Family SMEs in Poland and Their Strategies: The Multi-Criteria Analysis in Varied Socio-Economic Circumstances of Their Development in Context of Industry 4.0

Abstract

The growing importance of family businesses in the global economy is related to the specificity of their activities, the increase in their contribution to GDP creation or providing jobs. It prompted the authors of this article to research these particular entities belonging to the small business. Considering the different economic conditions caused by the crisis of the COVID-19 pandemic, the aim of the work was to examine and identify the strategies implemented among family enterprises from the SME sector in Poland in the period immediately preceding the COVID-19 pandemic (2018–2019) and during this pandemic (2020–2021). It was achieved through analyzing the literature of the subject, development of our own research method, analyzing the results of primary research, presenting conclusions and making recommendations for science and economic practices. The authors formulated research hypotheses verified within the framework of the conducted research. The research is of a pioneering nature and was designed in such a way as to present the similarities and differences between the classes of enterprises under study (micro, small and medium-sized), as well as the research periods in terms of the development strategies applied by them. In this respect, appropriate research methods were selected. The study combined qualitative methods (critical analysis of existing explanations of the concept and essence of family enterprises; review of the literature on enterprise development in the light of Industry 4.0) with quantitative methods (analysis of the taxonomy of structures based on the similarity index of the studied structures; comparative analysis by cross-tabulation). To perform the research thus planned, the authors’ study on the systematization of development strategies in family enterprises was adopted. Implementing strategies among family enterprises in the SME sector seems to be crucial in their development. As the results show, this is of particular importance in crisis periods. The pandemic crisis was particular, and the functioning of enterprises during it was problematic. Some of them had to suspend their activities, some ceased their operations altogether, and those that survived were successful. The path leading to this success was the specific development strategies that were implemented by the family businesses in the SME sector surveyed. It is therefore worthwhile, both from an academic point of view and from a business practice point of view, to learn about these strategies. The authors have identified and described them and presented the resulting conclusions for the future.

1. Introduction

The modern economy is characterized by the volatility of socio-economic phenomena and their high dynamics. Because of these changes, crises are recorded from time to time, the source of which is not uniform. The most recent crisis caused by the SARS-CoV-2 virus, had serious repercussions for the entire global economy, affecting entire societies, large corporations, as well as small businesses, including family businesses. The analysis of the changes that occurred in the activities of enterprises at that time, as well as their response to the crisis and the development strategies applied, should constitute an important element in the development of scientific research and the expansion of knowledge in strategic management.

In the Polish economy, a special role is played by enterprises of the SME sector, which have a decisive share in the total number of enterprises, in job creation and in GDP. Among SMEs, a special place is occupied by family enterprises, whose development planning has a long-term character based on values and family culture.

The phenomenon of the growing importance of family businesses in the development of the global and national economies is of interest to many academics, investors and business practitioners today [1,2,3,4,5]. In a global economy characterized by volatility, a focus on long-term growth, flexibility, a focus on the quality of products and services, the importance and value of the brand, enduring customer relationships and attention to employees provide competitive advantages for family firms.

The main research problem of this study is the lack of adequate knowledge on the strategies undertaken by family businesses in the SME sector in Poland during periods of varying socio-economic conditions [6]. When we undertake research on family businesses within the economic sciences, we discover a lack of coherent theory to describe their functioning and the logic of development. The classical and neoclassical approaches reduce theories of the enterprise to the issue of maximizing their profit. Other perspectives, such as managerial, behavioral, neo-institutional or strategic reject the concept of the profit-optimizing enterprise, judging it as inadequate in relation to economic reality [7]. Research on the evolutionary theory of the enterprise or confirmation theory, which emphasizes the subjectivity of the human being in economic activity, can serve as an alternative to the above. The term ‘conenterprise’ is a combination of the ‘consumer’ and ‘enterprise’. It denotes an enterprise that has multiple confirmations, i.e., strong links with consumers (confirmations imply ontological acceptance of enterprises in the economy by consumers). According to confirmation theory, consumers become part of the enterprise and at the same time its ‘boss’ (symbolic or actual) [8].

However, such an approach often cannot capture the complexity of business practices. Therefore, it is worth extending the knowledge of family businesses to include the perspective of management sciences. These disciplines use, among others, inductive reasoning and descriptions of specific entities or groups of entities [7]. The issue of family businesses is interdisciplinary in nature as such entitles are not homogeneous. They operate in different areas of the economy, represent different size classes, have different ownership forms and management systems. Investigating the phenomenon of the family enterprise requires reaching not only for the economic sciences, but also for management sciences and some social sciences.

The subject of this study is the strategies pursued in the SME sector in two differentiated periods in terms of socio-economic conditions: in the time immediately preceding the COVID-19 pandemic (2018–2019) and during it (2020–2021). The given study will contribute to filling a gap in the existing research on the development strategies of family SMEs. The choice of the study subject is justified by the following reasons:

• The growing importance of family enterprises in the global economy, the increased interest in them, the need to know the development mechanisms of such enterprises;
• The recognition of SME enterprises as an important factor in socio-economic growth in many countries of the world, including the EU. The study undertaken is therefore justified in the context of empirical science;
• The well-established role of business development strategy in strategic management theory, new concepts and models in response to dynamic civilizational change;
• The ongoing technological and organizational transformation of businesses. This includes the digitalization of products and services, machine-to-device-to-human communication, personalization of products and services (cf. Industry 4.0).

The aim of this work was to examine and identify strategies implemented among family enterprises from the SME sector in the period immediately preceding the COVID-19 pandemic (2018–2019) and during this pandemic (2020–2021). The realization of the main research aim made it possible to:

• Clarify the essence and the specificity of family businesses;
• Show the changes in the development processes of family businesses in the context of Industry 4.0 on the basis of literature research (secondary, qualitative research);
• Create the methodology of the research carried out;
• Present the results of our own empirical research (primary, quantitative research) related to the implementation of strategies among micro, small and medium-sized family enterprises in various socio-economic conditions (before and during the COVID-19 pandemic);
• Verify the adopted research hypotheses and present conclusions and recommendations, concluding the process of research knowledge.

The authors formulate the following research hypotheses:

Hypothesis 1.

With the change in socio-economic conditions caused by the COVID-19 pandemic, family enterprises in the SME sector, when designing their strategy, more often adopted a pattern of activities that developed over time (emerging strategy), and less often a strategy having the character of planned activities supporting the mission and long-term goals of the company.

Hypothesis 2.

A significant part of family enterprises in the SME sector do not have a classically understood development strategy and do not implement the so-called ‘strategic intention’.

Hypothesis 3.

During the COVID-19 pandemic (2020–2021)—compared to the pre-pandemic period (2018–2019)—the share of family SMEs implementing expansionary strategies decreased, and the share of those with conservative-compressive strategies increased.

Hypothesis 4.

There is a positive relationship between the implementation of development strategies in family enterprises of the SME sector and its innovative activities, which fits into the contemporary trends of industry 4.0.

The achievement of the stated research objectives is performed in three stages:

• Stage 1: Creating the authors’ own research methodology, including qualitative and quantitative research methods.
• Stage 2: Analysis of the literature on the subject, allowing the achievement of theoretical objectives regarding the specificity of the activities of family enterprises, as well as showing changes in the development processes of family enterprises in the context of the conditions of Industry 4.0.
• Stage 3: Description and presentation of research results, verification of research hypotheses, as well as presentation of conclusions and recommendations.

As a result, this scientific study consists of three main parts: cognitive theory, methodology and empirical results.

2. The Theoretical Basis of the Research

2.1. The Family Business—The Essence and Concept

Family businesses are a special group of economic entities that combine business activities with the family sphere [9,10,11]. They are one of the oldest forms of human economic activity. The running of the household and the earning of the family’s livelihood resulted in creating a manufacturing organization that transcended the family [12]. Compared to the family itself, the new structure allowed for a better organization of production, development and nurturing of specific skills in production and management. Such entities are referred to as family businesses. The organizational structure, modus operandi and business models of family enterprises have been changing over the centuries. However, their essence (the coupling of the business sphere and family life) has remained constant [13,14,15]. Today, family businesses remain one of the most popular forms of economic activity. They account for over 65% of all businesses worldwide, including in the USA, Canada and Spain. In Italy and Sweden, the rate exceeds 80% [16,17,18,19]. In Poland it is 45–50% today, showing a clear upward trend [20]. Family-owned businesses now employ approx. 80% of all corporate employees worldwide and produce 40–70% of the GDP of individual countries.

The concept of a family business is intuitively understandable. However, in statistics and scientific publications, such enterprises are often not separated into a particular category (their names do not always reflect the feature of familyhood or the name of the owner). There is no unambiguous definition of a family enterprise in the law of Poland and many other EU countries [10,21]. This results in a lack of proper reporting in CSO and Eurostat statistics. Legal regulations define a family enterprise differently each time, depending on specific context (e.g., in succession rules, getting tax preferences or shop opening hours). In Poland, the concept of family enterprise is often limited to micro companies and the SME sector. A limitation makes it difficult to compare Poland with other Western countries, where family businesses also include large corporations managed by family dynasties. There is also some controversy regarding establishments of sole proprietors whose owners do not employ other people (so-called self-employment).

These are the specific characteristics of family businesses:

• Significant influence of positive values and culture of the organization underpinning the company’s mission and strategy, the synergy between the family and the company [22,23,24,25,26,27];
• Eager long-term investment taking into account the needs of keeping the business in the hands of the next generation [28,29,30];
• Undertaking development strategies that go beyond the goal of making immediate profits, thereby enhancing the stability of the economy [31,32,33,34];
• A prudent and more efficient financial policy compared to other enterprises. Family-owned establishments are generally less indebted (e.g., due to their reluctance to take out loans, as well as difficulties in meeting bank requirements for debt servicing capacity) [35];
• Frequently positioning themselves in market niches, realizing non-standard goods and services [36];
• Easier, compared to non-family businesses, to go through periods of recession thanks to the willingness to make sacrifices to save the business [9,37,38];
• Involvement of employees (including non-family members) in the company’s goals and their emotional attachment to the company [39].

The organizational/legal form and size of a given company is usually not crucial for defining it as a family business. Instead, criteria such as multigenerationality in the management of the company in question (a basic condition for defining a company as a family business in the US) are often used [9,16,40]. A given company is sometimes defined as family-owned on the basis of quantitative criteria such as the family’s financial stake in the company and the number of family members on the management and supervisory boards [41,42].

As of today, there is no universally accepted definition of a family business. Dozens of such definitions can be listed [21,43,44]. According to a synthetic definition reflecting the essential characteristics of it, family business is a “dual market organism, comprising family and business, which functions and develops in a multi-generational perspective” [19,45]. The following definition is also widely accepted: “A family business is one in which two or more family members own at least 51% of the ownership and at least one of them has a managerial role and seeks to maintain it for the next generation” [46]. The European Commission formulated the following definition of family business: “(1) Most of decision-making rights are in the possession of the natural person(s) who established the firm, or in the possession of the natural person(s) who has/have acquired the share capital of the firm, or in the possession of their spouses, parents, child, or children’s direct heirs; (2) The majority of decision-making rights are indirect or direct; (3) At least one representative of the family or kin is formally involved in the governance of the firm (4) Listed companies meet the definition of family enterprise if the person who established or acquired the firm (share capital) or their families or descendants possess 25% of the decision-making rights mandated by their share capital” [47]. This definition includes family businesses that have not yet undergone succession and registered sole proprietorships that may be subject to intergenerational transition.

Today, there is a growing public awareness of the advantages of family business. In Poland, 58–60% of company boards believe that the declaration of the company’s family character is important for contractors; 83–85% of companies emphasize their family character in their articles of association and in their marketing policy [48]. Research conducted in Germany shows that orientation to family is perceived as a more important characteristic in that country than, e.g., being a listed company [49]. Family enterprises are very diverse in terms of size, management systems and organizational and legal forms. However, what they have in common is the combination of family and business [50,51].

2.2. Business Development in Industry 4.0

According to W. Gabrusewicz, the development of an enterprise should be understood as an evolutionary and long-term process of targeted quantitative and qualitative changes. These are changes from simpler forms/states to more complex and differentiated forms/states. Such changes significantly transform the structure of the enterprise and the way it operates. Enterprise development is strongly influenced by the effectiveness of registering the problems occurring in the enterprise and working out ways to solve them [52]. One can therefore speak of a triad of linked concepts: movement–development–progress:

• All movement always involves the functioning and change in an object;
• Development is a type of movement that produces not only quantitative but also appropriately directed qualitative changes in an object;
• If the changes go in the desired direction, one speaks of progressive development. If the changes move away from the desired state, it is to be referred to as regressive development;
• If there is no change at all in the facility, one should speak of stagnation [53].

The concept of development should be understood as a process of change. With regard to an enterprise, it may concern both its parts and its entirety. Development may occur in all areas, concerning the objectives pursued, the structure, technology or the human factor. The term ‘development’ refers to qualitative changes, while the term ‘growth’ refers to quantitative changes. When speaking of ‘organizational development’, one should consider the functioning of an organization from a holistic point of view [54].

The development of modern enterprises is closely linked to Industry 4.0 characterized by the digitalization of production processes, the increasing role of information and cyber-physical systems, and the creation of a networked system linking people, infrastructure, production and service. The digitalization of industry facilitates not only human–machine communication but also machine-to-machine (M2M) communication, both in terms of quantity and speed of information transfer. This means creating a smart industry connecting devices, processes and products in a smart network.

Here are the basic elements of the Fourth Industrial Revolution: industrial Internet of Things (collection of data by current, temperature, pressure and noise sensors and their storage in cloud computing); cyber-physical system (linking the physical world with the virtual world); cloud computing as a technology for storing data in a virtual space accessible from anywhere at any time; big data and 3D printing; new business models, including sharing processes and strategic alliances; online monitoring of the production process throughout the factory (in real time)/smart factories [55,56].

The economic effects of digitalization are achieved through the following factors:

• A new management model based on strong technological/analytical capabilities and flexible organizational structures;
• More accurate and faster market intelligence. The time to market for new products is forecast to shorten by 20–50%, depending on the specific industry and country’s economy;
• Availability of low-cost public cloud services and reduction in barriers to entry;
• Precisely meeting the expectations of individual online customers at every stage of product design and implementation. Developing individual and niche products, creating new business models;
• Designing and manufacturing products so that they can be easily reused (cf. the concept of the circular economy);
• Automating computing work to foster better use of resources, including a 30–50% decrease in machine and equipment downtime [57,58].

The Fourth Industrial Revolution takes place in the post-industrial period of socio-economic development. The latter is a manifestation of digitization and automation; it is characterized by the dominance of the service sector and the preaching of reindustrialization. These processes raise concerns about increased unemployment or other social impacts, which are difficult to predict today. A remedy to the threat of unemployment could be the introduction of robot taxation and a universal basic income [59,60]. Such economic and social processes are also worth studying from the point of view of the adaptation of the management system of enterprises to new conditions resulting from automation and the galloping development of information technology.

2.3. Development Strategies of the Family Business in the SME Sector

Owners of family enterprises are reluctant to make changes to their workforce or significantly restructure their businesses even in times of crisis. The reasons for this lie not only in the close relationship between family business owners and their employees. An important factor in the reluctance to make the above changes is also the conservative development strategy of such companies. There is no particular emphasis on profit and profitability. Instead, the adopted development strategy is characterized by great caution in decisions, concern for human resources and the longevity of one’s own company [26,40].

Most family businesses find it difficult to survive beyond one generation of owners. In this situation, strategic planning can strengthen the family business and extend its lifespan [61,62]. This type of planning in family businesses differs from planning in non-family businesses [63,64]. Family interests are a key consideration in the strategic planning process [65]. Nevertheless, the basic strategic management processes in both family and non-family businesses are similar [66]. In both cases, strategy, explicit or implicit, must be formulated, implemented and reviewed for its appropriateness to the company’s goals and values. The differences, however, relate to the set of objectives, how they are to be achieved and the composition of the board of directors responsible for the company’s strategies [67].

The typical development strategy of a family business can be compared to the behavior of a tortoise. The latter is long-lived, able to survive unfavorable socio-economic conditions. Its carapace reflects the family’s environment and its values as tradition, organizational culture and a preserved multi-generational perspective. The above values have a fundamental impact on strategic planning, which is particularly evident in the case of small and micro-enterprises [15,68].

In classical terms, strategic management is associated with a strategic pyramid, built around vision and mission, medium and long-term goals. Specific effectiveness and efficiency criteria for achieving the company’s objectives are also important for its formation [69]. In practice, however, the operation and management of small business enterprises is not as in the textbook description of the strategic management process [70]. The vision of one’s own enterprise is the fundamental reason and purpose of the family’s business continuity and is inscribed in its functioning [71]. In turn, the mission of a family business is often not formalized. Therefore, the activities of such a business are most often conditioned by a certain ‘guiding purpose’ rather than a clearly formulated vision and mission. A similar objective is adopted as a kind of strategic intention. Its essence is related to the factors influencing the competitiveness of a given enterprise and proper use of opportunities (Figure 1). It should not be forgotten that the SME sector also includes medium-sized enterprises, for which the management system is more formalized than that of micro or small businesses. Thus, the SME sector is diverse and with a low degree of homogeneity.

If the strategic intention is implemented through the identification of challenges and the search for opportunities, can such management be a particular way of implementing strategic management? In order to answer the question, it is necessary to outline some foundations. Such a basis is the systems theory [73]. The organization is seen here in the context of its environment—as a system and an element of a larger system. Every organized whole is made up of its parts and connections (relations and compressions). Systems theory considers enterprises taking into account their specificity, in terms of their wholeness, growth, competition, mechanization, degree of centralization, intentionality and equivalence [74,75]. In doing so, the behavior of systems cannot be fully explained by reducing it to relationships between parts or to an analysis of cause and effect, dependent and independent variables, stimuli and responses [76].

Systemic management is effective when the organization takes continuous action to improve processes, resources, methods and techniques, develops mutually beneficial relationships with the environment [77]. In this way, the postulate of holism (holistic study of complex networks of relations) acquires significance [76]. It is worth recalling the concept of holistic management as a comprehensive approach to management. In cognitive science terms, holism is a holistic, multidimensional and multifaceted view, an approach opposed to reductionism. This concept assumes the existence of synergistic relationships and refers to the philosophical theory of development [78]. According to holistic management, greater efficiency is achieved when an organization is managed as a collection of interrelated parts rather than individual elements. This is because holistic management triggers the synergy effect and contributes to an increase in organizational effectiveness [77,79]. In the holistic management, organizations, societies and environmental resources are considered as relationships between elements of the whole [80]. Management in small and medium-sized enterprises can be understood in just such a way. The opportunity to do so is provided by the size of SMEs and the opportunity that emerges from this to grasp the objectives of business activities holistically.

Thus, linking the strategies of family businesses to those of SMEs may be the most appropriate. In this way, prudence in investments, the long-term perspective of family businesses, the flexibility to adapt to changing market conditions, a relatively simple organizational and legal structure and attention to job stability are combined in SMEs.

3. Materials and Methods

Authors define the main research problem as the lack of adequate knowledge of the strategies undertaken by family enterprises of the SME sector in Poland during periods of varying socio-economic conditions. We address it using qualitative methods (the theoretical part of this paper) and quantitative methods (the empirical part of the paper, a survey of family enterprises of the SME sector):

• Qualitative methods: (a) a critical analysis of existing explanations of the concept and essence of family enterprises; (b) a review of the literature on the determinants of enterprise development in the light of Industry 4.0. The application of qualitative methods allowed development of an author’s frame of the context of development of family enterprises of the SME sector in the perspective of Industry 4.0;
• Quantitative methods: (a) a taxonomy analysis of structures based on the similarity index (SI) of the surveyed structures; (b) a comparative analysis using cross-tabulations explaining the impact of the independent variable on the dependent variable.

The questionnaire surveys conducted helped to broaden the knowledge of the strategies implemented in family businesses.

• Object scope of the research: the strategies implemented by the surveyed units during the adopted research periods, including their type, nature and planning;
• Subject scope of the research: 130 family businesses surveyed, including 88 micro-, 22 small and 20 medium-sized enterprises;
• Activity of the surveyed entities: service enterprises excluding sections A, K, O and U [81]. Service enterprises have been particularly affected by the pandemic crisis [82,83,84]. At the same time, their contribution to the economy development remained significant [85,86];
• Spatial scope: the Masovian Voivodeship, one of the most economically developed areas of Poland. The choice was dictated by the largest number of family businesses in the SME sector in this province of Poland [87]. There are more than 2 million family businesses in Poland, which generate up to 72% of GDP and provide about 8 million job positions [88];
• Temporal scope: the research was conducted between 23 January 2023 and 6 February 2023. It considers two socio-economically differentiated periods: the time preceding the COVID-19 pandemic (2018–2019) and the period of its duration (2020–2021).

The selection of the research sample was purposive, which was dictated by the substantive justification of the lack of a publicly available database of family enterprises in Poland and the lack of a legal definition of a family enterprise [21]. The survey included enterprises that met the following criteria:

• They declared themselves as family-owned entities. These are businesses where: at least two members of the owners’ family or related person work; at least one of them has a say in management; the family or related persons own over 50% of the business;
• Belong to the SME sector. Micro-enterprise has <10 employees, turnover and/or total annual balance sheet does not exceed €2 million. A small enterprise has <50 employees, turnover and/or annual balance sheet total does not exceed €10 million. A medium-sized enterprise has <250 employees, a turnover not exceeding €50 million and/or an annual balance sheet total not exceeding €43 million;
• Have performed service activities, have been operating on the economic market at least since 2018, have their registered office in the Mazowieckie Voivodeship.

The surveys produced results for the three size classes of family businesses and for the SME sector as a whole. This research was complemented by a taxonomy of structures analysis. This was conducted based on the structure’s similarity index (SI) among the surveyed family enterprises. For this purpose, the formula was used:

$$SI={\displaystyle \sum }_{i=1}^n\min \left(pi0,pi1\right)$$

where SI—structure similarity index, i—structure component number, n—number of structure components, pi₀—share of the i_n structure component in the analyzed total at time t₀, pi₁—share of the i_n structure component in the analyzed total at time t₁, min.—minimum value of the structure component.

Similarity can also be determined for the same period when examining different structures (e.g., comparing micro- and small enterprises). In this case, the formula takes the form:

$$SI={\displaystyle \sum }_{i=1}^n\min \left(pi1,pi2\right)$$

where pi₁—share of the i_n component in the first structure, pi₂—share of the i_n component in the second structure. Structure similarity index takes values in the range <0,1>. SI = 1 when the compared structures are identical; SI = 0 when they are completely different.

The adoption of the assumptions presented above in the selection of research objects is associated with a certain methodological limitation. This is because it is not possible to generalize the obtained results to all family enterprises of the SME sector in Poland. Given the adopted research hypotheses and the assumed research problem, it should be assumed that a similar limitation does not nullify the value of the work.

4. Empirical Results of the Research

4.1. Development Strategies in the Family Enterprises in the SMEs Sector in Poland

Among the surveyed family enterprises from the SME sector, 53.1% are entities that had only one owner. Within this group, micro-enterprises account for 61.4%, small—45.5%, medium-sized—25%. Entities with 2–3 owners account for 46.2% of SMEs, including 38.6% of micro-enterprises, 54.5% of small, and 70% of medium-sized enterprises. Only among medium-sized enterprises was 5% with 4–5 owners. The structure similarity index (SI) shows the lack of structure similarity between micro- and small enterprises, small and medium-sized enterprises, and micro- and medium-sized enterprises; its value is in the range of 0–0.05. The presented data show that the share of units with a greater number of owners increases along with the increase in the size class of enterprises. This regularity is related to the legal form of the enterprise and the resulting management method (

Table 1. Legal form and method of management in the surveyed enterprises in Poland.

Specifics	Company Size Class			SME
	Micro	Small	Medium
	Share, %
Number of Business Owners/Co-Owners
1	61.4	45.5	25.0	53.1
2–3	38.6	54.5	70.0	46.2
4–5	0.0	0.0	5.0	0.8
Structure similarity index (SI)	SImic/sm = 0.0
		SIsm/med = 0.05
	SIsm/med = 0.05
Legal Form
Self-employed natural person	62.5	40.9	0.0	49.2
Private partnership/civil law partnership	25.0	36.4	5.0	23.8
General partnership	1.1	22.7	30.0	9.1
Limited partnership	2.3	0.0	10.0	3.1
Limited joint-stock partnership	0.0	0.0	5.0	0.8
Limited liability company	9.1	0.0	50.0	13.8
Structure similarity index (SI)	SImic/sm = 0.0
		SIsm/med = 0.0
	SIsm/med = 0.0
Management and Leadership Styles
Centralization of management (owners manage the business themselves; patriarchal/autocratic management style)	42.0	50.0	45.0	44.6
Decentralization of management (management is influenced by other family members and/or external managers; democratic or liberal style)	58.0 (53.0 *)	50.0 (41.0 *)	55.0 (30.0 *)	54.6 (46.9 *)
Structure similarity index (SI)	SImic/sm = 0.92
		SIsm/med = 0.95
	SIsm/med = 0.87

Explanation: The data included in this table refer to information provided by survey respondents as a part of the general information of the enterprise. It is not parted on research periods. *—management is influenced by other family members (except owners). SI_mic/sm—similarity of structures of micro and small enterprises, SI_mic/med—similarity of structures of micro and medium enterprises, SI_sm/med—similarity of structures of small and medium enterprises. Source: own study.

).

The table above shows that as the size class of enterprises increases, their legal form changes. Smaller entities use simpler legal forms (e.g., a natural person conducting business activity or partnerships that do not require a founding contribution). Medium-sized enterprises reach for both personal and capital organizational and legal forms. Structures of micro-, small and medium-sized enterprises are completely different in this respect: SI = 0.0.

The data on the method of management and the adopted management style of the enterprise show that micro-, small and medium-sized enterprises are managed in a similar way. Nearly half of them showed centralized management and a patriarchal management style. The rest show decentralized management and a democratic style of leadership. About 92% of SMEs showed the influence of the family on management (95–99% in micro- and small enterprises, 80% in medium-sized). The similarity of the examined structures (SI) was high and ranged from 0.87–0.95.

4.2. Specifics of the Development Strategies of Family SMEs in Poland in the Period before and during COVID-19 Pandemic

Taking into account socio-economically diverse research periods (the time immediately preceding the COVID-19 pandemic and the period of the pandemic), the method of strategy planning in family enterprises was identified. The relevant data are shown in Figure 2.

Research has revealed that there has been a shift in strategy planning in family SMEs because of the pandemic crisis. While before the pandemic, nearly 43% of the surveyed SMEs showed a planned strategy, during the pandemic this percentage decreased by 6.5 p.p. At that time, over 64% of all surveyed SMEs indicated an emerging strategy. Changes were less noticeable among micro- and small enterprises. The change was fundamental among medium-sized enterprises—all of them showed the adoption of the strategy formulated during the pandemic. In this period, medium-sized enterprises adopted a “wait and see” planning philosophy, strategies resulting from the observation of changing economic reality, e.g., sudden changes in demand and supply (breaking global supply chains, demand shock caused by lockdowns and reducing the level of wages due to the decrease in economic activity of enterprises) [89]. Although medium-sized enterprises are characterized by the most extensive management system among SMEs, the use of advanced techniques and methods of competitive activities, including action strategies, their strategic approach to planning during the COVID-19 pandemic was more like adopting an attitude waiting for change.

In this way, Hypothesis 1 was confirmed (“With the change in socio-economic conditions caused by the COVID-19 pandemic, family enterprises in the SME sector, when designing their strategy, more often adopted a pattern of activities that developed over time (emerging strategy), and less often a strategy having the character of planned activities supporting the mission and long-term goals of the company”). Such strategies were particularly evident in medium-sized enterprises.

In further research on family SMEs, the issue of whether and what form of strategy these enterprises have was explored (Figure 3).

It can be shown that pprox. 60% of family businesses in the SME sector had a strategy (formalized—12.3%, or informal—29.2%) or implemented the strategic intention (18.5% of SMEs). The highest percentage of enterprises with a formalized form of strategy was found among medium-sized entities (20%). To a lesser extent, this concerned micro-enterprises (11.4%) and small enterprises (9.1%). Nearly 24% of micro- and 14% of small enterprises showed the strategic intention, which was not observed among medium-sized enterprises. The remaining part of SMEs did not have a strategy (40%).

The presented results confirm Hypothesis 2 (“A significant part of family enterprises in the SME sector do not have a classically understood development strategy and do not implement the so-called strategic intention.”).

4.3. Changes in the Strategies of SMEs in the Periods 2018–2019 and 2020–2021

The next stage of the empirical research was to examine whether and how companies changed their strategies in the periods 2018–2019 and 2020–2021. Respondents made a choice from several proposed types of strategies:

• Expansive development strategies implemented by: (a) market development (searching for new consumers or new markets for the products held); (b) market penetration (striving to increase sales of products already offered on existing markets); (c) product development (creating modernized products to meet the needs of existing markets);
• Other development strategies involving: (a) traditional competition strategies such as quality leadership, cost leadership, concentration (focusing on a selected market segment), external and internal diversification; (b) conservative-compression approach (conservative strategy, corrective strategy and defensive strategy); (c) other strategies indicated by respondents. Traditional competition strategies such as cost leadership, differentiation and concentration can be used simultaneously, although this practice is rather rarely used [90].

Respondents pointed only to the expansive strategy, the traditional competitive strategy and the conservative-compressive strategy. In the two research periods, there is a clear differentiation between medium-sized, small and micro-enterprises. Approx. 43% of the surveyed medium-sized enterprises did not implement expansive strategies during the pandemic; 50% of respondents from this group pointed to the conservative and defensive conservative-compression strategy.

In micro family businesses, changes in strategy were not significant in both research periods. The most popular strategies in the period preceding the pandemic (2018–2019) in these companies were expansion through market development (searching for new customers or new markets for their products) and market penetration (striving to increase sales of products already offered on existing markets). Traditional strategies of competition, in particular strategies of external concentration and diversification, were also often indicated. During the pandemic (2020–2021), traditional strategies chosen by micro-enterprises were primarily associated with cost leadership and the strategy of concentration and internal diversification (creating new products or types of activity using own resources).

In the period before the pandemic (2018–2019), small family businesses were dominated by strategies related to expansion through market development and product development. During the pandemic (2020–2021), these companies were dominated by expansion strategies through market development and market penetration. Among the traditional strategies in small enterprises, external diversification and concentration were chosen, while during the pandemic, qualitative leadership was mainly used.

Among family enterprises of the SME sector that consciously implement a development strategy, only 44.31% continued the strategy adopted before the pandemic, while 55.69% of them changed this strategy to a different one. The results confirm the partial identification of the same strategies among family SMEs, and in particular the presence of market development strategies and traditional strategies in both periods (Figure 4).

In this way, Hypothesis 3 was confirmed (“During the COVID-19 pandemic (2020–2021)—compared to the pre-pandemic period (2018–2019)—the share of family SMEs implementing expansionary strategies decreased, and the share of those with conservative-compressive strategies increased.”). At the same time, the number of SMEs implementing expansionary strategies decreased by 3.9 p.p. during the pandemic. The number of enterprises reaching for conservative-compression strategies increased by only 2.21 p.p., all SMEs. However, among medium-sized enterprises it was very significant.

The last research problem of this study was the dependance between the implementation of the development strategy of family SMEs and their innovative activity. This issue is particularly important in the context of the contemporary conditions of Industry 4.0. The crosstab below shows the size relationship between SMEs pursuing the same strategies in 2018–2019 and 2020–2021.

Table 2. Innovative activity of family enterprises in the SME sector and their strategies.

Development Strategies for the Period 2018–2021	Have Innovative Measures Been Applied between 2018 and 2021?
	YES		NOT		In Total
	Number of Companies	%	Number of Companies	%	Number of Companies	%
without a change in strategy	25	37.3	10	15.9	35	26.9
change in strategy	30	44.8	14	22.2	44	33.8
no strategy of any kind	12	17.9	39	61.9	51	39.2
in total	67	100.0	63	100.0	130	100.0

Source: own study.

shows that enterprises that had a strategy(s) were more than twice as likely to use innovation as those that did not have any strategy: 82.1% of SMEs that had a development strategy showed innovative activity, and only 17.9% conducted an innovative activity without a development strategy. The share of those enterprises, which did not implement a strategy and did not conduct innovative activities, was as high as 61.9%. Therefore, it can be emphasized that there is a dependance between having a development strategy and undertaking innovative activities. It is noted that enterprises are more inclined to conduct innovative activities when their development strategy is implemented.

The results of this research are very important considering the activities of contemporary enterprises in the conditions of Industry 4.0, based on the development of knowledge, including through the implementation of innovation processes in enterprises. Therefore, the validity of Hypothesis 4 can be confirmed that “There is a positive relationship between the implementation of development strategies in family enterprises of the SME sector and its innovative activities, which fits into the contemporary trends of industry 4.0”.

5. Conclusions

• The literature base: The analysis of the literature on the subject revealed the dependance between strategic management in family enterprises in the SME sector, adopted organizational culture and professed values in these entities. Growth planning here is long-term in nature, not based solely on profits but on sustainable development, where it is often the intention of the owner(s) to pass the business on to the next generation. This is reflected in the strategic planning and approach to new technologies and their implementation in family businesses;
• Management styles: As far as company management style is concerned, about 92% of Polish SMEs showed the influence of family on management (95–99% in micro- and small enterprises, 80% in medium-sized ones). An issue that requires further research is the influence of the company’s management style on the development strategies applied;
• Presence of development strategy: A significant proportion of family enterprises in the SME sector do not have a development strategy, nor do they pursue a so-called strategic intention. The research shows that only 60% of family enterprises have a strategy of any kind: 12.3% have a formalized strategy, 29.2% have a non-formalized strategy, and the remaining 18.5% only have a strategic intent. The highest number of enterprises with a formalized strategy was recorded among medium-sized entities (20%). In the case of micro and small enterprises, the figures are 11.4% and 9.1% respectively;
• Pandemic-driven strategy changes: During the pandemic, the share of SMEs pursuing expansive strategies decreased, while the share of those pursuing conservative-compressive strategies increased. Before the pandemic, about 56% of family establishments followed an emergent strategy, and nearly 43% followed a planned strategy. During the pandemic, these numbers were 75% and 25%, respectively. In the two study periods, there is a clear differentiation between medium-sized, small and micro-enterprises in terms of the growth strategies they used. For example, although medium-sized enterprises are characterized by the most advanced management systems among family-run SMEs and the use of advanced competitive techniques and methods, they took a wait-and-see approach during the pandemic. As far as micro-enterprises are concerned, the pandemic did not substantially affect their strategies. In both study periods, an emergent strategy prevailed among them (55.8% and 55.6% respectively);
• Development strategy and innovation: There is a positive relationship between the implementation of a development strategy in family businesses in the SME sector and their innovation activity, which is in line with Industry 4.0 trends. The research showed that businesses declaring any strategy were more likely to use innovation than those that did not have a strategy. As many as 82.1% of SMEs that had a development strategy showed innovation activity. However, only 17.9% of the enterprises without any strategy were implementing innovations. The share of enterprises with no strategy and no innovative activity was as high as 61.9%. It is noteworthy that the innovative approach in family businesses implementing development strategies managed to remain at a similar level of activity during the analyzed periods. This confirms the thesis that the implementation of a development strategy is the basis for the realization of innovation and can be an important factor in building a competitive advantage.

The results obtained are important for understanding the specificity of family businesses in a dynamically changing socio-economic reality, which is heavily influenced by factors such as crises (COVID-19 pandemic) or transformations (Industry 4.0). This study shows a close correlation between the size of a given enterprise, its management style, the possession of a development strategy, the changes to these strategies caused by the volatility of external conditions and innovation. More detailed conclusions can be obtained in the course of more detailed research, which is beyond the scope of this article and is a task for the near future.

In addition, the research has revealed: low awareness among owners of family businesses of the need to have a development strategy; the lack of a uniform definition of family businesses in Poland, which makes it difficult to develop appropriate legal and statistical tools; the lack of nationwide databases and detailed research on family businesses carried out by central institutions and administrative offices dealing with obtaining, processing and making available statistical information. In particular, a cyclical publication in this area would be extremely valuable.