The Covid eruption has forced companies to make agile decisions to ensure business survival and drive long-term economic recovery in a crisis that caused a historic collapse in the Spanish economy, 10.8% by 2020. Although the pandemic has unevenly affected businesses and sectors (with tourism and hospitality as the most punished), experts see family business as a key element in getting out of the crisis.
Which are the motives? The long-term commitment to the territory and society of its environment, the capacity to adapt and the tendency to invest with social impact, as degreased Alejandro Escribá, professor of Business Organization and director of the Chair of Family Business of the University of Valencia, promoted, among others, by the Valencian Association of Entrepreneurs (AVE).
According to data from the Institute of Family Business, nine out of ten businesses in Spain are carried out by families, which intend to make the company last in time by spending the business from generation to generation. "Whether small, medium-sized or large, they all share a number of principles that are going to be the engine of post-pandemic recovery," he explains. "They tend to preserve employment and avoid situations of ERTE or ERE and help their nearest environment, because they have very high levels of CSR (Corporate Social Responsibility)", adds the researcher of the Valencian Institute of Economic Studies (Ivie).
"The family business is, in Spain, the backbone of the economic and business fabric. It's associated with small, non-professional businesses, but it's not," he says. In the case of the Valencian Community, for example, they account for 91.1% of existing companies and companies and are present in almost all sectors, with a lower presence in regulated (financial or energy, for example).
They also generate 84% of the employment in the Community, compared to 66% in the case of Spain, and have an average size of 40 people in staff (excluding micro-enterprises), according to a study by Ivie in collaboration with the Chair of Family Business. Among them, 18.5% are classified as medium or large, with more than 50 workers, and account for 62% of the added value of the wealth generated and 65% of employment.
However, they have a lower level of competitiveness. "They are smaller in size when compared to more competitive regions and there is little weight in high-tech sectors," explains Escribá. In addition, "it has not evolved in the professionalization of its governance". For example, 79.3% have a single administrator.
They have an average size of about 40 staff workers, account for 91% of companies and 84% of jobs in the Community
This is, according to the director of the Chair of Family Business, "a pending subject" in both the Valencian Community and Spain. "Corporate governance is key to strategic decision-making," he adds. Alongside this challenge of 'professionalisation of its systems of government' is also that of digitisation and sustainable transformation in line with European guidelines.
This is exemplified by Dormitienda's CEO Monica Duart, who acknowledges that Covid's pandemic "has accelerated our strategy in the 'online' environment, which before the crisis had a much more leisurely investment path". In addition, it marks as challenges for this 2021 "adapting to changes in the consumption model" and building "a more flexible management model", as well as "an increasingly strong CSR strategy".
And it highlights the values that distinguish the DNA of the family business: "culture of effort, ingrained commitment to our environment and vocation to remain, generation after generation, and that generates solid, stable projects with solvency".
Source of the news: Las Provincias.
