ones that referenced the crisis the most. With the increase in crisis related paragraphs there was also a coinciding significant difference in the number of paragraphs containing the “E” dimension (Figure 14). Furthermore, the 2020 statements were the ones responsible for the statistically significant difference in the number of paragraphs containing the “E” dimension in both countries. Although not statistically significant, as mentioned earlier, paragraphs containing the “B” dimension also changed in terms of content for the 2020 statements as they reflected the struggles and cultural changes experienced by the employees of the firm for both countries’ statements. Furthermore, the results highlight no significant difference between the FIBER dimensions on a country-to-country comparison for neither of the three years’ statements.

4.4.4 Answering the Research Questions

Taking into account the preceding parts of this chapter we can now answer our research questions. Regarding our first research question: “How does a crisis affect the prioritization of SEW dimensions in family firm decision-making?” we can conclude that in the studied context of publicly listed family firms in Germany and Sweden the family firms responded to the crisis by prioritizing the dimension of emotional attachment (E). This dimension was much less prevalent before the crisis struck and the change may signal an increase regarding the degree of influence family principals’ emotions’ have on their decision making during the crisis. Further, this was accompanied by no significant

change in how the other dimensions were prioritized by the family firms in both countries. Both ability dimensions of family control and influence (F) and renewal of family bonds through dynastic succession (R) and the other two willingness dimensions of binding social ties (B) and identification with the firm (I) retained their pre-crisis prevalence. Moreover, while not significantly different in its prevalence during the crisis than before it, the dimension of binding social ties changed considerably regarding communication tied to it. The contents linked to the dimension reflected the effects of the crisis as well as its effects on the firm’s non-family member employees and the firm’s culture, showing an increase in solidarity and effort in combating the crisis.

Our second research question was as follows: “How is this prioritization different between family firms of countries with alternate governmental responses to the crisis?” To answer this question we looked at Sweden, a country whose governmental response to the crisis was more liberal than Germany’s and compared their family firms’ statements to shareholders published just prior to and during the crisis. We found no significant difference between which FIBER dimensions were prioritized by the family firms of each respective country in their statements. Both countries’ firms prioritized the dimension of emotional attachment during the crisis period. Furthermore, the 2020 statements were identified to be the source of the statistically significant difference in the emotional attachment dimension for both countries. This difference was also significant when comparing the statements of both 2018 and 2019 to 2020 in the case of both Sweden and Germany. Any differences that we observed in the other dimensions, while not significant, were consistent with the firms’ pre-crisis prioritization of the FIBER dimensions for each respective country. Thus, showing that prioritization of the SEW dimensions as expressed through FIBER did not differ significantly between the two countries during the crisis.

5 Discussion

______

In the following chapter, we present the overarching practical, theoretical and social implications of our study and outline the study’s limitations along with suggestions for future research. ______

5.1 Discussion of Findings Regarding further thoughts about the results of the research the fact that there was no significant difference in the FIBER dimensions between the two countries’ samples for all three years’ statements is surprising. When comparing the family firm’s statements when grouped by countries our results showing no significant differences for none of the three years was unexpected considering both the differing context of the governmental responses and previous research on family firms. A possible explanation for this could be the fact that our research focused on large publicly listed firms who often operate in several different countries at once. Thus, the effect of their respective home countries’ governmental responses to the crisis may have been diminished.

Further, there was a similarly significant difference for the dimension of emotional attachment between both countries’ individual statements of both 2018 and 2019 compared to their own statements of 2020. This is also interesting due to the generally higher number of German firms with paragraphs tied to emotional attachment in 2019. While some German firms did already include paragraphs expressing an emotional response to the crisis, the dimension was also present in 2019 due to topics not related to the pandemic. This also resulted in the dimension already having more than twice as many paragraphs for the German sample than the Swedish one. Thus, the fact that there was still a significant difference for emotional attachment between the 2019 and the 2020 statements of Germany family firms shows how much impact the crisis may have had on the SEW endowment of family firms. This, in turn, may further point towards a crisis pushing family firms to utilize a more emotionally charged decision-making approach during the crisis period, even if this aspect of SEW was already prioritized by them before the crisis.

Furthermore, the prioritization of the dimension of emotional attachment may also hold implications regarding the firm’s performance. Since preserving good reputation was linked to several benefits for the performance of the firm. Family firms putting a higher emphasis on emotional attachment have been suggested to perform better due to the dimension being linked to seeking to preserve the firm’s reputation (Martin & Gomez- Mejia, 2016). This drive to preserve the firm’s reputation may also be behind the increase for emotional attachment observed in our study and thus may also carry the above- mentioned benefits during the crisis period.

We were also surprised how little the firms in our sample relied on evoking their family history in discussions about facing the crisis, which could explain why the dimension of identification with the firm did not rise to prevalence in response to the crisis. However, what the family firms did rely on was expressing their gratitude and appreciation towards their employees in their efforts during the trying crisis period. Binding social ties, while not increasing significantly, remained a dimension that was both front and centre for the firms before and during the crisis. Moreover, paragraphs containing the dimension became the primary vehicle in discussing the effects of the crisis alongside those with the dimension of emotional attachment.

The dimension of binding social ties being as prominent as it was in all three year’s statements for both nations’ firms with its added focus on employee’s efforts during the pandemic is further intriguing considering works pointing to family firms as a greater source of job security during crises (Rivo-López et al., 2020). Furthermore, the change in contents that the paragraphs linked to binding social ties have shown, with examples of employee solidarity, extra effort and perseverance in the face of the crisis, echo the cultural changes observed by the likewise COVID-19 related family business research of Kraus et al. (2020). These signs of cultural change may thus be forerunners of possible long-term positive effects the crisis could bring to family firms that overcome the crisis such as strengthened bonds between the firm, the controlling family and their non-family member employees.

5.2 Contribution and Implications Our research contributed to the overall topic of SEW and its FIBER dimensions. In connection to these concepts, we answered calls for studies contributing to the topic of the COVID-19 induced crisis’ effects on family firms (De Massis & Rondi, 2020; Kraus

et al., 2020). Furthermore, by using content analysis we applied a method that has been severely underutilized in both the general realm of family business research as well as in investigating SEW through its FIBER dimensions even if it has been suggested from the very inception of the FIBER concept (Berrone et al., 2012; Cleary et al., 2019). Thus, this work further developed the method as a valid option to investigate the FIBER concept. Our results also provide an early look at a, at the time of writing, still ongoing pandemic and its implications regarding the direct effects of governmental responses and the crisis on family firms.

Starting with theoretical implications, in contributing to the topic of SEW and FIBER our results clearly support the propositions put forward by Swab et al. (2020). Our research shows SEW through its FIBER dimensions as a dynamic concept. It was affected by the COVID-19 crisis with family firms prioritizing the expression of the willingness dimension of emotional attachment. No significant changes could be attributed to the ability dimensions. This may give further legitimacy to the approach of conceptualizing SEW as a dynamic construct and may provide further support to critiques of the concept questioning how much the dimensions of family control and influence alongside renewal of family bonds through dynastic succession are able to effectively capture SEW in their current form (Hauck et al., 2016; Kellermanns et al., 2012; Miller & Le Breton-Miller, 2014; Newbert & Craig, 2017).

In terms of ethical and social implications the results also point towards family firms making conscious decisions to preserve the well-being of their stakeholders and potentially provide aid to their communities during a crisis. As mentioned above, the continued emphasis on preserving and strengthening ties to their employees in connection to their efforts in combating the crisis may signal that family firms may indeed be a source of higher job stability during a crisis as suggested by prior research (Rivo-López et al., 2020). In addition, as the increased prioritization of emotional attachment can be associated with the drive of family principals to preserve the reputation of their firm (Martin & Gomez-Mejia, 2016) family firms may put additional effort into initiatives to help their local communities or even provide aid on a more broader societal level in combating a crisis. We note here that in several of the 2020 statements we already saw examples of family firms providing equipment and aid that fall outside the realm of their regular products or services in order to assist efforts in combating the spread of the

pandemic. Thus, our results may point towards family firms playing a key role in aiding their local communities or even society on a broader level by remaining a stable source of jobs and providing aid during a crisis such as a global pandemic. This further lines up with recent suggestions that family firms may react to the emotional turmoil brought about by the pandemic through either intra-family conflicts or on the contrary, altruistic behaviour by the family (Firfiray & Gomez-Mejia, 2021). Our results point to the latter outcome being more observable, with the above example of strengthened relationships to non-family member employees and altruistic behaviour. We do note however, that the topic of intra-family conflict was not likely to be included in the analysed statements.

In terms of practical implications, our results can potentially help family firms in becoming more aware of which non-financial aspects of their firm they may focus on and accentuate in their outward communication during both a crisis period or even in connection to more general communication efforts. Our results show that the firms in our sample have most prominently focused on communicating an emotional response and on expressing their gratitude towards their employees’ efforts in combating the crisis. In contrast to these two focus areas, we found that firms in our sample did not put a bigger emphasis on family history during the crisis, which correlates to the identification dimension. However, family firms are often characterized by their long histories and long-term perspective (Gomez-Mejia et al., 2011) which usually also means overcoming past crises. Referencing family history and how these crises have been overcome in the past may be beneficial in communicating their reliability and trustworthiness in combating novel crisis scenarios. With that in mind, our results may also help family firms in potentially re-evaluating on what to focus on in their outward communication during the trying period of a crisis or even in other scenarios. The importance of doing so has already been outlined in connection to the pandemic, with family firms that prioritize clear and honest communication during the crisis and preserving their ties to non-family stakeholders having a greater edge in shaping the view of their firm to their benefit. On the contrary, not focusing on these points during the crisis has been suggested to result in damaged reputation for the firm (Firfiray & Gomez-Mejia, 2021).

Our research may also present practical implications to governmental decision-makers constructing a response to a crisis situation. The results have shown that both Swedish and German publicly listed family firms had prioritized the same FIBER dimensions in

response to the crisis, despite their respective governments seemingly diverging responses to the crisis (Granberg et al., 2021; Kuhlmann et al., 2021). Our results however only present this conclusion in connection to large, publicly listed family firms and thus do not extend to smaller private family business, who may have been impacted by the differing governmental restrictions. Thus, while governmental decision-makers may consider our results in evaluating their future restrictions’ effects on family firms, we advise that this be accompanied with future efforts in understanding these restrictions’ effects on smaller, privately owned family businesses.

5.3 Limitations

5.3.1 Limitations of Theoretical Background

Our study is preceded by an extensive review of the literature from which we derived our model and our propositions. As described in Chapter 2.1, the relevant literature was identified through a selection of particular search terms. This method entails certain limitations as it may be that the chosen search terms have been too narrow. Hence, we could have possibly missed relevant academic articles. Furthermore, with the aim of ensuring trustworthiness in our research, we have only used articles from journals in the theoretical background section that are listed on the ABS list of 2018 with a rating of 2 or higher and can therefore be classified as high-quality studies. By limiting our research this way, we may have overlooked articles that could have provided additional insights to be considered for our research. In order to identify further relevant articles and to partially circumvent the above limitations, we also considered works in the reference lists of articles.

An additional limitation in our theoretical background is connected to the topic of the COVID-19 pandemic. As this crisis is a relatively new phenomenon it has so far been only researched to a limited extent. This obviously influenced the breadth and depth of the COVID-19 related academic sources we had available when conducting our literature review. To minimize this limitation, we took care to conduct repeated keyword searches connected to the topic of COVID-19 during the period between January and May 2021. This was done to be able to take into account as many relevant COVID-19 related articles as possible. Nonetheless the ongoing nature of the pandemic means that available research results tied to it were limited at the time of writing, thus also limiting our own research.

5.3.2 Limitations of Research Design

To answer our research questions within the frame of our empirical study we chose to analyse secondary data using quantitative content analysis. This is associated with its own set of limitations as outlined in the following.

In general, it would have been possible to obtain more in-depth research specific information by means of primary data collection. However, these methods would have been coupled with their own disadvantages. Chiefly, the interview participants or survey respondents would have had to retroactively put themselves back into a time before COVID-19 to account for the temporally comparative nature of our inquires. To counter this problem, we found the comparison of secondary data published before the crisis with those published at the beginning and during the crisis to be a more apt solution.

Another limitation is the size of the firms included in our study. As some of the literature points out companies above a certain size or in the hands of later generations may no longer be family businesses in the true sense of the word due to a decreased prominence of the affective endowment of family members involved with the firm (Gomez-Mejia et al., 2011; Martin et al., 2016). Thus, it would also have been warranted to have smaller non-publicly listed family companies in our study, under the control of early or founder generations. However, in return access would have been more limited alongside the comparability of company documents.

The subject of the content analysis was the statement to shareholders which itself entails further limitations. Among others, previous research points out that these statements convey subjective assessments of companies and thus possibly gloss over certain topics or view them too negatively (Brennan & Merkl-Davies, 2013). Nevertheless, we agree with Cleary et al.’s (2019) evaluation of the method considering that subjective representation would also come into play when primary data is used. However, it should be noted that especially the dimensions “F” and “R” were addressed in the statements very infrequently. This is possibly due to the fact that these dimensions correspond to more internal family topics, especially succession, which may be only communicated to the outside when the torch is soon to be passed (De Massis et al., 2008; Sund et al., 2015). More sensitive topics in general might also be less likely to be addressed in these reports as they are primarily aimed at shareholders and suffer from their own set of subjectivity related issues (Brennan & Merkl-Davies, 2013).

5.3.3 Limitations of Data Set

A limitation of the study is its informative value due to the limited sample size. Combined with the limitations mentioned above, this leads to a limited generalisability. In addition, with regard to the sample size it should be noted that the identification process of the firms was extensive and complex. To the best of our knowledge, we included as many Swedish listed family firms that matched our set of criteria as we could find, given the specific restrictions of our operational definition. We thus adjusted our number of German listed family firms accordingly.

Furthermore, our definition of a family business in general may have limited our approach. The limitation lies in a smaller sample size. Thus, it is also possible that we have overlooked firms during the identification process which would have provided valuable insights had we used a different operational definition of family firms.

Another limitation is that none of the coders were fluent in Swedish. Thus, we choose to exclude any annual reports that were exclusively available in Swedish to avoid potentially falsifying the data due to imprecise translations. As one of the authors of this thesis is fluent in German, this exclusion was not necessary for purely German annual reports.

The selected time frame of three years used in the study is also a potential constraint to the research. The shorter time period from which we selected the statements is not comparable in comprehensiveness to other longitudinal studies (Cleary et al., 2019). We have accepted this limitation and selected a larger number of companies from various sectors to explicitly study the impact of the COVID-19 crisis. Even though we did so to be able to increase our sample size while keeping in line with our chosen criteria, our choice of studying firms from multiple sectors also presents a limitation. Thus, our sample does not account for the fact that some industries were hit more severely by the pandemic than others. We also note however, that previous research could still not fully exclude the influence of family firm heterogeneity even when factors such as industry and country were identical for the analysed firms (Cleary et al., 2019).

Another potential constraint of our research is that the German statements in our sample were authored more often by family members than their Swedish counterparts. This may have led to a stronger emphasis on the family component in the German sample and may have warped certain aspects of our data.

Lastly, it was more often the case for the German family businesses that the name of the business also corresponded to the name of the family. In the coding scheme the two dimensions “I” and “E” were directly linked to the family and the firm sharing a name. This in turn means that a source of limitation for the cross-country comparison could be that a higher number of German companies carried the family name than Swedish ones. This could have thus potentially warped the data. Despite this, our results did not show statistically significant differences in these dimensions when comparing the two countries’ samples.

5.3.4 Limitations of Data Analysis

A possible limitation of the data analysis stems from the fact that the research followed a previously established coding scheme by Cleary et al. (2019) which was not originally constructed to analyse the effects of a crisis. Due to the nature of the analysed texts, manual coding was necessary, meaning that the element of coder subjectivity could not be ruled out. The dimension of emotional attachment presented us with challenges in defining when something was to be declared as emotional and when something was only a statement. Thus, we looked for external literature to help us define this distinction more precisely (Ho & Cheng, 2016; Johnson-Laird & Oatley, 1989). However, this approach still leaves room for error on the part of the coder.

Another limitation to be mentioned in the case of data analysis is that the coders are also affected by the crisis given the still ongoing nature of the pandemic at the time of writing. This may have influenced our judgement when coding paragraphs tied to the crisis, although we aimed to be as objective and unbiased as possible when dealing with the topic.

5.4 Future Research Below we describe some possible areas for further research, considering our study, its results and limitations. In overall terms, our work opens up several potential future opportunities for more focused studies.

We would like to encourage future researchers to conduct further content analyses in connection with SEW and the FIBER dimensions. As Cleary et al. (2019) pointed out this method is clearly underutilized in the general realm of family business research. So far it has also been largely side-lined in studies exploring the FIBER dimensions of SEW, even

though the method was suggested by Berrone et al. (2012) at the very inception of FIBER. We also note that SEW is still often treated as a stable concept that changes mostly only as a result of succession (Arrondo-García et al., 2016; Gomez-Mejia et al., 2011). However, similarly to both our and other recent works future research using a FIBER conceptualization could further follow calls to investigate SEW as a dynamic concept (Nason et al., 2019; Swab et al., 2020), in relation to not only crises but other contingencies.

While content analysis is a viable method of researching SEW and its FIBER dimensions, our results also point to the potential in future endeavours using this method with other conceptualizations of the SEW dimensions. Specifically, we found our results could give support to a future content analysis using a shortened FIBER scale, such as the REI conceptualization proposed by Hauck et al. (2016). Building on how several FIBER dimensions overlapped in their elements both in our adapted and Cleary et al.’s (2019) original coding scheme, a future study could use the REI conceptualization to build a more focused coding scheme for the content analysis of the SEW dimensions.

Furthermore, studying the impact of COVID-19 on family businesses is only in its early stages in the world of academic research, given the pandemic’s recent outbreak. Accordingly, there are many opportunities to look at the impact from different angles. For instance, it could be desirable for similar future studies to our own to involve larger scale empirical data or to conduct studies in other country contexts. Larger scale data with bigger sample sizes may furthermore allow researchers to better observe the interplay between the FIBER dimensions in response to different contingencies on a larger scale (Swab et al., 2020). Future endeavours could also aim to conduct a similar content analysis of statements to shareholders to our own, albeit with the aim of using the same FIBER coding scheme to compare the statements of non-family firms with those of family businesses. This would answer more calls for testing the potential applicability of SEW outside the realm of family business research (Miller & Le Breton-Miller, 2014). It could also further build on the coding scheme’s weaknesses, such as ones related to dimension “E”, in seeing if non-family firms also responded to the crisis in a similarly emotionally charged tone.

Another option would be to focus on smaller unlisted companies that do not operate across national borders. Other studies have shown the framing effect government

responses to the crisis caused by pandemic have at least on the level of individuals (Hameleers, 2021). Thus, it is possible that smaller family businesses operating only in their national context are more affected than the ones chosen for our sample.

While in this paper we did help in narrowing the research gap concerning crisis management in family businesses, there are still many opportunities for future studies. In particular, it may be of increased interest to analyse different crises that family businesses have survived in the past by means of a content analysis of the statements to shareholders. This approach could assist in finding commonalities in how the different crises were handled, further paving the way for a better understanding of how family businesses operate in the context of exceptional circumstances. For instance, a future study could look at a longer time horizon and compare statements published during the global financial crisis with those published during the COVID-19 pandemic. Moreover, we advise future researchers to utilize multiple methods in conjunction with the content analysis of company documents. Content analysis could be an initial step to identify relevant occurrences or intriguing firms. This could then be followed up by primary data collection such as interviews or surveys.

This paper is also predominantly concerned with the impact of crises on SEW and not the actual performance of family firms during a crisis for instance compared to non-family ones. As the question of family firm performing better or worse in contrast to non-family firms during a crisis still remains unresolved, we recommend future research to renew efforts in investigating this question in the context of the pandemic (Arrondo-García et al., 2016; Minichilli et al., 2016).

In summary, content analysis has incredible potential that is currently not sufficiently explored in family business research. Likewise, the topic of crises and their effects on family firms also holds plenty of new opportunities, more so now than ever, given the COVID-19 pandemic. SEW, when viewed as a dynamic concept could assist in further investigating this topic. On a more general note, given the academic focus and attention that SEW receives, approaching it through methods and from perspectives that thus far have been underused, should prove to be beneficial to further develop the concept.

6 Conclusion

The goal of this study was to provide an early look at the impact that the still ongoing COVID-19 pandemic has had on family businesses (De Massis & Rondi, 2020; Kraus et al., 2020; Rivo-López et al., 2020). A socioemotional wealth-based approach was utilized, making use of recent suggestions of conceptualizing it as a dynamic concept where its FIBER dimensions shift in priority in response to the effects of the crisis (Cleary et al., 2019; Swab et al., 2020). In order to be able to answer the research questions of how a crisis affects the prioritization of SEW dimensions in family firm decision-making and how this prioritization differs between family firms of countries with alternate governmental responses to the crisis, a quantitative content analysis was performed on the statements to shareholders of 20 Germany and 20 Swedish family firms. Statements from the years 2018, 2019 and 2020 were analysed to observe which FIBER dimensions were expressed and prioritised just before the crisis and how these dimensions may have shifted in response to the pandemic.

In answering the first research question, the results showed that the willingness dimension of emotional attachment was the only FIBER dimension to differ significantly as the crisis emerged and took centre stage in the statements. This change was a result of the statements taking on an emotionally charged tone, reflecting the families’ strong emotional endowment and attachment to their firms coming to the forefront in their response to the pandemic. Furthermore, while the dimension of binding social ties did not differ significantly after the crisis took hold, it did keep its position as the most prominently expressed dimension. Additionally, lining up with recent research (Kraus et al., 2020) parts of the statements connected to the dimension grew to reflect the effects of cultural change and solidarity observed on the employees‘ part, that started to take root in response to the crisis. Also, in line with prior assumptions, the two FIBER dimensions tied to the ability of family firms to preserve and pursue SEW were the least prominent dimension in all three year’s reports. Additionally, the three willingness dimensions were the three most prominent ones, while also being responsible for the significant differences we observed as the crisis emerged (Swab et al., 2020). The results thus suggest that family firms may primarily react to a global crisis such as the one caused by the COVID-19 pandemic through their emotional attachment to the firm coming to the forefront and potentially influencing their decision making, while also maintaining their focus on

preserving ties to their non-family employees, which may prove crucial during the challenging period.

In answering the second research question, the results showed that despite the diverging governmental approaches Sweden and Germany have taken to combat the crisis and the possible impact these different framings of the pandemic could have on emotions (Hameleers, 2021), there was no significant difference between the responses of the two countries’ firms. Both countries’ firms prioritised the willingness dimensions of binding social ties and emotional attachment, with the latter seeing significant difference with the 2020 statements in both countries’ cases, when compared to those of the previous years. This may show that publicly listed family firms respond to a contingency on the scale of the global pandemic in a more homogenous manner, with family firm principal’s emotional attachment to the firms taking a more pronounced role and influencing their decision-making. Furthermore, they may do so regardless of the national contexts of differing governmental approaches and restrictions put in place.

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8 Appendices

Appendix 1: Literature overview procedure

Key Terms Amount of Hits Web of Science Scopus “Family business” AND “decision making” 220 241 “Family business “AND “crisis” 92 132 “Family business” AND “COVID-19” 17 13 “Socioemotional wealth” AND “crisis” 34 12 “Family business” AND “FIBER” 7 17 “Sweden” AND “COVID-19” AND 134 72 “Government” “Germany” AND “COVID-19” AND 265 184 “Government” “Prospect theory” AND “pandemic” 14 116

Appendix 2: Coding scheme (own extended elaboration based on Cleary et al., 2019)

FIBER Dimension Elements • Reference to family member making decisions • References to family appointment/resignation from Board F Family Control and Influence • References to share issues to family/non-family

• Reference to family name in product name • Reference to family name in firm initiative or services provided by the firm Identification of Family I • Reference to family in daily operational terms Members with the Firm • Reference to family history • Family bereavement

• Family donations, sponsorship, reference to social activities involving family • Reference to non-family manager/employee awards/recognition, retirements, bereavements B Binding Social Ties • Reference to long-standing supplier relationships, business allies • Reference to business partners

• Use of emotive language against competitors/threats Emotional Attachment of • References to family in decision-making alternatives E Family Members • References to superiority of family brand/method

• Reference to business transfer to the next generation Renewal of Family Bonds • Reference to transfer of Board membership to family R Through Dynastic Succession members

Appendix 3: Sample overview Swedish publicly listed family businesses

Company Revenues Employees Year Sector Family Family Family Family Website 2020 (MSEK) 2020 Founded Ownership Member Member Voting Executive Board of Rights Board Directors

Assa Abloy 87,649 48353 1994 Industrials Douglas & No Yes 40.30% www.assaabloy.se Schörling

Atrium 2,839 340 1946 Real Estate Ljungberg No Yes 50.50% www.al.se Ljungberg

Beijer Alma 4,249 2564 1983 Industrials Wall No Yes 34.80% www.beijeralma.se BTS 1,464 821 1986 Industrials Ekelund Yes Yes 40.50% www.bts.com

Elanders 11,050 6058 1908 Industrials Bennet No Yes 65.90% www.elanders.se

Fagerhult 6,816 4397 1945 Industrials Douglas No Yes 47.80% www.fagerhult.se

Getinge 29,819 10800 1904 Healthcare Bennet No Yes 50.10% www.getinge.se

Hexagon 3,770.5 20343 1992 Technology Schörling No Yes 44.80% www.hexagon.se (MEUR)

Hexpol 13,424 4550 1893 Materials Schörling No Yes 45.50% www.hexpol.se

Investor 88,462 94 1916 Financial Services Wallenberg No Yes 43.00% www.investorab.se

Lundbergs 19,887 3287 1944 Financial Services Lundberg Yes Yes 71.00% www.lundbergforetagen.se

New Wave 6,098 2064 1990 Consumer Jansson Yes Yes 82.10% www.nwg.se Group Discretionary

Nordnet 2,678 571 1996 Financial Services Dinkelspiel No Yes 21.60% www.nordnetab.se

Peab 5,891 15252 1959 Industrials Paulsson No Yes 48.20% www.peab.se

Ratos 24,071 12500 1933 Financial Services Söderberg No Yes 44.66% www.ratos.se

Saab 35,431 18073 1945 Industrials Wallenberg No Yes 40.40% www.saab.se

Securitas 107,954 355000 1934 Industrials Douglas & No Yes 29.06% www.securitas.se Schörling

Systemair 8,914 6197 1972 Industrials Engström No Yes 42.60% www.systemair.se

Traction -7.6 4 1974 Financial Services Stillström Yes Yes 40.70% www.traction.se

Wallenstam 2,131 270 1944 Real Estate Wallenstam Yes Yes 62.21% www.wallenstam.se

Appendix 4: Sample overview German publicly listed family businesses

Company Revenues Employees Year Sector Family Family Family Family Website 2020 2020 Founded Ownership Member Member Voting (MEUR) Executive Supervisory Rights Board Board Bauer AG 1,453.6 11027 1790 Industrials Bauer & Yes Yes 43.81% www.bauer.de Teschemacher Compugroup 837 7800 1987 Healthcare Gotthardt Yes Yes 45.21% www.compugroup.com Medical Cts Eventim 256.8 2409 1989 Consumer Schulenberg Yes No 38.80% www.eventim.de Discretionary Dräger Group 3,406.3 15657 1889 Healthcare Dräger Yes No 71.34% www.draeger.de

Dürr 3,324.8 16525 1895 Industrials Dürr No Yes 29.00% www.durr.de Fielmann 1,630.1 21853 1972 Consumer Fielmann Yes No 71.31% www.fielmann.de Discretionary Frosta 552 1778 1961 Consumer Staples Ahlers Yes Yes 43.50% www.frosta-ag.com Fuchs 2,378 5728 1931 Industrials Fuchs Yes Yes 55.00% www.fuchs-oil.de Petrolub Hansen & 873 1585 1919 Industrials Hansen Yes Yes 61.44% www.hur.com Rosenthal

Hornbach 4,729.2 20403 1877 Consumer Hornbach Yes Yes 37.50% www.hornbach-holding.de Holding Discretionary Knorr-Bremse 6,156.7 29714 1905 Industrials Thiele No Yes 59.00% www.knorr-bremse.de

Krones 3,322.7 16736 1951 Industrials Kronseder No Yes 52.18% www.krones.de

KWS Saat 1,283 4414 1856 Materials Büchting & Yes Yes 54.40% www.kws.de Arend Oetker

OHB 880 3029 1958 Technology Fuchs Yes Yes 70.00% www.ohb.de Schloss 338.2 1615 1888 Consumer Staples Reh No Yes 69.90% www.schloss- Wachenheim wachenheim.de Sixt 1,532 6921 1912 Consumer Sixt Yes No 58.30% www.sixt.de Discretionary Sto 1,432.9 5545 1955 Materials Stotmeister No Yes 90.00% www.sto.de Ströer 1,442.2 12514 1990 Communications Ströer & Müller Yes Yes 41.70% www.stroeer.de United 5,367.2 9638 1988 Communications Dommermuth Yes No 40.24% www.united-internet.de Internet

Uzin Utz 383.6 1318 1911 Materials Utz Yes Yes 54.00% www.uzin.de

Appendix 5: Number of firms addressing specific FIBER dimensions

Sweden – Number of Firms addressing specific FIBER dimensions F I B E R 2018 3 5 17 1 2 2019 2 6 18 4 1 2020 2 4 17 14 0 All years 5 8 19 14 2

Germany – Number of Firms addressing specific FIBER dimensions F I B E R 2018 6 8 19 4 1 2019 5 8 19 8 1 2020 2 7 20 15 0 All years 9 10 20 17 2

Appendix 6: Mann-Whitney U test results for the combined sample

Entire Sample (both Countries) 2018 and 2019 F I B E R Mann-Whitney U 764,500 765,000 682,000 665,500 780,000 Wilcoxon W 1584,500 1585,000 1502,000 1485,500 1600,000 Z -,492 -,403 -1,207 -1,814 -,459 Asymp. Sig. ,623 ,687 ,228 ,070 ,646 (2-tailed)

Entire Sample (both Countries) 2019 and 2020 F I B E R Mann-Whitney U 741,500 750,500 733,500 404,000 760,000 Wilcoxon W 1561,500 1570,500 1553,500 1224,000 1580,000 Z -,942 -,576 -,692 -4,095 -1,423 Asymp. Sig. ,346 ,565 ,489 ,000 ,155 (2-tailed)

Entire Sample (both Countries) 2018 and 2020 F I B E R Mann-Whitney U 704,500 785,500 742,000 313,500 740,000 Wilcoxon W 1524,500 1605,500 1562,000 1133,500 1560,000 Z -1,436 -,171 -,588 -5,228 -1,754 Asymp. Sig. ,151 ,864 ,557 ,000 ,079 (2-tailed)

Appendix 7: Mann-Whitney U test results for Germany

Germany 2018 and 2019 F I B E R Mann-Whitney U 193,000 183,000 154,500 164,500 200,000 Wilcoxon W 403,000 393,000 364,500 374,500 410,000 Z -,244 -,523 -1,366 -1,189 ,000 Asymp. Sig. ,807 ,601 ,172 ,234 1,000 (2-tailed) Exact Sig. [2*(1- ,862 ,659 ,221 ,341 1,000 tailed Sig.)]

Germany 2019 and 2020 F I B E R Mann-Whitney U 171,500 181,000 157,000 115,500 190,000 Wilcoxon W 381,500 391,000 367,000 325,500 400,000 Z -1,167 -,593 -1,328 -2,416 -1,000 Asymp. Sig. ,243 ,553 ,184 ,016 ,317 (2-tailed) Exact Sig. [2*(1- ,445 ,620 ,253 ,021 ,799 tailed Sig.)]

Germany 2018 and 2020 F I B E R Mann-Whitney U 163,000 197,000 195,500 92,000 190,000 Wilcoxon W 373,000 407,000 405,500 302,000 400,000 Z -1,440 -,095 -,132 -3,180 -1,000 Asymp. Sig. ,150 ,925 ,895 ,001 ,317 (2-tailed) Exact Sig. [2*(1- ,327 ,947 ,904 ,003 ,799 tailed Sig.)]

Appendix 8: Mann-Whitney U test results for Sweden

Sweden 2018 and 2019 F I B E R Mann-Whitney U 190,000 196,000 186,500 169,500 190,000 Wilcoxon W 400,000 406,000 396,500 379,500 400,000 Z -,472 -,139 -,378 -1,438 -,593 Asymp. Sig. ,637 ,890 ,705 ,150 ,553 (2-tailed) Exact Sig. [2*(1- ,700 ,925 ,718 ,414 ,799 tailed Sig.)]

Sweden 2019 and 2020 F I B E R Mann-Whitney U 200,000 193,000 192,500 88,000 190,000 Wilcoxon W 410,000 403,000 402,500 298,000 400,000 Z ,000 -,244 -,212 -3,343 -1,000 Asymp. Sig. 1,000 ,807 ,832 ,001 ,317 (2-tailed) Exact Sig. [2*(1- 1,000 ,862 ,841 ,002 ,799 tailed Sig.)]

Sweden 2018 and 2020 F I B E R Mann-Whitney U 190,000 197,000 176,500 66,000 180,000 Wilcoxon W 400,000 407,000 386,500 276,000 390,000 Z -,472 -,107 -,661 -4,185 -1,433 Asymp. Sig. ,637 ,915 ,509 ,000 ,152 (2-tailed) Exact Sig. [2*(1- ,799 ,947 ,529 ,000 ,602 tailed Sig.)]

Appendix 9: Mann-Whitney U test results between Germany and Sweden

Germany versus Sweden 2018 F I B E R Mann-Whitney U 170,000 174,500 189,000 169,000 190,000 Wilcoxon W 380,000 384,500 399,000 379,000 400,000 Z -1,122 -,838 -,310 -1,460 -,593 Asymp. Sig. ,262 ,402 ,756 ,144 ,553 (2-tailed) Exact Sig. [2*(1- ,429 ,495 ,779 ,414 ,799 tailed Sig.)]

Germany versus Sweden 2019 F I B E R Mann-Whitney U 169,000 162,000 167,000 157,500 200,000 Wilcoxon W 379,000 372,000 377,000 367,500 410,000 Z -1,271 -1,214 -,985 -1,427 ,000 Asymp. Sig. ,204 ,225 ,325 ,154 1,000 (2-tailed) Exact Sig. [2*(1- ,414 ,314 ,383 ,253 1,000 tailed Sig.)]

Germany versus Sweden 2020 F I B E R Mann-Whitney U 199,000 175,500 189,000 199,000 200,000 Wilcoxon W 409,000 385,500 399,000 409,000 410,000 Z -,052 -,823 -,317 -,028 ,000 Asymp. Sig. ,959 ,411 ,751 ,978 1,000 (2-tailed) Exact Sig. [2*(1- ,989 ,512 ,779 ,989 1,000 tailed Sig.)]

Appendix 10: Sample excerpts from statement to shareholders – “F” dimension3

Bauer Florian Bauer's relatively new function on the Management Board also brings together a number of very important factors for long-term success: Group-wide cooperation in development, innovation and digitalization as well as the promotion of our corporate culture, in other words, our focus on people (Bauer, 2018).

Compugroup And now the time has come for another important change […]. All of this is now Medical crowned by the fact that, in Dirk Wössner, we have found an outstanding new CEO and I will continue to guide the Company from the Supervisory Board (Compugroup Medical SE, 2019). And so, it is a great pleasure for me to be joining CGM as the new CEO, taking over from the legendary founder Frank Gotthardt as of January this year (Compugroup Medical SE, 2020).

Fielmann 2019 was also a special year for us as a family: we completed the change of generation in November. My father had planned the succession for a long time. After eight years working together in the company, including three years on the Management Board, he has now has fully retired from the company. I am extremely grateful for the extensive preparation he gave me. It is with a sense of both joy and duty that I will lead the second generation of our family business (Fielmann, 2019).

KWS Saat This move means we will be able to exploit opportunities to raise funds on the capital market more flexibly, yet the shareholder families, Büchting and Arend Oetker, will continue to shape and put their stamp on our company (KWS Saat, 2017-2018).

Peab Naturally I want to take the opportunity to sincerely thank one of our two founders, Mats Paulsson, who has chosen to step down from the Board of Directors. However, Mats won’t be leaving Peab completely. He will become our honorary chairman, which means he can continue to support both the Board and executive management informally. Thank you so much for your invaluable service for over 60 years Mats (Peab, 2020).

3 (Relevant for Appendix 10-14): All annual reports used can be accessed through the following link: https://drive.google.com/drive/folders/1JsrEk-7dTmifocQG8UhuPFHXoS9A-jWb?usp=sharing

Uzin Utz In addition, the past financial year marked the beginning of a milestone in the corporate history of Uzin Utz Group. Julian and Philipp Utz are now the fourth generation of the entrepreneurial family that moved up to the Board of Management and together with Heinz Leibundgut they are in charge of the fortunes of the company (Uzin Utz, 2018). This makes us more than one trustworthy family business: We never had within our company - especially at the management level - such a high percentage of family members. This is what has shaped our culture over the years, inwardly as well as to the outside (Uzin Utz, 2018).

Appendix 11: Sample excerpts from statement to shareholders – “I” dimension

Compugroup This is our strong vision and this is our responsibility, for which I have Medical personally vouched for 33 years (Compugroup Medical SE, 2019). This will be the last “Letter to Shareholders” that I write to you as the Chairman of the Management Board of CompuGroup Medical. In 33 years at the head of this fantastic company, I have been privileged to share very many successful moments with very many wonderful people with a high surplus of energy (Compugroup Medical SE, 2019).

Hansen & We are now in the 100th year of our company history and offer an alternative Rosenthal to a world of fast-paced developments and short-term optimization. The company now known as H&R started out as a small company in Hamburg. It was here, that, on December 16, 1919, Heinrich Hansen and Emil Rosenthal set up the company Hansen & Rosenthal, laying the foundation for the international company we know today (Hansen & Rosenthal, 2018).

Knorr-Bremse Our company had another reason for celebrating in 2019: the 50th anniversary of Heinz Hermann Thiele’s involvement in our business. It is his strategic vision that has turned the company into a global market leader and an industrial enterprise on an international scale, and his foresight that has perfectly positioned the company for success on the capital market, further enhancing Knorr-Bremse’s financial flexibility (Knorr-Bremse, 2019). In February of this year, we had to make a sad announcement: Heinz Hermann Thiele, for many years CEO, Supervisory Board Chair and majority shareholder of Knorr-Bremse, had passed away. One of Germany’s greatest entrepreneurs and business personalities, Mr. Thiele devoted his whole life to the service of Knorr-Bremse with unflagging zeal and personal commitment (Knorr- Bremse, 2020).

Peab In 2019 Peab celebrated 60 years of community building. It gave us a good opportunity to look back and be proud over how that little family company now, after the acquisition from YIT, consists of some 16,000 employees who go to work every day to continue to develop Peab. We have amazing employees, a unique history and strong shared values (Peab, 2019).

Sixt The starting gun to this unique mobility offer was sounded in February of this year with the presentation of the new Sixt app, which we showcased to customers, business partners, employees and the media […]. Sixt rent (vehicle rental), Sixt share (carsharing) and Sixt ride (transfer services) are all coming together in one app and all under the unified success brand of Sixt (Sixt, 2018).

Wallenstam For me personally, this is an important milestone – especially considering the fact that as CEO of the company, I have also experienced income from property management of SEK -50 million (Wallenstam, 2018). In November 2019, Wallenstam will celebrate 75 years! It feels fantastic to think back to how my father started the company in 1944, towards the end of the Second World War. He borrowed a small amount of private capital and built a detached house, close to Slottsskogen here in Gothenburg. The construction made a loss, but the company was up and running! I had the privilege of receiving the baton in 1991, during a very special period, which even today still defines Wallenstam – with commercial properties in Gothenburg inner city and residential properties in attractive locations in growth regions (Wallenstam, 2018).

Appendix 12: Sample excerpts from statement to shareholders – “B” dimension

Assa Abloy All these activities cannot happen and be successfully implemented without our talented and committed employees. Our people are our most important asset and our future depends on that we can continue to attract, retain and develop the right people and evolve with them (Assa Abloy, 2019).

Bauer My very special thanks go out to our management team and above all to our employees for their tireless efforts and commitment in these extraordinary times (Bauer, 2020).

Compugroup The development of new wonderful products, the perfect market launch and Medical reliable operation depend to a large extent on our now more than 5,000 employees. I would like to thank you from the bottom of my heart for your exceptional motivation! And I am delighted that we were able to recruit a good 400 new employees in 2018. Proof that we are also highly attractive as an employer (Compugroup Medical SE, 2018).

CTS Eventim The international expansion of our promoter network has continued unabated under the new EVENTIM LIVE brand. At the end of 2019 and the start of 2020, we acquired Barracuda Music (the Austrian tour and concert promoter), set up the Gadget Entertainment abc Entertainment Group in Switzerland and announced a partnership with Michael Cohl, the legendary US promoter based in New York (CTS Eventim, 2019).

Elanders This turbulent year has made it even more apparent to me that our employees are the key to continued success for Elanders. I would like to extend a heartfelt thank you to everyone who worked so well during this year’s exceptional situation. (Elanders, 2020).

Frosta Last but not least, our thanks go to Jürgen Marggraf, Vice President Operations and Vice Chairman for his outstanding work in his 18 years at FRoSTA. He is due to retire in March 2019 and we wish him all the best (Frosta, 2018).

Investor Since more than a hundred years, our philosophy is “to create value for people and society by building strong and sustainable businesses”. One element of this is the dividend Investor pays to its lead owner the Wallenberg foundations, that distribute more than SEK 2 bn. Annually to Swedish basic research and education (Investor, 2018).

OHB At the end of last June, the charismatic Fritz Merkle left OHB SE’s Management Board after reaching retirement age. I have always greatly appreciated his experience, loyalty and talent for spreading his enthusiasm for

space, and wish to thank him most sincerely for his 18 years of service with the OHB Group (OHB, 2018).

Peab I also want to thank our current Chairman of the Board Göran Grosskopf, who is also stepping down after many years of fantastic work for Peab’s best. Thank you so much Göran (Peab, 2020).

Securitas 2020 has been a tough year for everyone, and I am prouder than ever to be part of a team of skilled and committed people. The pandemic has hit the world hard, and we must all continue to do our part. Securitas will do so by being a reliable employer, a strong partner to our clients and a vital part of society in 2021 and for the long term (Securitas, 2020).

Appendix 13: Sample excerpts from statement to shareholders – “E” dimension

Atrium Ljungeberg We are going to remember this past year for the rest of our lives, but the hope is that we will never have to experience anything like it again (Atrium Ljungberg, 2020). The pandemic also created a deep economic crisis. The work of the Board was temporarily more tactical than strategic. When we were able to breathe again, it was great to see that Atrium Ljungberg’s strategy had held firm and I believe that our strategy will be able to lead us into the future (Atrium Ljungberg, 2020).

CTS Eventim 2020 has asked a lot from all of us – from society as a whole and especially from the CTS Group, our business partners and our employees. Never before has our capability been put to such a test of mettle as in this time of the COVID-19 pandemic. Concert halls, arenas and cultural venues have been empty and forlorn for months now, by order of government authorities. An entire industry has effectively been disbarred from working. This situation now weighs heavily on our performance figures for the past financial year, following our record-breaking year in 2019 (CTS Eventim, 2020).

Fielmann Fielmann is more productive than the competition: on average, a traditional optical store in Germany sells fewer than two pairs of glasses per day. A typical Fielmann store, on the other hand, sells more than 35 every day (Fielmann, 2018). We are much more productive than the competition and have great expectations of our managers. Our 776 stores generate between five and ten times the sales revenues of the average optician, and our bigger stores record up to fifty times the sales of an average optician (Fielmann, 2019).

Hansen & Last year, the cause of the worst economic and social challenge in German post- Rosenthal war history was incredibly tiny. The effects, however, were gigantic. If we were to name our most-hated terms of 2020 at H&R, “Covid-19”, “hard lockdown” and “7-day incidence” would certainly be at the top of the list (Hansen & Rosenthal, 2020).

Hexagon Extremis malis, extrema remedia. That is the obvious answer: the old Latin saying, desperate times call for desperate measures. But is desperation the only path to speed? Of course, we’re all incredibly grateful that a dire global emergency resulted in a “technology relay race.” Despite scientists warning of a pandemic for decades, governments, businesses, public-health officials, and citizens found themselves in a state of chaos battling an invisible enemy with few resources and little understanding when Covid-19 arrived (Hexagon, 2020).

Hornbach Holding Given the all-consuming nature of the coronavirus pandemic, which has held the world firmly in its clutches since March 2020, it is not always easy to free up the mind for other topics (Hornbach Holding, 2019/2020). It is harder than ever before to provide an outlook for the new financial year. The uncertainties outlined in the outlook are enormous […]. However, the coronavirus-related risks of renewed lockdowns or severe economic disruption, both of which currently imponderable, hang like a sword of Damocles over the rest of the financial year (Hornbach Holding, 2019/2020).

Investor As I write to you in March 2020, we are in the grip of the covid-19 outbreak, an extremely grave situation that will impact us all indefinitely. As a result, all prognosis for 2020 has become obsolete. Our role at Investor during this severe crisis is to have a continuous dialog with our companies, gather information and ensure that we maintain a level of normality in our operations. We think of all colleagues in our companies, and on how to minimize the economic effects on their jobs and families that this virus outbreak has created, we will have to deal with the economic and societal consequences of this pandemic for a long time and my main concern is that the increased polarization of society that is already happening will be reinforced by the frictions that this unique situation is creating. (Investor, 2019).

Traction We live in a changing, different and partly new world where we, like several others, a year ago prepared for a sharp slowdown in the world economy as a consequence of the pandemic outbreak and politicians’ panicked shutdowns of societies and national borders. After several years of thriving economic conditions and sharply rising asset prices for equities and real estate, there was a lot to suggest the pandemic would become a black swan causing many valuation bubbles to burst. The uncertainty that the panicked shutdowns created in terms of sudden order stoppages and halted supply chains is difficult to describe in retrospect (Traction, 2020).

Appendix 14: Sample excerpts from statement to shareholders – “R” dimension

Ratos One year has passed since I took over as Chairman and the work we have carried out has been highly stimulating and exciting (Ratos, 2018). Two years have passed since I took over as Chairman, and the atmosphere at Ratos is now productive. I would even dare to say that we are experiencing a positive trend. However, we still have the lion’s share of our work ahead of us (Ratos, 2019).

Wallenstam In November 2019, Wallenstam will celebrate 75 years! It feels fantastic to think back to how my father started the company in 1944, towards the end of the Second World War. He borrowed a small amount of private capital and built a detached house, close to Slottsskogen here in Gothenburg. The construction made a loss, but the company was up and running! I had the privilege of receiving the baton in 1991, during a very special period, which even today still defines Wallenstam – with commercial properties in Gothenburg inner city and residential properties in attractive locations in growth regions (Wallenstam, 2018).