Title: The impact of divorce on the family business system in SMEs - patterns of coping strategies, commitment and ownership regulations
Authors: Kajsa Haag; Leona Achtenhagen
Addresses: Centre for Family Entrepreneurship and Ownership (CeFEO), Jönköping International Business School, Jönköping University, P.O. Box 1026, 55111 Jönköping, Sweden ' Centre for Family Entrepreneurship and Ownership (CeFEO), Jönköping International Business School, Jönköping University, P.O. Box 1026, 55111 Jönköping, Sweden
Abstract: In this paper, we outline how the divorce of the main owner-manager of a family-owned SME impacts the family business system. Divorce not only represents a pronounced family failure, but it can also be a highly stressful condition for the family members involved. To date, the impact of divorce on family businesses remains understudied, despite rates of divorce as high as 50% in some countries. Drawing on almost a decade of experience with engaged scholarship at the interface between divorce and family businesses, we selected four typical case studies to illustrate different coping strategies and show how divorce can change the strategic outlook of the family business system in SMEs by altering the commitment of the owner family to maintain the business in the family as well as ensuring the business continuation per se. Moreover, we exemplify how legal ownership regulations can shape family businesses' strategic scope after divorce by impacting the financial situation. We integrate these findings into a model of family business system adaptation.
Keywords: family business system; divorce; disruption; ownership regulation; coping strategy; family systems theory; conflict; non-traditional family stages; commitment; motivational cost.
International Journal of Entrepreneurship and Small Business, 2021 Vol.44 No.4, pp.335 - 358
Received: 10 May 2020
Accepted: 06 Oct 2020
Published online: 17 Dec 2021 *