Hyderabad, Mar 30 (IANS): A new study by STEP Project Global Consortium and KPMG Private Enterprise has found that the unique structure of family businesses empowered them to respond to the impact of Covid-19.

The involvement of the family and their long-term mindset has enabled them to demonstrate resilience in the face of the pandemic, which has placed them in a key role to lead the economic recovery, says the report.

Titled 'Mastering a comeback: How family businesses are triumphing over Covid-19', the report includes insights from nearly 2,500 family businesses and more than 500 non-family businesses, across 75 countries.

Thomas Schmidheiny Centre for Family Enterprise, Indian School of Business (ISB), was the only member from India conducted the survey in India.

"Lower percent of companies in India (29 percent) took actions to reduce/eliminate labor costs when compared to the global average of 36 percent. Emphasis on cost reduction through cutting operating costs, cut down on investments, restructuring, deferring payments and expenses, and reducing the top management team's compensation was more in India compared to family firms globally," said Dr. Nupur Pavan Bang, Associate Director, Thomas Schmidheiny Centre for Family Enterprise.

According to the report family businesses used three core strategies to address the immediate impact of Covid-19, to respond to the challenges and opportunities it presented, and accelerate the involvement of family members to prepare the plan for the future:

They took steps to address the impact of the pandemic not only on their family and business, but on the welfare of society as a whole, and the needs of all their stakeholders including employees, customers, suppliers and local communities.

Family businesses were found to be 42 percent more likely to implement business transformation strategies when compared to non-family businesses during the pandemic. Family businesses with multiple generations in the firm were 45 percent more likely to implement a business transformation strategy when compared to single-generation family firms.

Family businesses are focused on protecting their succession plans and long-term future for the next generation. This long-term mindset has enabled them to leverage their patient capital to understand the full impact of Covid-19 on their business and others in their industry. They have a view for adopting plans for the long term, rather than just mitigating the short-term impact of the pandemic, says the report.

Family businesses constitute the earliest and most common business model in the world and range from local, small businesses to some of the world's biggest companies like Wal-Mart and Heineken. Due to this range, different kinds of family businesses chose to deploy the three strategies at different times and in different ways.

Further, the report identifies two key factors that influenced families' strategy decisions: whether the business is led by a family or non-family CEO, and whether the ownership is distributed amongst a small or large number of family members.

Businesses led by a family-CEO and with high family involvement were more likely to adopt a social responsibility strategy as one of their choices to focus on the welfare of employees and the communities where the family lives and operates. In the cases where a family business is led by a non-family executive or with lower family involvement, there was a higher likelihood that the business leader made difficult decisions to soften the impact on the business such as reducing employee numbers, general cost cutting and potential restructuring.

The report affirms that now is the time to commit to the future and use the competitive advantages of purpose, community and patience as guideposts for all family businesses to make a long-term comeback and lead the global economic recovery.

Successful Transgenerational Entrepreneurship Practices (STEP) Project Global Consortium is a global applied research initiative that explores family and business practices within business families and generates solutions that have immediate application for family business leaders.