Adaptation or Expiration in Family Firms

Adaptation or Expiration in Family Firms

Organizational Flexibility in Emerging Economies

Andrés Hatum

Andrés Hatum explores determinants of organizational flexibility in this examination of four family-owned companies, two flexible and two less flexible, from the edible oil and pharmaceutical industries. By means of an innovative analysis – including longitudinal analysis, coding analysis, statistical analysis and the use of original display charts – he illustrates the determinants of flexibility and sheds light on the process of transformation and adaptation of family firms, an area that has not yet been the subject of extensive empirical inquiry.

Chapter 4: Adaptive Responses Under Competitive Pressures

Andrés Hatum

Subjects: business and management, entrepreneurship, family business, organisational behaviour


Chapter 3 underlined the competitive pressures firms underwent during the 1990s. We described these firms as being in a hypercompetitive or highly turbulent environment. Craig (1996) and Volberda (1999) point out that hypercompetitive environments have precipitated far-reaching changes in firms’ competitive position and have forced them to transform in order to compete effectively. The adaptive responses of firms under hypercompetition would therefore vary according to the extent to which the transformation process was undertaken (Volberda, 1997). The adaptive responses of the companies under analysis are, therefore, the main concern of chapters 5–8. In his seminal work, D’Aveni (1994) points out that in hypercompetitive environments, competitive advantages are quickly eroded. Companies therefore have to be more concerned about creating new competitive advantages than sustaining old ones. D’Aveni (1994) suggests that companies have to disrupt their own advantages and the advantages of competitors. These strategies need speed and surprise to enable companies to seize opportunities first. Questions arise as to what strategies are needed in such highly competitive environments? And what organizational and managerial challenges are required to allow a company to face hypercompetitive environments? At the strategic level, the literature has emphasized the importance of product innovation, process and knowledge as competitive and disruptive advantages. In presenting a model for understanding firms’ competitive advantages, Nault and Vandenbosch (1996: 342) assert that in hypercompetitive markets companies should cannibalize their own advantages. For them it is better to ‘eat your own lunch before someone else does’. Such a strategy requires companies...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information