How Do Family Firms Manage Risky Situations ? An Organizational Resilience Perspective

Nowadays, family firms account for a large part of the economy all around the world. Their longevity supposes that their unique characteristics make them efficient at managing risks in turbulent times. Drawing upon the concept of organisational resilience, this article proposes to theoretically investigate how the unique nature of family firms affects absorption, renewal and learning capacities. Based on these reflexions, this article proposes that the family character of the firm is positively related to absorption and learning capacities while being negatively linked with renewal capacity. It also stresses the importance to consider a contingency framework to better understand organizational resilience within family firms. Finally, it provides directions for future research to address various empirical gaps in the field.


Introduction
The economic turmoil we faced after the financial crisis had a large impact on firms' survival.Indeed, all around the world, numerous firms went bankrupt or invested less than usual.Downsizing was a daily practice used by manager to reduce costs as much as possible (Block, 2010).Such a situation is not unique over time since several crises have already sprinkled in the past, causing job cuts and slowing down economy.Nevertheless, throughout the ages, family firms seem to overcome these uncommon situations if we refer to the large proportion of family businesses that are striving all around the world (La Porta, Lopez-De-Silanes & Shleifer, 1999;Claessens, Djankov & Lang, 2000;Faccio & Lang, 2002;Anderson & Reeb, 2003;Ifera, 2003;Duh, Tominc & Rebernik, 2009).Chrisman, Chua and Steier (2011) suggest that this greater ability to overcome critical situations arises from the unique nature of family businesses that exhibit high levels of organizational resilience to cope with turbulent times.
Organizational resilience has historically been approached in organisations prone to risky situations (Weick & Sutcliffe, 2007).It is quite recently that this concept has been applied to classical organizational settings in order to shed new light on the way to manage risk during periods of disruptions (Hollnagel et al., 2009).Especially, recent works in the field try to extend the analysis to organisations oriented towards profitable efficency (Altintas and Royer, 2009;Hollnagel, Journé & Laroche, 2009).However, organizational resilience remains an underinvestigated topic in the family business field (Chrisman et al., 2011).Indeed, although evidence shows that family firms present an outsanding longevity (James, 1999, Miller & Le Breton-Miller, 2005;Corbetta & Salvato, 2012), the literature is relatively scarce regarding the analysis of resilience in the family business context.
To address this gap, this paper proposes to explore how family firms' specificities affect the three dimensions of organizatinal resilience, i.e. absorption, renewal and learning (Hollnagel et al., 2009),with the aim of providing a more fine-grained understanding of the ability of family firms to deal with risky situations when compared to their nonfamily counterparts.By so doing, we address a recent call for developing research avenues that should be valuable to the family business community (Chrisman et al., 2011).Furthermore, this article proposes various directions for future research that could be useful to explore in order to increase our knowledge on organizational resilience in the family firm context.This article is structured as follows.First, we introduce the concept of organizational resilience.Second, each dimension of resilience is analysed and propositions are made in separate sections.Afterwards, research directions are identified and proposed.Finally, theoretical contributions, limitations, and conclusion are proposed in the last section.psychology, resilience is defined by Cyrulnik (2001) as an inherent characteristic of an individual that allows him/her to overcome suffering, learn from painful experiences, and become stronger.According to this definition, involvement in business venturing may be seen as a process of self-image rebuilding, affirmation and independence that contribute to take revenge against bad experiences from the past (Bernard, 2008).In management sciences, organizational resilience is approached under the lens of crisis management and high reliability organizations (Weick & Sutcliffe, 2007).According to this perspective, the core of the analysis is transferred from individual to organizational and group levels in order to understand the ability of the firm to absorb, bounce back and learn in a changing environment (Weick & Sutcliffe, 2007).Hollnagel (2006, p.16) argues that "the essence of resilience is the intrinsic ability of an organization to maintain or regain a dynamically stable state, which allows it to continue operations after a major mishap and/or in the presence of a continuous stress".These approaches contribute to a better understanding of the factors and processes that allow firms to overcome bad periods and to become stronger.Moreover, they also give the opportunity to deeply analyse how resilience capacity is built and perpetuated over time (Hollnagel et al., 2009).
Organizational resilience may be characterised by several aspects or dimensions.Coutu (2002) argue that resilient firms are pragmatic and face reality without showing excessive optimism, have a strong system of shared values which enhances sensemaking when they meet difficulties or challenges, and are ingeneous since they can use their existing resources to face unexpected situations.Hamel and Vä likangas (2003) identify four challenges that firms have to complete in order to be considered as resilient organisations.Cognitive challenge refers to the awareness of organisations that have to be realistic regarding changes and their consequences.Strategic challenge supposes that organisations show imagination capacity to design new strategic orientations which renew the older ones.Political challenge is directly bound with the reallocation of resources that puts forward future promising ideas and removes obsolete products and programs.Ideological challenge involves proactiveness and a continual quest for new opportunities.Consequently, resilient firms combine a defensive approach based on ex-ante cautiousnness regarding risk management so that they can efficiently cope with an exogeneous shock when it occurs, and a proactive approach based on creativity and imagination concerning solutions implemented to regenerate processes, products and services (Bé gin & Chabaud, 2010).Beyond that, learning from past crises is a relevant process in order to take advantage from discontinuity caused by shocks since it allows organisations to identify weaknesses and correct them (Christianson, Farkas, Sutcliffe & Weick, 2009).In sum, organizational resilience is made up of three fundamental capacities: absorption, renewal and appropriation (Weick & Sutcliffe, 2007).
Historically, the dimensions of organizational resilience have been approached in organisations prone to risky situations.For example, Weick and Sutcliffe (2007) analysed how wildland firefighters manage unexepected evenments which happened during their intervention in Los Alamos, or how effective performance is influenced by the expected, the unexpected, and the mindfulness in the aircraft carriers.While these researches shed new light on the way to overcome dramatic events, it is quite recently that the concept of organizational resilience received greater attention in managerial and organisational contexts (Hollnagel et al., 2009).More specifically, recent works in the field try to extend the analysis to organisations oriented towards profitable efficency (Altintas & Royer, 2009;Hollnagel et al., 2009) and noneconomic goals (Chrisman et al., 2011).Despite this enthusiasm, resilience abilities of family firms remain underinvestigated (Chrisman et al., 2011).Indeed, although evidence has been shown that family firms present outsanding longevity (James, 1999, Miller & Le Breton-Miller, 2005;Corbetta & Salvato, 2012), literature is relatively muddled in the analysis of resilience in this particular context.
Prior works underline that family firms are sustainable (Stafford, Duncan, Danes & Winter, 1999;Olson et al., 2003) and longer-term oriented (Miller & Le Breton-Miller, 2005;Lumpkin & Brigham, 2011), so that longevity becomes a common pattern of these organisations (Corbetta & Salvato, 2012).Nevertheless, longevity does not mean that family firms are resilient since the large number of family firms observed in the world may result from the temporary advantages of family involvement during the early stages of venture development (Chang, Chrisman, Chua & Kellermans, 2008) or the organization of economy around family units (Nicholson, 2008).Moreover, Chua, Chrisman and Chang (2004) show that family involvement may come later in the life cycle of a firm, suggesting that family organizations are more able to thrive over time.These results seem to indicate that organizational resilience is a component of family firms even if they have to be considered as a group of heterogeneous companies (Chrisman et al., 2011).Therefore, it is reasonable to conceive that family firms present specific advantages (Habbershon & Williams, 1999;Arrè gle, Hitt, Sirmon & Very, 2007) that make them more able to cope with changing environments and financial constraints, so that they may be assumed to be resilient (Lengnick-Hall & Beck, 2005;Bé gin & Chabaud, 2010;Bloch, Kachaner & Mignon, 2012).
The family business literature is full of examples showing that family firms have resilience potential.Patel and Fiet (2011) show that fundamental patterns of family firms may explain the implementation of governance mechanisms inducing better processes associated with the search, identification and exploitation of opportunities.Sirmon and Hitt (2003) as well as Gedajlovic and Carney (2010) argue that development and utilization of social capital is a specific advantage of family firms when they cope with difficulties.Lumpkin and Brigham (2011) suggest that futurity, continuity and perseverance are three essential pillars of long-term orientation that positively contribute to resilience.However, they also mention that intertemporal choices may lead to misunderstanding between the past, the present and the future, and therefore damage the resilient nature of long-term orientation.Although these findings are particularly relevant to assess organizational resilience within family firms, structuration is needed in order to isolate the impact of family firms' characteristics on each aspect of resilience.This paper tries to fill this gap by analyzing how absorption, renewal and learning capacities are affected by the idiosyncratic nature of family businesses.

Absorption Capacity
The absorption capacity of a firm refers to "the ability to absorb strain and preserve functioning despite the presence of adversity" (Weick & Sutcliffe, 2007).Therefore, resources and will on the part of the managers (Bé gin & Chabaud, 2010) are needed to manage both internal adversity such as rapid change, lousy leadership, performance and production pressures, and external adversity such as increasing competition, demands from stakeholders or economic turmoils (Weick & Sutcliffe, 2007).Beyond resources, it is more the firm's ability to immediately mobilise them that contibutes to the capacitity to overcome external shocks.Indeed, resources may be potentially mobilisable to external stakeholders, or available in the firm under the form of organizational slack (Cyert & March, 1963) that prevents it from environment disturbances and stimulates innovation by reallocating resources according to the immediate needs of the organisation (De Carolis, Yang, Deeds & Nelling, 2009).
Resources availability and use are therefore two key elements of absorption capacity.Explanations arising from the resource-based view of the firm (Barney, 1991) can explain why family firms develop better absorption skills during periods of disturbances.Habbershon and Williams (1999) define family firm's resources as "familiness", i.e. a unique bundle of resources because of the systems interaction between the family, its individual members and the business.The configuration of these unique, valuable, inimitable and hardly substituable resources (Barney, 1991) confers organisational advantages to family firms so that their competitivity is enhanced (Barney & Zajac, 1994).Indeed, such allocation of resources provides family firms with a sustainable competitive advantage (Zahra, 1996;Kuratko et al., 2005;Kellermanns & Eddleston, 2006) that make them better performers in comparison with their non-family peers (Coleman & Carsky, 1999;Anderson & Reeb, 2003;Andres, 2008;Martikainen, Nikkinen & Vahamaa, 2009).Therefore, performance outcomes in family firms are more likely to facilitate the access to financial resources and take the form of higher levels of cash-holdings (Ozkan & Ozkan, 2004), debt ratios (Gallo & Vilaseca, 1996) or a lower cost of debt (Anderson & Reeb, 2003).As financial resources may be fastly changed into other kind of resources, their availability may make it easier to overcome other resource constraints such as a lack of human or physical resources (Wiklund & Shepherd 2005), enabling family firms to absorb disturbances more easily and pursue their strategical choices (Bourgeois, 1981;Zahra, 1991) when a shock occurs (Bloch et al., 2012).However, although these resources are available inside the firm, it is more the reconfiguration of old resources and the integration of new resources into a unique and valuable configuration that are important to foster dynamic capabilities (Barney, 1991;Amit & Schoemaker, 1993).To reach this goal, a governance structure based on strong social ties is needed to guide the bundling and deployment of resources (Chirico & Norqvist, 2010).Family firms being a form of governance characterised by strong and durable relations through kinship ties (Sirmon & Hitt, 2003;Arrè gle et al., 2007) since they develop a lasting and influential family social capital (Arrè gle et al., 2007) built on interdependence, interaction, stability and closure (Nahapiet & Ghoshal, 1998), the common system of meanings developed in family firms induce fast and efficient decision-making (Chirico & Salvato, 2008).Therefore, family firms are more likely to be flexible and to develop dynamic capabilities that foster their ability to cope with immediate environmental disturbances (Chirico & Nordqvist, 2010).Based on these elements, the following proposition is made: Proposition 1: The family character of the firm will be positively related to absorption capacity.

Renewal Capacity
To be sustainable, companies must act and imagine innovative solutions when they face unexpected situations (Hamel & Vä likangas, 2003;Lengnick-Hall & Beck, 2005).In this regard, Weick and Sutcliffe (2007) define the renewal capacity as the ability of a firm to recover or bounce back from untoward events by developing innovative and creative initiatives.Therefore, it implies that the firm has to develop new activities and/or rethink existing activities in order to make the organisation more reliable (Bé gin & Chabaud, 2010).This capacity is related to the entrepreneurial orientation of the firm (Miller, 1983;Lumpkin & Dess, 1996) Research on entrepreneurial orientation has shown that entrepreneurial behaviours and attitudes are needed to generate firm's short-and long-term success (Zahra, Neubaum & Huse, 2000;Dess et al., 2003).Indeed, in a constantly changing world, seeking new opportunities is required to ensure family firms' sustainability since future profits arising from existing operations are uncertain (Zellweger & Sieger, 2012).However, family firms that survive and thrive across generations are not always entrepreneurially oriented.Indeed, several studies reveal that family firms display lower levels of entrepreneurial orientation in comparison with nonfamily firms (Short, Payne, Brigham, Lumpkin & Broberg, 2009;Madison, Runyan & Swinney, 2014).Most scholars explain this difference by the risk-averse profile of family businesses that prefer incremental innovation or alternative strategic options to secure the future of the company (Block, Miller, Jaskiewicz & Spiegel, 2013).Other researchers point that the proactive nature of entrepreneurial orientation may be seen as irreconcilable with the long-term horizons of family firms since it may engender conservatism (Covin, 1991), strategic simplicity and inertia (Miller, 1983;Corbetta & Salvato, 2012).
The abovementioned arguments therefore suggest that family firms exhibit lower levels of renwal capacity, which leads us to suggest the following proposition: Proposition 2: The family character of the firm will be negatively related to renewal capacity.

Learning Capacity
Being resilient implies a third capacity, namely learning from past shocks in order to grow and develop self-learning processes (Christiansson et al., 2009).Weick and Sutcliffe (2007) argue that learning capacity is the ability of a firm to learn and grow from past episodes of resilient action.It implies that failures have to be recognised as a contribution to learning rather than be ignored or neglected (Thorne, 2000).Under that lens, Altintas and Royer (2009) indicate that the awareness of a crisis and its effects is essential to question practices and routines efficiency to enhance post-crisis learning.Developing such a process may foster longevity by preventing organisations from an hostile environment characterised by technological breakthroughs, economic shocks, and political conflicts (Duncan, 1972).Indeed, an effective post-crisis learning process may contribute to turn crisis into opportunities since it allows the firm to avoid future crises, limits their impact, and manages them in a more efficient way (Ursacki-Bryant, Smart & Vertinsky, 2008).In that sense, Altintas and Royer (2009) found that post-crisis learning leads to the implementation of better suited organisational structures and the deployment of new strategies so that next crisis are managed easilier.Therefore, post-crisis learning is a reactive process that may enhance proactive behaviours (Zahra, 2008), so that absorption and renewal capacities, and thus resilience are fostered.
However, whereas post-crisis learning is supposed to increase organizational resilience, lessons are not always learned since causes may be deeply embedded in institutional environment, organisational structure, and culture (Vaughan, 2005).Hence, learning capacity is subject to be affected by the oragnizational context.Indeed, learning process may be improved in organisations where dynamism, autonomy, participation are promoted rather than in rigid and non-participative organisations.In the context of family firms, the long-term cultural orientation as well as the participative strategic-making style foster learning capacity (Zahra, Hayton & Salvato, 2004).Indeed, family owners have a tendency to behave as stewards of the organization to guarantee the future of the company (Eddleston, Kellermanns & Zellweger, 2012).As such, they are highly committed to the organization and share their long-term vision with nonfamily employees that are involved in decision-making (Miller, Le breton-Mille & Scholnick, 2008).In that context, family and nonfamily members are more able to learn from past events and to deploy corrective actions since they will be open to constructive debates about the improvement of the current firm's processes (Talke, Salomo & Kock, 2011).Based on these arguments, the following propositon is suggested: Proposition 3: The family character of the firm will be positively related to learning capacity.

The Heterogeneity of Family Firms and Organizational Resilience
Taking into account the heterogeneity of family firms, several studies underline that a variety of family businesses exist and that their distinctive nature could explain variations in their resilience capacity (Chua, Chrisman, Steier & Rau, 2012).For instance, some family firms could exibit lower levels of cash-holding and higher levels of debt ratios because family owners are more oriented towards risk-taking (Gomez-Mejia, Haynes, Nunez-Nickel, Jacobson & Moyano-Fuentes, 2007), which could alter the absorption capacity in the case of unexpected disturbances.Regarding the renewal capacity, some scholars argue that family firms' particular culture and power structure may positively or negatively influence strategic renewal (Salvato, 2004;Zahra et al., 2004) while others claim that family firms create a unique context that fosters entrepreneurship through stewardship behaviors (Kellermanns & Eddleston, 2006) and family owners' long-term horizons (Zellweger, 2007).Concerning the learning capacity, some family firms are better able to learn from past experience thanks to the participative culture that foster knowledge integration (Chirico & Salvato, 2008;Chirico & Nordqvist, 2010), while others encounter emotional distress arising from relationship conflicts between family members from different generations (Kellermanns & Eddleston, 2004), which negatively affects learning capacity.
These inconsistencies suggest that the dimensions of organizational resilence should be investigated under the lens of a contingency framework that integrates internal contingencies to consider the heterogeneous nature of family firms (Sciascia & Bettinelli, 2013).Indeed, the complexity of family firms in terms of governance structure (Nordqvist, Sharma & Chirico, 2014), tradeoff between economic and noneconomic goals (Gomez-Mejia et al., 2007), resources (Habbershon & Williams, 1999) and generational issues (Cruz & Nordqvist, 2012) may be considered as potential moderators of the relationship between the family character of the firm and the dimensions of organizational resilience.Therefore, the following propositions are made: Proposition 4: The positive relationship between the family character of the firm and absorption capacity will be moderated by internal contingencies.
Proposition 5: The negative relationship between the family character of the firm and renewal capacity will be moderated by internal contingencies.
Proposition 6: The positive relationship between the family character of the firm and learning capacity will be moderated by internal contingencies.

Directions for Future Research
Based on the propositions suggested above, we provide several avenues for future research development.First, empirical studies are needed to validate the application of the concept of organizational resilience in family firms.Therefore, launching a large project on a unique sample that enables the collection of information and data related to each dimension of resilience may be relevant in order to assess absorption, renewal, and learning capacities, and thus organizational resilience as a whole.Although several proxies already exist to assess each dimension of resilience separately, a construct of organizational resilience could be developed to better capture this important concept of the risk management literature.With such a measurement, scholars would have the opportunity to link organizational resilience with several firm-level outcomes and confirm the beneficial aspects associated with this concept.
Second, considering interactions between dimensions of resilience would deepen our current knowledge on organizational resilience.Given that post-crisis learning may improve absorption capacity when a similar shock happens in the future (Altintas & Royer, 2009), organizational resilience may be seen as a continual improvement process.Since it has been stated that learning capacity may be fostered over time in family firms, it would be interesting to determine whether improved learning capacity contribute to the absorption capacity over time.In order to understand these interactions, case studies should be used so that interdependencies between dimensions may be reported under a temporal perspective, enabling to clarify the link between the family character of the firm and each dimension of organizational resilience.Third, while it was clearly shown that family firms differ from their nonfamily counterparts in terms of organizational resilience, it would also be important to build studies that take into account the heterogeneity among family firms (Chua et al., 2012).To lead such investigations, it is often necessary to adopt a contingency framework that allows researchers to consider the role of organizational contexts in the analysis.One internal contingency that could be crucial to investigate is the role of the governance structure on the ability of family firms to be resilient.As such, linking different degrees of family involvement at various levels of governance, i.e. family involvement in ownership, the top management team and the board of directors, with organizational resilience could offer a more fine-grained understanding about the role of corporate governance in shaping decisions that foster the ability of the firm to overcome critical situations.For instance, it would be particularly interesting to develop studies that investigate how the governance structure moderates the relationship between the dimensions of organizational resilience and firm performance.By so doing, researchers could identify the governance factors that alter the effectiveness of organizational resilience.
Fourth, we could also imagine to analyse how particular factors affect each dimension of organizational resilience within family firms.Indeed, it could be that family firms' specificities positively affect one dimension of organizational resilience while hampering another one.For example, having higher levels of cash-holding could be beneficial to the absorption capacity but it could also be a sign that the firm is risk averse and privilege lower levels of renewal to keep the company strong in the case of financial distress (Hollnagel et al., 2009).In the same vein, higher levels of family involvement in decision-making may have positive effects on group cohesion that is required to ensure effective learning (Chirico & Nordqvist, 2010), but it could also reduce the ability of the firm to renew its activities since family members are often more conservative (Kelly, Athanassiou & Crittenden, 2000) and lack the general knowledge required to engage in effective renewal (Stewart & Hitt, 2012).
Fifth, another points that must be acknowledged with regard to the specific nature of family firms is the predominance of noneconomic goals for family members.Indeed, prior research reveals that family members' reference point in decision-making is the preservation of socioemotional wealth (SEW), i.e. the stock of affect-related value derived from the controlling position of a family in a particular firm (Gomez-Mejia et al., 2007).SEW encompasses several nonfinancial aspects such as family control and influence, identification with the organization, emotional attachment, dynastic succession, and renewing family ties (Berrone, Cruz & Gomez-Mejia, 2012).Thus, family members take decisions that limit SEW losses even if such decisions deprive the organization from economic gains.It is more than likely that the predominance of SEW objectives would not be without consequences on organizational resilience.Therefore, future research should investigate how SEW and its components may affect organizational resilience and its individual dimensions.
Finally, a last important factor that could be included in the model is the role of generational stage, i.e. the generation in charge of the company (Sciascia, Mazzola & Kellermanns, 2014), which would allow researchers to understand organizational resilience under a temporal perspective.Indeed, family firms drastically differ depending on the generation that controls the organization.For instance, later generation family members dedicate less attention to noneconomic goals and prefer to privilege the economic welfare of their own family branch over the family business (Ensley & Pearson, 2005).Accordingly, they are more inclined to extract private benefits to nurture the family wealth, thereby depriving the organization of essential resources for absorption and renewal capacities (Miller, Le Breton-Miller & Lester, 2011).Moreover, increased family conflicts in later generation family firms could hamper the learning capacity as it impedes knowledge integration (Chirico & Nordqvist, 2008).These examples clearly illustrate that generational stage is central in the understanding of organizational resilience and its dimension.

Conclusion
It has been argued that an explanation for family firms' longevity is their ability to overcome crisis periods and to learn from disturbances (Bloch et al., 2012).Therefore, the objective of this paper was to shed new light on the concept of organizational resilience in family firms by providing several propositions and directions for future research, a topic that has been overlooked in the family business literature (Chrisman et al., 2011).This paper contributes to the literature in several ways.First, the present research responds to a call for a better understanding of organizational resilience in the family business field (Chrisman et al., 2011).Indeed, the conceptual framework proposed in this paper is a first try to deeply analyse each dimension of resilience in family firms.By so doing, this article extends the scope of organizational resilience to family firms, a topic that must receive greater attention from the academic field.Furthermore, the suggestions made in this article shed some light on the concept of resilience without being exhaustive enough to be considered as complete.This awareness opens up new avenues for research in order to deepen our current understanding of each dimension of resilience.Empirical as well as exploratory research is thus needed to validate or invalidate the conceptual frameworks previously presented and add other family firms' features that might exert an influence on these dimensions over time.
This article also suffers from several limitation that must be acknowledged.First, the scope of organizational resilience was limited since we focused on the ability of the firm to overcome external shocks.However, organisational resilience is also related to disturbances appearing within the firm, which implies other corrective actions to deal with critical situations.For instance, while an organisation has the opportunity to implement preventive measures which diminish the occurrence of internal disruptions, external shocks are unpredictable so that it is impossible to prevent them to occur.Therefore, the mobilisation of resources allowing the firm to cope with internal and external shocks will vary depending on their origins.Under that perspective, family firms' characteristics that enhance or hamper resilience potential will also depend on the crisis situation.Consequently, the analysis of organizational resilience in family firms could be improved by determining which features of family firms would influence their ability to treat internal disruptions.
Moreover, this paper considers each dimension of resilience independently.As previously mentioned, there is no doubt that interactions between these dimensions exist.For instance, post-crisis learning may exert a positive influence on the management of similar disturbances in the future, so that absorption capacity is improved.In the same vein, renewal may not be implemented until the shock has been absorbed since developing new strategies requires the availability of resources in order to be deployed.Besides, pursuing proactive and innovative strategies that positively contribute to renewal capacity may also foster learning through the integration of new knowledge within the firm.Therefore, considering organizational resilience as a continual improvement process might be relevant in order to take into account interdependencies between dimensions.Additionally, as this paper constitutes a first attempt to analyse organizational resilience towards three distinct dimensions in the context of family firms, additional and complementary factors might be added in order to improve the completeness of our analysis.
Finally, we hope that this paper will encourage researchers to investigate the application of organizational resilience within family firms since it is often a crucial factor of firm's survival and longevity.