Risk management during the COVID-19 crisis: insights from an exploratory case study of medium-sized family businesses

FBs represent one of the oldest types of organizations and form the backbone of economies worldwide (Botero et al., 2015; Jocic et al., 2023). The high prevalence of FBs is particularly evident in Europe—depending on the definition and country chosen, between 55 and 90 percent of all firms are FBs (KPMG International Cooperative, 2018). Although the company size of European FBs ranges from one person to large international companies (European Commission, 2009), the majority can be categorized as small and medium-sized enterprises (SMEs) (IFB Research Foundation, 2019). In Austria, the FB share ranges from 50 to 87 percent of all companies, employing between 63 and 67 percent of all employees (Gavac et al., 2020), which emphasizes the predominance of this company type in the Austrian corporate landscape. Given the challenge of defining FBs (Handler, 1989; Steiger et al., 2015), our study refers to the broad definition given by Chua et al. (1999, p. 25), who define a FB as “a business governed and/or managed with the intention to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families.”

To explain the characteristics of FBs, we draw on stewardship theory (Davis et al., 1997), which reflects the unique culture of FBs (Eddleston, 2008; Zahra et al., 2008). According to stewardship theory, the actions of the so-called stewards (e.g., family owners) primarily focus on non-financial or intrinsic motives (Zahra, 2003), which determine stakeholder relationships (van Puyvelde et al., 2012). Furthermore, stewards act in the collective interest of the firm (Davis et al., 2010). Stewardship theory includes three forms of expression: stewardship over continuity, stewardship over employees, and stewardship over customers (Miller et al., 2008). Stewardship over continuity implies that continuity has a high priority for the owners of the FB and that non-financial goals, such as image and reputation, are attributed a high significance (Le Breton-Miller & Miller, 2009). Continuity is expressed in the longevity of the FB or transgenerational survivability as the overriding goal (Le Breton-Miller & Miller, 2006, Miller et al., 2008; Zellweger et al., 2013). Consequently, owners have strong socio-emotional ties to the FB (Gómez-Mejía et al., 2007), which should be preserved for future generations (Zahra, 2003). The identification of family members with the FB, the sense of kinship ties, and personal and social fulfillment contribute to a careful responsibility for the welfare and continuity of the FB (Arregle et al., 2007; Miller et al., 2008). A culture of family commitment to FBs also helps to establish a solid organizational identity (Zahra et al., 2008). Stewardship over employees refers to responsibility towards employees and includes, for example, their further development and motivation. Creating a flexible working environment (e.g., home office options) and an inclusive culture also contribute to employee satisfaction (Eddleston et al., 2012; Miller et al., 2008). As a result, employees have close, trustful, and familiar relationships with the owners, which are intended to ensure the long-term continuity of the FB (Le Breton-Miller & Miller, 2006; Miller & Le Breton-Miller, 2005). Stewardship over customers is based on close, lasting ties with customers and other stakeholders (e.g., suppliers or banks) (Arregle et al., 2007; Sirmon & Hitt, 2003). Personal relationships between family members, employees, and other stakeholders optimize mutual understanding and increase loyalty (Miller et al., 2008). This interpersonal behavior contributes to the long-term survival of FBs (Miller & Le Breton-Miller, 2005).

When operating in an environment that is uncertain and characterized by risks, employees who act as stewards are more likely to be open to innovation, take calculated risks, and explore new strategic options without concerns for the potential negative consequences on their employment or professional standing within the company (Zahra et al., 2008). Hence, in such situations, of which the COVID-19 crisis is a pertinent example, the stewardship culture of FBs reflected in commitment, trust, and loyalty may have a positive impact on strategic flexibility, i.e., the ability to actively seek out novel opportunities and effectively respond to potential threats within the competitive environment. Since a culture of trust spurs resilience (Cheese, 2016), and FBs are characterized by such a culture (Miller & Le Breton-Miller, 2005), they should exhibit high levels of resilience (Amann & Jaussaud, 2012; Amore et al., 2022; Czakon et al., 2023; Salvato et al., 2020).

RM encompasses the identification and implementation of procedures and methods to handle unforeseen favorable or unfavorable events inherent to an organization’s activities, intending to attain specific objectives and protect its assets (Ferreira de Araújo Lima et al., 2020; Hollman & Mohammad-Zadeh, 1984; Verbano & Venturini, 2013). Its primary focus is achieving the company’s goals and ensuring its existence and continuity (Verbano & Venturini, 2013). Therefore, RM is a decisive factor for the company’s survivability (Falkner & Hiebl, 2015; Ferreira de Araújo Lima et al., 2020). This aspect seems particularly important for FBs, as the corporate family attaches high importance to transgenerational survival and, thus, stewardship over continuity (Miller et al., 2008; Zellweger et al., 2013). In general, RM refers to the process that includes the identification of relevant risks as a first step and is followed by the analysis and assessment of the identified risks. The third step involves RM using risk strategies, based on which the risks are monitored in the last step (Gao et al., 2013; Marcelino-Sádaba et al., 2014).

Scholars and institutions distinguish between formal and informal (RM) methods, which differ in structure and documentation (e.g., COSO, 2017; Daft & Macintosh, 1984; Gao et al., 2013). Formal controls, such as formal RM instruments (Soin & Collier, 2013), are characterized primarily by a systematic and explicit approach comprising rules, procedures, and structures. These are designed to help managers ensure that their organizational strategies and plans are implemented effectively and thus involve monitoring, measuring, and counter-measures in case of deviations (Daft & Macintosh, 1984; Langfield-Smith, 1997). Formal RM often follows a clear plan of procedure. The steps that are carried out are clear, distinct, built on each other, and subsequently documented in written form (e.g., in a handbook). In general, management accounting instruments are often assigned to formal RM (Gao et al., 2013). Informal RM is not a systematic but rather an intuitive approach to managing risks. Instead of documented procedures and plans, informal RM relies on the experience and judgment of individuals to identify and address risks (Gao et al., 2013; Mitter et al., 2022a). Culture shapes RM and is crucial in achieving successful RM (COSO, 2017). Ethical values, beliefs, and traditions guide behavior (Norris & O’Dwyer, 2004), entail fostering a risk awareness culture (Braumann, 2018), and reflect informal RM (Braumann et al., 2020).

Pearson and Clair (1998, p. 60) define an organizational crisis as “a low probability, high-impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution”. Characteristics of crises include uncertainty, time pressure, rapid decision-making, threat, and risk. Crises often impact key stakeholders (e.g., employees or suppliers) (James et al., 2011) and include, for instance, a deterioration of reputation, liquidity problems, or a threat to survival. As external crises occur infrequently, organizations are rarely prepared for them and/or may never have faced a crisis of this magnitude before (James & Wooten, 2005). The COVID-19 crisis is described not only as a drastic global health crisis but also as a global economic crisis (McKee & Stuckler, 2020). The ability to adapt to the new circumstances created by the COVID-19 crisis, and therefore also resilience, are crucial to the success of companies (Firfiray & Gómez-Mejía, 2021; Salvato et al., 2020).

Given that crises are, to some extent, unexpected and sudden events (James et al., 2011), particular importance should be attributed to RM due to its proactive nature (Ferreira de Araújo Lima et al., 2020). RM should identify crises before they occur so that measures can be derived early and contribute to crisis preparedness (Somers, 2009). Consequently, using RM methods can enable better adaptability and flexibility during times of high uncertainty (Dahms, 2010; Settembre-Blundo et al., 2021). This way, RM contributes to firm resilience, resulting in a competitive edge by enabling a more adaptable and flexible organization (Armeanu et al., 2017; Dahms, 2010; Duchek, 2020).

Although growing in recent years, the extant literature on RM in FBs is still scarce (Hiebl et al., 2019; Mitter et al., 2022b). Thus, we sometimes draw on research on RM in SMEs. Concerning RM, small and medium-sized FBs and/or SMEs are confronted with different risks (Falkner & Hiebl, 2015; Henschel, 2006; Mitter et al., 2022b) and accordingly exhibit a high degree of vulnerability (Firfiray & Gómez-Mejía, 2021). They tend to have a small customer and supplier base, which can lead to strong interdependencies (Mitter et al., 2022b). In addition, limited human capital and knowledge can lead to further risks. The loss of important and experienced employees is particularly risky (Gilmore et al., 2004).

Although FBs face various risks that pose a threat to their long-term existence, they mainly follow a limited identification of risks and a passive, reactive approach to risks (Brustbauer, 2016). Moreover, RM is adopted to a lesser extent in FBs (Faghfouri et al., 2015; Hiebl et al., 2019). However, the formalization of RM or management accounting depends on the company size (Feldbauer-Durstmüller et al., 2012; Giovannoni et al., 2012; Hiebl et al., 2019). Smaller FBs often do not have the necessary resources or hardly recognize the benefits of formal RM (Mitter et al., 2022a, b). This is similar to SMEs, whose RM is also found to be rudimentary (Verbano & Venturini, 2013) or less sophisticated (Britzelmaier et al., 2015; Crovini, 2019; Henschel, 2006). RM is often still considered a “spot” project within SMEs (Crovini et al., 2021a). As companies grow in size, the use of risk analysis and quantitative methods also increases (Crovini et al., 2021b; Hoyt & Liebenberg, 2011), and RM becomes more sophisticated (Paape & Speklé, 2012).

To close the company size-related gap in RM, previous scholars (Britzelmaier et al., 2015; Henschel, 2006; Verbano & Venturini, 2013) have advocated for the implementation of international standards and formalized procedures, such as the COSO framework for SMEs. Such a framework provides a clear structure for the identification, analysis/assessment, management, and monitoring of risks. By applying the COSO framework, companies are able to make better decisions as they develop a greater understanding of their risks and opportunities. This supports a more long-term and strategic approach, which strengthens the potential for overcoming crises (COSO, 2017). As SMEs are often FBs (IFB Research Foundation, 2019), this may also apply to FBs.

However, such approaches neglect the unique characteristics of companies and the limitations that arise from applying practices initially designed for larger and more established firms (Crovini et al., 2021b). Indeed, RM is strongly influenced by corporate characteristics and culture (Falkner & Hiebl, 2015). FBs are characterized by a unique stewardship culture that also impacts RM, particularly in smaller FBs (Mitter et al., 2022a). In smaller companies, the owner often carries out RM (Henschel, 2006; Henschel & Durst, 2016; Watt, 2007). This is also applicable to FBs, where risks are primarily managed through the personal intuition of the owner-manager (Mitter et al., 2022a), and is explained by the owner-manager's desire to maintain control over the company. The desire to preserve control hinders the implementation of formal tools for enhancing crisis prevention, as doing so would necessitate greater transparency and objective oversight of corporate processes, potentially resulting in a compromise of their privacy and authority (Faghfouri, 2012). Thus, the owner strongly shapes and influences RM in FBs (Mitter et al., 2022a). The relevance of the owner or CEO in setting the stage for RM and creating risk awareness is captured in the “tone from the top” concept, an informal control practice that comprises two dimensions: First, the CEO’s top-down commitment to RM by dedicating time, effort, and resources to risk issues and communicating behavioral expectations concerning RM. Second, a bottom-up perspective, whereby the CEO encourages organizational attention to risk and risk-related communication throughout the company (Braumann et al., 2020). Within FBs, the relevance of the “tone from the top” is also reflected in the strong role of the corporate family in specifying the risk approach and RM practices. Potential risks are primarily addressed within the corporate family, often occurring outside regular working hours, highlighting the significance of ensuring the ongoing existence of the FB (as a manifestation of stewardship over continuity) (Mitter et al., 2022a). Moreover, long relationships with employees (as a manifestation of stewardship over employees) imply a risk mitigation strategy by counteracting risks such as the shortage of skilled workers or staff turnover. In addition, the personal and trusting relationship should facilitate the assessment of risks (Mitter et al., 2022a, b). Likewise, close ties with customers and other stakeholders (as a manifestation of stewardship over customers) help FBs identify and manage risks (Mitter et al., 2022a, b). Hence, these examples demonstrate that FBs strive for a holistic approach in RM endeavors that integrate the family’s, employees’, and customers’ perspectives as a reflection of their stewardship culture.

The above mentioned RM methods are rooted in stewardship culture and serve as social controls. Social controls include mechanisms and strategies designed to achieve a high degree of congruence on norms and values (Brenner & Ambos, 2013) and are, therefore, informal in nature. Informality, however, does not lead to a reduction in the effectiveness and efficiency of companies, nor does it pose a threat to the continued existence of companies (Speckbacher & Wentges, 2012). This indicates that informal controls should not be considered irrelevant to the exercise of RM in FBs. Furthermore—as already stated—informal RM enables a holistic perspective (Moschella et al., 2023) and adds to risk awareness (Braumann et al., 2020). A risk awareness culture is generally promoted by open communication between the management and employees, creating an environment of trust and openness towards discussing risks. By analyzing and discussing key figures, for example, in face-to-face meetings between top management and employees, employees can be motivated to consistently address risk-related issues, resulting in increased risk awareness (Braumann et al., 2020). Employees should become an integral part of the RM process, perceive risks, and communicate them to the manager (Domańska-Szaruga, 2020). Accordingly, involving trusted employees in RM can strengthen RM approaches and risk awareness of FBs. Strong risk awareness enables businesses to leverage their understanding of the major risks and adapt proactively to changing environmental conditions (Banks, 2012), which enhances resilience (Morsut et al., 2022).

Although the literature review underlines the predominance of informal RM methods in (smaller) FBs, the neglect of formal RM methods is also associated with drawbacks. Even though informal controls are characterized by a high degree of flexibility and allow managers to decide more “situationally” (Kreutzer et al., 2016), they lack clear guidance and structure, which can have serious consequences (Chenhall & Morris, 1995; Davila et al., 2009; Henri, 2006). Relying strongly on social controls can increase the risk of groupthink and isomorphism, which might lead to less openness or collective blindness (Villena et al., 2011). Therefore, the predominance of informal controls can impair adaptability to new contexts (Kreutzer et al., 2016). This narrow-mindedness (Adler & Kwon, 2002) seems to have been particularly problematic during the COVID-19 crisis, as government restrictions (e.g., lockdowns) almost forced many companies to change their business model (Leppäaho & Ritala, 2022). In the context of FBs, social ties with employees as an informal RM method (Mitter et al., 2022b) can lead to an aversion to layoffs (Block, 2010), causing inflexible cost structures. Close relationships with stakeholders may also lead to trust-based rather than rational decisions, increasing the risk of bad debts (Mitter et al., 2022c). Formal RM might be essential for safeguarding against these threats. It allows FBs to identify potential risks early, such as excessive dividends, rigid cost structures, or deteriorating customer creditworthiness, and take timely countermeasures (Mitter et al., 2022b). However, the predominant use of formal RM also comes with disadvantages. Although formal controls provide companies with clear guidance (Ouchi & Maguire, 1975) and structure (Chenhall & Morris, 1995), they also entail rigidity and inflexibility (Burgelman, 1983).

A complementary use of formal and informal controls provides opportunities to reduce the constraints inherent in depending on only one form of control (Kreutzer et al., 2016). Recent literature (see Ströbele & Wentges, 2018 for a review) emphasizes higher performance in terms of returns on investment and sales growth by integrating formal and informal control, particularly in organizations with higher levels of social capital,¹ such as FBs (Pearson et al., 2008). Especially during times of crisis, this combination should unfold its advantages, as decisions must be made quickly due to volatility (in favor of informal controls). At the same time, clear guidance and explicit procedures are needed to navigate the company through the crisis in a structured manner (in favor of formal controls). Whether and how external forces affect management controls remains largely unexplored (Kapiyangoda & Gooneratne, 2021). Taking the external shock of the COVID-19 crisis as an example, we aim to investigate the impact of this crisis on RM methods in an exploratory, qualitative study.

All investigated medium-sized FBs are 100% owned by the corporate family. Therefore, disagreements with non-family shareholders are avoided, and a stable structure of FBs (as a manifestation of stewardship over continuity) is secured. In all FBs, the ultimate responsibility and decision for RM are clearly defined and lie with the corporate family. Establishing clear responsibilities for RM requires a certain degree of formalization and documentation, which reflects formal RM. However, risks are not only discussed among in-company family members; external family members (e.g., children of the owner-managers) are also included in RM by discussing risks privately outside the FB (e.g., during meals). This might be attributed to the principle of stewardship over continuity. The long-term existence should be ensured through the involvement of family members, even those outside the firm. This illustrates the central role of the corporate family, both internal and external to the company, in the RM of FB. This appears to be informal and subtle, reflecting informal RM in FBs.

However, not only does general risk awareness contribute to FBs’ resilience, but close stakeholder relationships also help FBs to manage risks. All owners of the FBs describe their relationship with employees (as a manifestation of stewardship over employees) as close, friendly, open, and partly familiar. However, there is a difference between long-tenured employees and those who have only recently joined the company, with the former showing more loyalty (e.g., lower fluctuation). As a reflection of the responsibility felt for their employees, all nine medium-sized FBs offer further education or training programs. This serves as an informal social control, where employee turnover is mitigated through initiatives such as offering opportunities to attend courses from the Austrian Chambers of Commerce, enabling them to advance within the FB. Although stewardship over employees implies the risk that employees might exploit this personal relationship with the owner for their own benefit and thus harm the FB, the companies investigated demonstrate mutually beneficial relationships and a high degree of reciprocity.

Other formal RM methods, which complement the informal methods, are derived from traditional management accounting and help to identify, analyze/assess, manage, and monitor risks (as a manifestation of stewardship over continuity). For example, liquidity, sales, and investment plans or SWOT analyses are prepared regularly or as required, thus enabling potential risks to be identified at an early stage in most FBs (construction industry 1, 2, and 3, food industry 2, 3, and 4, and wood industry). Furthermore, key performance indicator analyses and deviation analyses are carried out in some FBs (construction industry 1, and food industry 2, and 4) to identify negative trends quickly and to be able to develop counter-measures. For risk analysis/assessment, the FB of the food industry 4 uses formal risk matrices, which are evaluated based on the probability of occurrence and the degree of risk exposure. For RM, the FBs mentioned above (construction industry 1, 2, and 3, food industry 2, 3, and 4, and wood industry) again refer—in addition to the social controls that counteract risks—to planning and deviation analyses of selected key performance indicators. To monitor risks, deviation analyses are used as well. These examples illustrate that medium-sized FBs have formalized RM structures, even if they are only traditional management accounting instruments. However, in general, the scale of the project or effort is influential regarding whether risks are dealt with formally or informally. The owner of the food industry 3 explains: “Depending on the scale of the business, you invest more effort or less effort.” However, with the increasing size of a project, more emphasis is placed on formalized RM structures, as the owner of the construction industry 2 explains: “With larger projects, there is more money involved than with smaller ones. Such projects are also combined with higher risk. We think about realizing such projects quite long and we also focus more on planning.”

The family’s responsibility for FBs’ risk strategy becomes particularly evident during the COVID-19 crisis. A major topic the corporate family is concerned about and discusses privately is the FB’s survival during the COVID-19 crisis, as the following quote exemplifies: “Sales have fallen by 60%, but costs are still 100%, and suddenly you get into a situation where you ask yourself (…) can we survive this or not?” (food industry 2). Moreover, the corporate family always decided on strategic measures (e.g., closing unprofitable branches or reducing opening hours) to ensure the company’s survival during the COVID-19 crisis (as a manifestation of stewardship over continuity). In this context, the corporate family's communication of risk mitigation measures to employees is particularly important, as the following quote exemplifies: “If there are very important things like (...) opening hours. We have closed certain branches in the afternoon. We know that in two weeks we will open the branch again on afternoons, and then the employees will be informed as soon as we decide” (food industry 2). The clear specification of risk mitigation measures by the corporate family also helps to ensure that they are perceived as role models by the employees. The owner of the food industry 4 explains: “My brother and I walk around in masks all the time because (…) as a manager you also have a certain role model function for the employees. We have a mask obligation and if we don't keep to it, our employees won't do so either.” The role of family members as role models is primarily rooted in informal social dynamics and lacks fixed structures or rules, making it an informal RM method.

Although the ultimate responsibility for RM always lies with the corporate family, RM accountability is extended to non-family department heads to allow the broadest possible view on RM to better handle the COVID-19 crisis. The interviewee of the food industry 2 explains: “First of all, we discuss risks internally, where we don't have that many decision-makers and people involved. But we have an organization where we ultimately have specialists in each department for the respective area, and this is simply discussed relatively quickly in a larger circle. The participation of the department heads in the joint brainstorming, the joint derivation of measures naturally also strengthens the entire management group in the company”. The extension of RM responsibility implies formality and documentation (e.g., adaptation of the task description). Hence, the crisis context spurs formalization. Involving employees and discussing potential risks with them helps not only to identify potential risks but also to manage them: “If someone notices that an order is very urgent in terms of time, then there are often several employees who offer that they could take over the work and so employees always help each other” (construction industry 2). Brainstorming with employees requires neither a clear structure nor documentation, and, therefore, has an informal character.

Regardless of whether FBs generally describe themselves as risk-averse or risk-taking, most of them exhibit a decrease in risk-taking during the COVID-19 crisis. For example, investments are hardly made due to the uncertainty that accompanies the crisis. The transgenerational focus as a manifestation of stewardship over continuity may explain this risk aversion during crises. Security, often a top priority for investments, has sharply declined since the crisis outbreak, as stated by the owner of the second-generation managed food industry 1: “I think in the last six weeks we have seen that there is no security”. However, one FB, already in the fourth generation (food industry 2), also made more than twice as many investments in 2020 than in 2019 due to the COVID-19 crisis. In this case, stewardship over continuity contributes to increased risk-taking during times of crisis in that the FB has modernized the production facility. Moreover, due to the financial grants for investments given by the Austrian government at the beginning of the COVID-19 crisis, this FB seized the opportunity to make risky investments that otherwise would not have taken place or would have cost more: “We took advantage of this opportunity and invested; (…) bringing forward investments that we might not have made otherwise” (food industry 2). However, just as before the COVID-19 crisis, the thought of future generations is always prevalent when investing, and risk awareness seems to be further strengthened by the COVID-19 crisis. Furthermore, as a manifestation of stewardship over continuity, all available resources of the corporate family are utilized to stabilize the business model in some FBs (automotive industry and food industry 2), enhancing resilience during the crisis. The owner of the automotive industry explains: “My mother, who has already retired, helped out in the company recently and took over the reception and all the phone calls. Now that so many employees have a COVID-19 infection or have to look after their children at home, I am glad that she has helped me here.”

Not only does the COVID-19 crisis strengthen the relationship with employees, but the intimate and reciprocal relationship with external stakeholders is also reinforced by the COVID-19 crisis. Similar to employees, customers also display loyalty to FBs during times of crisis, especially in the construction industry 2 and food industry 2. For example, customers have shown support by placing additional orders with FBs. Therefore, the unique relationship with customers serves as an informal social control during the COVID-19 crisis to counteract risks such as counterparty default and thus secure the long-term survival of FBs.

Despite the effectiveness of social controls and, thus, informal RM, FBs aim to create a better basis for decision-making due to the uncertainty accompanying the COVID-19 crisis. As a result of the endangered continuity of the FBs (stewardship over continuity), formal RM is becoming more important in most FBs (construction industry 1, 2, and 3, food industry 2, 3, and 4, and wood industry) and is also reflected in the degree of formalization of the RM tools used. During the COVID-19 crisis, the FB of the food industry 2 has established its own management accounting department and has employed a professional management accountant. Especially during times of crisis, rethinking and redesigning existing systems by experts becomes particularly important. The owner of food industry 2 explains: “It is important, especially in such times, that you (…) can still grow over the next few years. And with management accounting, you can plan better and more professionally.” In this FB, management accounting takes on a supporting role for RM and ensures that RM is more present, especially during times of crisis: “Management accounting makes risk management more aware at our company, which is definitely necessary in the crisis. You have a management accountant who always reminds you, for example, why we have a bus standing around that nobody is driving because increasing motor vehicle costs is a risk.” (food industry 2). Before the COVID-19 crisis, most medium-sized FBs considered formal RM instruments for investments in high-risk projects as secondary. Instead, investment decisions were made based on personal intuitions and judgments. However, the COVID-19 crisis has heightened risk awareness and, consequently, emphasized the importance of formal RM.

In addition, the existing formal RM systems, already in use before the COVID-19 crisis, are more intensively applied in most FBs (construction industry 1, 2, and 3, food industry 2, 3, and 4, and wood industry). As the dynamics of the environment during times of crisis increase, the timely identification of potential risks becomes more important. Therefore, planning and deviation analyses were intensified as a result of the COVID-19 crisis, as the owner of food industry 4 explains: “Especially now in this situation, we are taking a closer look at the planning or analyses and carefully analyzing every deviation, that we might have overlooked before the crisis. Right now, this is more important than ever, as many companies have already had to close in this short period of time.” Intensifying these planning or deviation analyses and identifying risks at an early stage indirectly contributes to the long-term survival (as a manifestation of stewardship over continuity) of the FBs. The FB of the food industry 4 also introduced scenario analyses for investments during the COVID-19 crisis, which are used to analyze and assess risks using best- and worst-case scenarios. If the worst-case scenario endangers the survival of the company, the FB refrains from the investment. The owner of this FB explains the value of the scenario analysis during the crisis: “You shouldn’t invest in something without a plan, because if it doesn’t succeed, the company will fail.” Risks are reported in the management report in all investigated FBs, but it becomes apparent during the COVID-19 crisis that significant risks (e.g., shortage of skilled workers during the COVID-19 crisis) and their management are described in more detail. Therefore, informal RM reaches its limits in the uncertain environments of the COVID-19 crisis, and the endangered stewardship over continuity contributes to FBs’ efforts to complement informal methods with formal instruments.