Our 2020 Conference Chairs Maria Concepción López -Fernández, Unai Arzubiaga and José Carlos Casillas, share some insights on the current situation of family businesses in Spain and how they reacted to the recent global crisis. This article is based on data from the Spanish Family Firm Institute (Instituto de Empresa Familiar) and on an interview with its General Manager: Dr Juan Corona. In Spain 90% of private companies are family businesses, who create almost 70% of private employment and contribute about 60% of GDP. Thus, family businesses are regarded as the roots and backbone of the Spanish economy, guaranteeing stability, development and the welfare state.
The Coronavirus emergency has with no doubts changed everyone’s lives lately. What has been the impact of the recent emergency on Family Businesses in Spain?
In the case of Spain, the declaration of the state of emergency has resulted in a significant reduction in the volume of activity, although it is true that with very important differences between the different sectors, since some of them have not been affected by pandemic control measures, while in others the drop in activity has been literally 100%.
At the same time, compliance with sanitary protection measures has forced the remodelling of many of the business facilities, and even modified the operation of their production chains.
Despite this, significant efforts have been made to reduce the drop of employment, achieving generally very positive results.
How did these changes translate as companies’ initiatives (or strategies)?
In this sense, family businesses are taking advantage to modify some of their strategic behaviours for the future, both internally and externally.
In this respect, remote working procedures that were already being carried out in the leading companies are being greatly reinforced by the development of technological platforms and by changes in the company’s work culture. On the other hand, sales procedures are also intensifying through e-commerce platforms.
What are the challenges in the short term? And in the long term?
Indeed, family companies, and especially the larger ones, are using this period of great restrictions on productive capacity in order to redesign the organization and internal operating procedures. At the same time, they are working on the diversification of suppliers and raw materials, both geographically and technologically, in order to be better prepared for possible similar crises in the future.
Will there be any side effects for the “Made in Spain” market?
The image and prestige of large Spanish family businesses will be greatly reinforced because of the response they are offering to the crisis. The establishment of strict measures to protect the health of its workers, the efforts to preserve the level of employment, as well as its important work in solidarity actions, are undoubtedly generating a very positive assessment by both workers and society.
What are the responsibilities of Spanish family businesses as ambassadors of their territory?
One of the essential characteristics of family businesses is their embeddedness in the territory, which is why, immediately, our companies began to help the public administration, both at the state and regional level. The fact that they are strongly internationalized companies contributes, in a very positive way, to reinforcing Spain’s image abroad.
In the last few weeks we had a good opportunity to stop and listen to ourselves. With a positive attitude, is it possible to see this emergency as an opportunity to improve our lives and businesses? If yes, how?
Especially at this time, it is more important than ever to value the family business as a starting engine of the economy, as a generator of employment, as a basis for the future and as a source of maintenance of the welfare state.
Consequently, we think that it is a good time to defend the values of family businesses as a benchmark for decision-making in periods of crisis such as the current one, highlighting above all their ability to reach consensus for the common good beyond differences, its ability to combine economic profitability and social commitment and its permanent long-term strategic vision.
Thank you Dr Corona for your insights.
Beyond their economic importance, family businesses have a series of specific characteristics that increasingly make them a social reference. The values that characterize and differentiate them have become an important business asset. Its good practices are recognized even by investment firms based on long-term value generation, which often bet on family businesses as a guarantee of stability, growth and sustainability. Furthermore, in difficult times such as the crisis arisen as a consequence of Covid-19, Spanish family business have shown again their commitment with the society through different initiatives. Below, we show only a few ones of the biggest Spanish family business however, also many Small and Medium Family Business has been involved in social and solidarity actions in their regions:
