Successfully dealing with risk has become a major challenge for firms to stay competitive in the long run. The tourism industry is vulnerable to any crisis and therefore has to deal with a high degree of uncertainty including many risks. The Alpine tourism industry is shaped by small and medium-structured family businesses. Such firms have more informal decision-making processes and more generations involved, while risk taking depends on the decisions of an owner-manager. Understanding the risk perception owner-managers is thus a complex task. This study conducts n=12 qualitative interviews with senior and junior owner-managers of family SME in tourism. Understanding the risk perception for tourism family SME might therefore contribute to build resilience and long-term competitiveness.
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Tourism heavily shapes community-type destinations of the Alpine mountain regions (Glowka & Zehrer, 2019; Zehrer & Hallmann, 2015). In these communities, small and medium-structured family enterprises (family SME), play a central role by providing employment and contributing to the economic development of the region (Pechlaner et al., 2014). In such businesses, the family is heavily involved in daily business operations and often led by an owner-manager who shapes the vision and goals of the business (Chua, Chrisman, & Sharma, 1999; Feltham, Feltham, & Barnett, 2005). Regarding risk management, the risk behaviour of the owner-manager typically forms the basis for management decisions and, thus, the amount of risk taken by the business (Glowka, Kallmünzer, & Zehrer, 2020). Since the family SME is more informally structured, the individual risk perception of the owner-manager plays a central role in the assessment of risks (Rohrmann, 2008), which influences the business performance (Child, 1972; Das & Teng, 2001).
In addition, the requirements of a family business and its family members as well as their risk attitude and family orientation change with the participation of new generations (Molly, Laveren, & Jorissen, 2012). Typically, various generations participate in the family SME (Gersick, 1997), which complicates the risk management process of family SME even more. It might appear obvious that the senior and the junior generation have a divergent risk behaviour due to the generational differences (Hiebl, 2012). Casillas, Moreno, and Barbero (2011) find that more than one generation in the business increases risk-taking. On the other hand, Hall, Melin, and Nordqvist (2001) propose that the junior generation is more risk averse than the founding generation (Cassia, Massis, & Pizzurno, 2012; Hall et al., 2001). Falkner and Hiebl (2015) stress that future research should relate risk behaviour in family businesses to generational succession.
Following the call for more evidence on generational effects in family business research (Falkner & Hiebl, 2015; Muñoz-Bullon, Sanchez-Bueno, & Suárez-González, 2018; Nordqvist, Sharma, & Chirico, 2014), this study examines the risk perceptions of different generations. We therefore investigate the following research question: Which risks do senior and junior generations in tourism family SME perceive, and, are there any differences in their perception? We conduct n=12 qualitative, semi-structured interviews, with the senior and junior generations from touristic family SME in the Alpine tourism regions of the Tirol, Austria. Six interviews are conducted with senior owners, while the other six interviews are conducted with the successors of the same family SME that are already involved in daily management, which allows a comprehensive analysis on the risk perception in the owner family.
We choose the tourism industry for conducting this research due to two reasons. First, the tourism industry is vulnerable to any kind of economic crisis – not only the Covid-19 pandemic – which spill over into tourism, and therefore has to deal with a high degree of uncertainty (Ritchie, 2004, 2009). Secondly, Alpine tourism destinations are shaped by family SME, which all face similar risks they have to manage (Kallmuenzer, Nikolakis, Peters, & Zanon, 2018). For example, the competitive market pressure on investments and marketing performance as well as staff shortage are identified as main risks by almost all family SME in this sector (Glowka & Zehrer, 2019).
In the following, the different risk perceptions are structured into different areas of tasks, namely financing and investment management, marketing management, human resources management, cost management, eco-management and succession risks. The results show that both generations similarly perceive risks in the business areas of financing and investment management and human resources management. The junior generation does not perceive many risks in the field of marketing, whereas the senior generation does. Regarding the corporate sector of ecological management, only discussions with the senior generations take place. Cost management, as well as risks on the level of the entrepreneurial family are not perceived strongly by both generations.