Ready for a crisis? How supervisory boards affect the formalized crisis procedures of small and medium-sized family firms in Germany

Overcoming a crisis situation in which the socioemotional wealth (SEW) of a family is at risk can be threatened by a lack of formal crisis procedures, which can increase the probability of organizational decline. Thus, not being prepared for a crisis situation may be a critical factor in the long-term survival of family firms. From a corporate governance perspective, supervisory boards may achieve higher levels of crisis readiness. Applying the resourced-based view and SEW theory, we analyze the relationship between family ownership and formalized crisis procedures in 150 small and medium-sized German firms. Our results show that formalized crisis procedures decrease as family ownership increases. Including supervisory boards in our analysis, we find a significant moderating effect of supervisory boards on the relationship between family ownership and formalized crisis procedures. Specifically, our results suggest that family firms with supervisory boards show similar levels of formalized crisis procedures as non-family firms with supervisory boards. In contrast, family firms without supervisory boards exhibit lower levels of formalized crisis procedures compared with non-family firms without supervisory boards. We also discuss managerial implications, limitations, and future research.

The Extensive (but Fragile) Authority of the WTO Appellate Body

The authority of an international court (IC) is not necessarily evolutionary and its development unidirectional. This article addresses the authority of the Appellate Body (AB) of the World Trade Organization (WTO) and shows how it rapidly and almost immediately became extensive, but has since exhibited signs of becoming more fragile. The article applies a typology of IC authority developed by Alter, Helfer and Madsen (2014) and explains the transformation from narrow authority (a dispute resolution venue under the GATT based on political negotiations) to extensive authority (a judicialized WTO dispute settlement system with a sophisticated case law) and presents empirical indicators of the rise of the AB’s authority. Such rapid development of extensive authority is arguably a unique case in international politics at the multilateral level. That authority nonetheless remains fragile, and shows signs that it could decline significantly for reasons we explain.