Inertia as inhibiting competitiveness in Philippine family businesses

Abstract

Purpose

The failure to innovate has been recognized as one of the prime causes of business failure. In addition to this, the purpose of this paper is to explore whether it is the failure to act or inertia that can also explain the inability of family businesses to move forward.

Design/methodology/approach

This research documented the experiences of five family businesses in the Philippines that were unable to sustain their business operations. Only five families were identified since it was difficult to trace the business owners of businesses that failed, and once identified, not all were willing to discuss the reason for their business failure.

Findings

The cases showed that business decline actually results from the failure of family members to address the challenges brought about the change in the different life cycle dimensions. In hindsight, arresting a downward trend necessitates varied strategic approaches. While some family members may felt incapable of introducing innovation in their business, the failure to act, by itself, was a guarantee of business failure.

Research limitations/implications

The research was limited to five family businesses in the Philippines. It is possible that there may be many other reasons for family business failure based on the experiences of other families. Unfortunately, many business families in the Philippines are tight-lipped about failure, even if there are lessons to be learned.

Practical implications

This paper brings attention to the need of family business owners to be more proactive in meeting the changing needs of their family business. Formula that worked before may not be appropriate at a different time.

Originality/value

Research has shown that there are many reasons for family business failure. This paper shows the importance of transcending the feeling of inertia so that family members can be more proactive in meeting the challenges that they are bound to face as their families, their products, their businesses, and the industries they are in, move from one stage of the life cycle to another.

Citation

Santiago, A. (2015), "Inertia as inhibiting competitiveness in Philippine family businesses", Journal of Family Business Management, Vol. 5 No. 2, pp. 257-276. https://doi.org/10.1108/JFBM-07-2014-0015