Concept Paper-NC1030
Resilience
Sharon M. Danes & Jinhee Lee, March 2007
The conceptual definition of resilience in this concept paper is outlined from three perspectives: disaster literature referring to small businesses, SFB Theory, and family literature.
Disaster Literature Referring to Small Businesses
Federal disaster aid was instituted to facilitate recovery. However, research has found that disaster assistance helps individuals recover, but not businesses (Alesch et al., 2001). Little is known about economic losses experienced by small businesses after a natural disaster or the long-term impactof losses (Alesch et al., 2001; Rose, 2004). Although researchers expected to find that disaster assistance aided business recovery, Webb, Tierney, & Dahlhamer, (2000) found no significant effect, and Dahlhamer and Tierney (1998) found post-disaster aid was negatively related to disaster recovery. Two explanations were offered: (a) the worst damaged businesses received assistance, and (b) the greatest proportion of business disaster assistance was loans that increased debt load and eventually led to business closure.
Recent business interruption loss research introduced the concept of resilience capacity defined as resources an entity needs in order to undertake new adjustment-related tasks in relation to their on-going responsibilities (Nigg, 1995). Rose (2004) distinguished between capacity (stock) and the use of the capacity (flow). This study utilizes a longitudinal, representative sample of family firms to investigate thefederal disaster assistance effect on small businesses controlling for their resilience capacity.
SFB Theory (Used in NSF proposal)
In contrast to other business Theorys, the SFB Theoryposits that at the family-business interface, each system responds to disruptions in regular patterns by exchanging resources across systems, creating a capacity for resilience in the face of disruptions (Olson et al., (2003). A capacity for resilience against disruptions can be built in both the family and business systems. The resilience capacity created in the family system is permeable and is transmitted to the business system. As portrayed in the SFB Theory, resilience is the ability of the family business to adjust resource and interpersonal processes to internal and external disruptions (Stafford et al., 1999). The capacity for resilience is a reservoir of individual and family resources that cushion the family business against disruptions and is characterized by individual and collective creativity used to solve problems and get work done (Conner, 1992; Danes, 1999, 2006). If families have built a stored capacity for resilience, when it encounters a disaster or acute disruption, the store of trust and creativity in problem solving can be more easily and quickly tapped and adapted to the new situation. Three processes contribute to resilience capacity in family businesses: family functionality, cognitive predisposition for scheduling congruity, and pattern of adjusting to disruptions. The strength of these processes creates a set of mechanisms that will tend to automatically kick in when encountering natural disasters.
Family functionality represents the stability of the family and is measured by family APGAR which has five components: adaptation, partnership, growth, affection, and resolve (Smilkstein, 1978; Smilkstein, Ashworth, & Montano, 1982). Each component has a unique function, yet is related to the whole (Danes & Morgan, 2004). It connotes a sense of trust, creativity, and openness that brings a family’s interactions to a higher level of responsiveness (Danes & Morgan, 2004; Stewart & Danes, 2001). It was developed to assess the capacity of a family to respond to a health emergency and help take care of a family member. It has been found to distinguish between families that hold together and families that fall apart (Sawin,and Harrigan, 1995). The cognitive predisposition for scheduling congruity represents knowledge family members have about decision making and activity coordination (Avery & Stafford, 1991; Stafford & Avery, 1993). It measures the extent to which different schedules pursued by a family, both individually and collectively, fit together harmoniously, appropriately, and agreeably into group knowledge and action (Stafford and Avery, 1993). Lack of congruity undermines efficiency and reduces cooperation and decreases resilience.
Intermingling of family and firm finances is another adjustment strategy building resilience capacity. Small firm finance research has basically missed family-firm intermingling of finances in business-owning families. That literature has concentrated on profit maximization and risk tolerance preference Theorys, the financial and regulatory structure of corporate financial mar-kets, or used samples from the upper bounds of what constitutes a "small" firm (Haynes & Avery, 1997). Haynes et al. (1999) found that two-thirds of family firms intermingled household and firm finances, indicating that finances are inextricably intertwined. When investigating family-to-firm intermingling, sole proprietorships were more likely to use family resources in the firm than other types of firms, as were those who were younger owners, and owners without children. Intermingling of money also made it virtually impossible to predict the impact of a loan on firm success. Intermingling may affect family firm ability to qualify for assistance.
Comparing Resilience Capacity Definitions from SFB Theory and Hazard Research
In the SFB Theory, resilience capacity is defined as a reservoir of individual and family resources that cushion the family business against disruptions characterized by individual and collective creativity used to solve problems and get work done (Conner, 1992; Danes, 1999, 2006). It is measured by family functionality, cognitive predisposition for scheduling congruity, and adjusting to disruption pattern. Resilience is defined in hazard loss literature as the ability to cushion or reduce potential losses (Cutter, Boruff, & Shirley, 2003; Tierney, 1997). Rose and Lim (2002) operationally defined firm resiliency as the difference between actual and potential loss and he measured it by the use of inventories and back up equipment, substitution of non-disrupted inputs, process change, conservation, making up lost production at a later date, substitution of imports for locally produced goods, and substitution of exports for local demand.
There is a conceptual difference between the store of resilience capacity and taking actions that draw on capacity to mitigate loss from a disaster. Rose and Lim (2002) defined resilience as an outcome state rather than an input of capacity. They then proceeded to measure resilience by actions taken to influence the outcome state, as a set of processes. In the SFB Theory, resilience capacity is a resource input (a stock of a type of human capital). Resilience is a change in outcome state that can only be measured by three points in time. Actions taken to influence the outcome, adjustments to disruptions, may be either resilient or nonresilient, depending on their effect on the outcome state. Because the proposed project will have three points in time-before disaster, the disaster, and after the disaster-the work of the project will be able to distinguish between resilience capacity, resilience with nonadjustments to the disaster, and resilience with adjustments to the disaster. Resilience is short-run survival. The project work can distinguish between resilience, so defined, and long-run survival and success, more akin to sustainability.
Family Literature
There is much literature on resilience but most of it is on resilience in individuals versus families (Patterson, 2000b; Walsh, 2003). Further; there is not conceptual clarity in the family resilience literature about how the term is defined and applied. It is defined and applied very differently by clinical practitioners and family researchers (Patterson, 2002a). Patterson (2002a), in an attempt to bring conceptual clarity, emphasized the importance of making conceptual and operational distinctions between family system outcomes and family protective processes. In so doing, Patterson (2002a) distinguished between familyresiliency as capacity and family resilience as a process. This distinction is similar to the stock versus flow of resilience that Rose (2004) identified in the disaster literature.
Family resiliency is the capacity, characteristics, properties, and qualities of a family system to successfully manage their life circumstances in the face of crisis situations(Patterson, 2002b; McCubbin & McCubbin, 1988; Lavee, McCubbin, & Olsen, 1987 [Deleted]). Family resilience, on the other hand, is [Deleted] ongoing and dynamic processes by which families are able to adapt and function competently following exposure to significant adversity or crisis, both in the present and over long periods of time rather than being static ([Deleted] Hawley & Dehaan, 1996; Luthar, Cicchetti, & Becker, 2000; Conger & Conger, 2002; Patterson, 2002a, 2002b) [Moved & Merged into the next paragraph & Modified] .
Masten and Coatsworth (1998) clarified three conditions necessary for considering resilience in individuals. Adapting those three conditions to family as the unit of analysis, Patterson (2002b) stipulated that (a) family-level outcomes need to be conceptualized so it is possible to assess the degree to which a family is competent in accomplishing the outcome, (b) there must be some risk associated with the expectation that a family will not be successful, and (c) there must be a need to understand what protective mechanisms prevent poor expected outcomes. Patterson(2002b) emphasized that significant risk, protective factors, and outcomes each must be distinctly defined to decide if a family has engaged in a process of resilience.A family level outcome (whether a family is resilient) is the degree to which they are able to successfully fulfill their function so that individual family members and other social systems benefit (Patterson, 2002b).Family risks or disruptions could be classified, based on the nature and extent of the risk exposure, in three different ways: discrete events of change, daily hassles, and on-going family strains (insidious unresolved tensions) (Patterson, 2002a). Patterson(2002b) also focused on the relational processes within families as the primary protective mechanisms: family cohesiveness, flexibility, and the quality of affective and instrumental communication patterns.
Community and cultural contexts in which a family resides is very important to take into account when doing research of resilience in families (Boss, 2001: Hawley & Dehaan, 1996; Walsh, 2003). Patterson (1993) and Patterson and Garwick (1994) also indicated that family meanings might be an important construct in understanding how the resilience process unfoldsbecause family meanings shape the nature and extent of risk, as well as the protective capacity of a family. They describe three levels of family meanings that might be important: (a) families’ definitions of their demands and capabilities, (b) how the family sees themselves internally as a unit, and (c) their world view (how they see their family in relationship to systems outside of their family.
Within the family resilience literature is a construct relevant to family world view identified as a sense of coherence. The sense of coherence refers to the extent to which one sees one’s world as comprehensible, manageable, and meaningful (Antonovsky & Sourani, 1988).Exploring whether sense of coherence might be considered a family-level construct, McCubbin, Thompson, Thompson, Elver, & McCubbin. (1994) defined family coherence as a shared world view expressing the family’s feelings of confidence. This construct [Deleted] contributes to resilience capacity in much the same way as the scheduling congruity construct discussed earlier in that it is an enduring and dynamic feeling of confidence that one’s internal and external environments are predictable (Antonovsky & Sagy, 2001; Antonovsky & Sourani, 1988). These authors indicate that the sense of coherence has three characteristics: consistency, underload-overload balance, and participation in socially valued decision making. A sense of coherence is a mechanism to adjust to disruptions because it is characterized by a tendency to see life as predictable and manageable.
Taking a life-cycle perspective on resiliency, well-functioning families have an evolutionary sense of time and becoming with the balance shifting between disruptive events that heighten vulnerability and protective processes that enhance resilience (Hawley & Dehaan, 1996; Walsh, 2003). In regards to re-establishing balance after disruptions, Walsh (2003) stipulated that a firm, yet flexibly authoritative leadership is most effective for the well-being and continued healthy functioning of families.
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