Strategic Agility and Familiness: Family Firms’ Rudders to Navigate the VUCA World

Working Papers
Bhatnagar, Navneet., Ramachandran, Kavil., Ray, Sougata. "Strategic Agility and Familiness: Family Firms’ Rudders to Navigate the VUCA World"
Abstract:
We live in unpredictable times characterized by high volatility, uncertainty, complexity and ambiguity (VUCA) in the macroenvironment, which renders strategic planning ineffective (Mack et el., 2015). However, VUCA also offers opportunities, provided that businesses develop better sense-making ability and make appropriate strategic decisions (Bennett & Lemoine, 2014). Family controlled firms, the dominant form of business organization across the world (Ward, 2011), operate with long-term orientation. On account of the owner family’s network and other unique resources, and their keen interest in preserving financial and emotional wealth, family firms are likely to respond to environmental changes in a manner that is distinct from non-family firms. However, firm-level antecedents that shape family firms’ strategic decisions in an uncertain environment have not been adequately examined. Employing multiple-case method, this paper attempts to address that crucial gap and extend strategy and family business literature. Based on in-depth case studies of 15 publicly traded Indian family firms, the study also aims at examining how heterogeneity in family firm’s - (1) strategic agility, and (2) familiness resources and capabilities basket - influence its strategic decision-making in volatile and uncertain times. On the basis of the common patterns that emerge from the preliminary study of these cases a strategic framework has been conceptualized that identifies four distinct strategic decision-making profiles of family firms. These four family-firm types are tentatively labeled drawing an analogy from the animal world. As we develop this research, we aim to validate the framework by juxtaposing it with similar assessment of non-family firms (i.e., their strategic agility and resources and capabilities). The paper promises to have significant implications for strategic management of family firms and aims to contribute to our understanding of strategic decision-making under uncertainty in family business context.