Technological Innovation in Family Firms

2020 ◽  
pp. 168-190
Author(s):  
Mario Ossorio
Keyword(s):  
Technological Innovation ◽  
Family Firms ◽  
Innovation Management ◽  
Innovation Process ◽  
Family Ownership ◽  
The Third ◽  
The Family ◽  
Innovation Output ◽  
Innovation Strategies ◽  
External Actors

This chapter illustrates the main issues with respect to innovation process within family firms. In the first part, it describes the main theories underlying the innovation process of family firms (agency theory, altruism, portfolio theory, stewardship theory, socioemotional wealth perspective). In the second part, it exposes the R&D underinvestment problem in large companies with a focus on the effect of the family ownership on the R&D investments. In the third part, it describes the effect of family ownership on the innovation output with a focus on the kind of innovation (radical vs. incremental). In the fourth section, studies exploring the innovation strategies of family firms (prospectors, analysers, defenders, reactors) are examined. In the fifth section, it sheds light on the innovation management process of family firms. In this part, it explores the issues of internal innovation process (functional vs. cross-functional structure) and of the partnerships with external actors aimed to generate innovation.

scholarly journals Value creation and value appropriation in innovation process in publicly-traded family firms

2015 ◽  
Vol 53 (9) ◽  
pp. 1921-1952 ◽  
Author(s):  
Esra Memili ◽  
Hanqing Chevy Fang ◽  
Dianne H.B. Welsh
Keyword(s):  
Family Business ◽  
Value Creation ◽  
Generational Differences ◽  
Family Firms ◽  
Innovation Process ◽  
Family Ownership ◽  
Publicly Traded ◽  
Value Appropriation ◽  
Content Type ◽  
Significant Difference

Purpose – The purpose of this paper is to examine the generational differences among publicly traded family firms in regards to value creation and value appropriation in the innovation process by drawing upon the knowledge-based view (KBV) and family business literature with a focus on socioemotional wealth perspective. Design/methodology/approach – The authors tests the hypotheses via longitudinal regression analyses based on 285 yearly cross-firm S & P 500 firm observations. Findings – First, the authors found that family ownership with second or later generation’s majority exhibits lower levels of value creation capabilities compared to non-family firms, whereas there is no difference between those of the firms with family ownership with a first generation’s majority and non-family firms. Second, the authors also found that family owned firms with a first generation’s majority have higher value appropriation abilities compared to nonfamily firms, while there is no significant difference in value appropriation between the later generation family firms and non-family firms. Research limitations/implications – The study help scholars, family business members, and investors better understand family involvement, and how it impacts firm performance through value creation and value appropriation. Originality/value – The paper contributes to the family business, innovation, and KBV literature in several ways. While previous family business studies drawing upon resource-based view and KBV often focus on the value creation in family governance, the authors investigate both value creation and value appropriation phases of innovation process.

Is family ownership of a firm associated with the control of managerial discretion and corporate decisions?

2016 ◽  
Vol 6 (1) ◽  
Author(s):  
Jennifer Martinez Ferrero ◽  
Lázaro Rodríguez-Ariza ◽  
Manuel Bermejo-Sánchez
Keyword(s):  
Ownership Structure ◽  
Design Methodology ◽  
Family Firms ◽  
Managerial Discretion ◽  
Family Ownership ◽  
Managerial Decisions ◽  
Corporate Decisions ◽  
Type Design ◽  
The Family ◽  
The Impact

Purpose This paper considers the association between family firms and managerial discretion, hypothesising that a higher degree of family ownership may decrease the conflict of interest between owners and managers, thus avoiding the risk of discretionary actions by the latter. Design/methodology/approach Our empirical analysis is based on a large sample of international listed companies from 20 countries including the Special Administrative Region of Hong Kong and covers the period 2002–2010. Methodologically, we use a logit model with marginal effects on the panel data. Findings Our analysis shows that family ownership is associated with greater control and monitoring of managerial decisions, thus avoiding information asymmetries and, therefore, the risk of discretionary actions. In other words, family owners impose a stronger discipline and dissuade non-family managers from using managerial discretion to act in their own interest. Finally, we clarify the inconclusive results reported previously about the effects of family ownership on discretionary practices. Originality/value Our paper contributes to the family firm literature by providing evidence of the impact of ownership structure on the level of discretionay practices. Furthermore, we explore the differences between family and non-family firms as each group has its own varied characteristics. Moreover, in contrast to most previous studies, which have focused on only one country, we extend the analysis to include an international sample of 20 countries. This leads to potentially more powerful and generalizable results.

Revealing the family

2017 ◽  
Vol 7 (1) ◽  
pp. 21-43 ◽  
Author(s):  
Christoph Kahlert ◽  
Isabel C. Botero ◽  
Reinhard Prügl
Keyword(s):  
Design Methodology ◽  
Family Firms ◽  
Job Security ◽  
Family Ownership ◽  
Content Type ◽  
Advancement Opportunities ◽  
European Context ◽  
Applicant Perceptions ◽  
The Family ◽  
Organizational Age

Purpose Attracting and retaining a skilled labor force represents an important source for competitive advantage for organizations. In the European context, one of the greatest challenges that small- and medium-sized family firms face is attracting high quality non-family applicants. Researchers argue that one of the reasons for this difficulty is tied to the perception that non-family applicants have about family firms as a place to work. The purpose of this paper is to explore the perceptions that applicants have about family firms and their willingness to work in family firms in the German context. Design/methodology/approach Using principles from signaling theory, an experiment was conducted to explore the effects that information about family ownership and organizational age had on the perceptions about a firm (i.e. job security, advancement opportunities, prestige, task diversity, and compensation), and applicant’s attractiveness to it. Findings Based on the responses from 125 individuals in Germany, the authors found that explicitly communicating information about family ownership did not influence applicant perceptions about the firm or attractiveness to it. Although, information about organizational age affected perceptions of compensation, it did not affect attractiveness to the firm. Originality/value This study presents one of the first papers that focuses on the perceptions that non-family applicants have about family firms as a place to work in the European context. Thus, it provides a baseline for comparison to applicant perceptions in other European countries.

Technological innovation and socioemotional wealth in family firm research

2018 ◽  
Vol 16 (3) ◽  
pp. 270-301 ◽  
Author(s):  
Rubén Martínez-Alonso ◽  
María J. Martínez-Romero ◽  
Alfonso A. Rojo-Ramírez
Keyword(s):  
Conceptual Framework ◽  
Technological Innovation ◽  
Family Business ◽  
Family Firms ◽  
Current Knowledge ◽  
Integrative Approach ◽  
Socioemotional Wealth ◽  
Content Type ◽  
The Family ◽  
New Research

Purpose There are currently two issues that generate growing interest among specialized scholars within the family business field: technological innovation (TI) and socioemotional wealth (SEW). While it is true that both topics are highly popular among researchers, the joint study of both perspectives is scarce. Thus, the purpose of this paper is to analyse the interrelationships between TI and SEW in the context of family firms. Design/methodology/approach This literature review systematically analyses the findings of 25 journal articles focusing on TI and SEW, published between 2012 and 2018. Findings The findings reveal an integrative approach, identifying different variables that relate TI and SEW. A conceptual framework is built in which these variables are incorporated into four categories (SEW, TI, moderating effects and performance). New lines of research emerge with the development of a conceptual model and the formulation of six propositions. Practical implications The conceptual framework can be useful as integrative summary of the factors that family business managers and directors should take into account to be successful in implementing innovative projects and strategies. Originality/value The study of TI from the SEW approach has emerged as a fruitful field of research in recent years, but the current knowledge of the role that SEW plays in family firms’ TI is still scarce. This paper contributes to the family business literature by offering a conceptual framework of the SEW–TI relationship and new research avenues that will provide a better comprehension for scholars and specialists for future investigations in the field.

Research on the Evaluation Index System of Technological Innovation Capability in Cement Industry

2012 ◽  
Vol 268-270 ◽  
pp. 2075-2082
Author(s):  
Da Qi Xu ◽  
Tian Hai Hua
Keyword(s):  
Technological Innovation ◽  
Index System ◽  
Innovation Management ◽  
Cement Industry ◽  
Evaluation Index System ◽  
Evaluation Index ◽  
Innovation Capability ◽  
Complete Evaluation ◽  
Management Capability ◽  
Innovation Output

Combinating the process theory and system theory organically, this paper views enterprise’s technological innovation as a continuously improved system process. It builds a system model for the evaluation of technological innovation capability based on the view of process. Considering the features of cement industry, the technological innovation capabilities in cement industry are divided into innovation management capability, innovation input capability, research & development capability, manufacturing capability, marketing promotion capability and innovation output capability. And we propose a comprehensive and complete evaluation index system of cement industry’s technological innovation capability and provide a ruler for the evaluation of cement industry’s technological innovation capability

Entrepreneurial Risk Taking in Family Firms

2005 ◽  
Vol 18 (1) ◽  
pp. 23-40 ◽  
Author(s):  
Shaker A. Zahra
Keyword(s):  
Technological Innovation ◽  
Risk Taking ◽  
Opposite Effect ◽  
Family Firms ◽  
Family Ownership ◽  
Broad Definition ◽  
Economic Progress ◽  
Definition Of ◽  
Entrepreneurial Activities ◽  
Over Time

Family firms are widely recognized as a major source of technological innovation and economic progress. Yet, over time, some family firms become conservative and unwilling to take the risks associated with entrepreneurial activities. Adopting a broad definition of entrepreneurial risk taking, this study uses agency theory to highlight key correlates of risk taking among 209 U.S. manufacturing family firms. The results show that family ownership and involvement promote entrepreneurship, whereas the long tenures of CEO founders have the opposite effect. These results urge managers to capitalize on the skills and talents of their family members in promoting entrepreneurship and selective venturing into new market arenas.

Paradoxical influence of family ownership on innovation-focused organizational change

2019 ◽  
Vol 9 (4) ◽  
pp. 429-450
Author(s):  
Izabela Szymanska ◽  
Anita Blanchard ◽  
Kaleigh Kuhns
Keyword(s):  
Organizational Change ◽  
Family Business ◽  
Innovation Management ◽  
Research Question ◽  
Family Members ◽  
Innovation Process ◽  
Innovation Activity ◽  
Monitoring And Control ◽  
Content Type ◽  
The Family

Purpose The purpose of this paper is to focus on efforts of a large department store to increase its business advantage by boosting innovation. The first broad research question of this study investigated how the family and non-family members influence the process of organizational change aimed at greater innovativeness in a successful retail family business. The second research question was how the family enterprise handles the tension between change stemming from innovation and progress and the need for stability continuity tradition and maintenance of family control. Design/methodology/approach This study is an in-depth inductive analysis (Glaser and Strauss, 1967) of an important and unique case (Yin, 1994). Findings The results of the study indicate that the push toward innovation was initiated by family members and that it was focused largely on creating structural support for the innovation activity keeping this activity tightly under monitoring and control by upper management. The attempts at equipping employees with innovation-relevant decision-making authority or consulting the clients in designing novel projects were absent, while the move to change the organizational culture was measured. Originality/value This study makes several contributions to the academic literature. It offers an empirical assessment of the effects of emotional attachment and ownership concentration on innovation management, a phenomenon postulated by Kotlar et al. (2016). These two characteristics pulled innovation-boosting initiative in opposite directions creating a unique dynamics. This research also provides an example of organizational identity that hinders the innovation process in the context of a family business that survived and developed over generations.

Does family ownership affect the profitability of construction and real estate firms? Evidence from India

2020 ◽  
Vol 25 (1) ◽  
pp. 107-124
Author(s):  
Harish Kumar Singla
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Family Firms ◽  
Stock Exchange ◽  
Family Ownership ◽  
Unequal Variance ◽  
Content Type ◽  
Agency Conflict ◽  
The Family ◽  
Firm Profitability

Purpose The study aims to find if family-owned construction and real estate firms in India are more profitable compared to non-family-owned construction and real estate firms. The study also examines if family ownership and institutional ownership are drivers of the firm profitability. Design/methodology/approach The study uses data of 199 construction and real estate firms listed on the National Stock Exchange (NSE), India. The data pertains to a period of 13 years (2006-2018). The family firm is defined on the basis on ownership criteria, and the sample is divided into two groups, namely, family firms and non-family firms. The data is analyzed using a two-sample t-test assuming unequal variance and Prais–Winsten panel regression using correlated panels with corrected standard errors (PCSEs) procedure. Findings The findings suggest that family-owned construction and real estate firms are slightly more profitable compared to non-family-owned construction and real estate firms; however, family firms command lesser valuation in the market. The reason for this lower valuation is the mismatch between family holding and institutional holding. A family firm’s profitability is primarily driven by institutional holding that acts as mitigation against the agency conflict. Originality/value The paper is the first attempt to analyze the profitability of construction and real estate family firms, and compare it with non-family-owned construction and real estate firms.

scholarly journals Concentración de propiedad y valor de mercado en la empresa familiar : un enfoque de gobierno corporativo

2013 ◽  
pp. 111 ◽  
Author(s):  
Julio Pindado ◽  
Ignacio Requejo ◽  
Chabela De la Torre
Keyword(s):  
Firm Value ◽  
Family Firms ◽  
Generalized Method Of Moments ◽  
Ownership Concentration ◽  
Family Ownership ◽  
Minority Shareholders ◽  
Family Control ◽  
The Family ◽  
Nonlinear Relation ◽  
Better Than

Dada la importancia de las empresas familiares en todo el mundo, nuestro principal objetivo en este trabajo es investigar la relación entre concentración de propiedad y valor de mercado en elcaso particular de las compañías familiares. Además, estudiamos si las empresas familiares obtienen mejores resultados que las no familiares. Para lograr este objetivo, adoptamos un enfoque de gobierno corporativo. La estimación de nuestros modelos mediante el método generalizado de los momentos proporciona nueva evidencia empírica. Nuestros resultados revelan que la propiedad familiar influye positivamente en el valor empresarial. No obstante, cuando laconcentración de propiedad en manos de la familia es demasiado elevada, el valor de la compañía disminuye; dando lugar a un relación no lineal entre concentración de propiedad familiar y valor de mercado. Finalmente, demostramos que las empresas familiares obtienen mejores resultados que las no familiares, incluso cuando se tiene en cuenta la mencionada no linealidad. En general, losresultados obtenidos indican que el control familiar de las empresas puede ser beneficioso para los accionistas minoritarios.<br /><br />Given the importance of family firms all over the world, our main objective in this paper is to investigate the relation between ownership concentration and the market value of the company inthe particular case of family firms. Additionally, we study whether family firms outperform nonfamily corporations. To this aim, we adopt a corporate governance approach. The estimation of ourmodels by using the generalized method of moments provides new empirical evidence. Our results show that family ownership impacts positively on firm value. Nevertheless, when ownership concentration in the hands of the family is too high, firm value decreases; thus giving rise to a nonlinear relation between family ownership concentration and firm value. Finally, we find that familyfirms perform better than non-family ones, even when nonlinearities are taken into account. Overall, our findings suggest that family control of corporations may be beneficial to minority shareholders.

scholarly journals Technological innovation management: Case study with enterprises in the peanut-processing sector

2020 ◽  
Vol 26 (50) ◽  
pp. 37-50
Author(s):  
Heitor Depien ◽  
Mário Batalha
Keyword(s):  
Technological Innovation ◽  
Focal Point ◽  
Innovation Management ◽  
Innovation Process ◽  
Theoretical Models ◽  
Analytical Framework ◽  
Business Strategies ◽  
Competitive Strategies ◽  
Management Case Study ◽  
Technological Management

Technological innovations are the basis of the development of new products, production processes, and business formats, contributing decisively to the success of contemporary business strategies. Recognition of the importance of this issue to the development of enterprises and regions has been reflected in an array of studies and theoretical models seeking to improve technological innovation management in organizations. The present study is part of this context. Based on a broad literature review, it uses knowledge about technological innovation management to propose and test a theoretical analytical framework to evaluate and contribute to the improvement of the innovation management process in manufacturing enterprises. The various theoretical constructs used to create the proposed analytical framework address aspects specific to the success of the technological innovation process. Although it is important to deepen the focal point prioritized by the constructs in their analysis, by focusing on specific factors, they can bias the manager’s perspective or hinder a more holistic and complete view of the problem. The proposed framework was tested using three case studies in the peanut agrifood business in the State of São Paulo, Brazil. Main results show that it was capable of capturing the differences in how the studied enterprises carried out technological management. The three companies were classified into one of two groups. The first prioritized process innovation, which responds to direct stimuli from the companies that purchase their product. These companies do not sell directly to end consumers but to other processing companies. The second group privileged product innovation guided by the demands of the final consumer market. The analyses carried out provide data to establish technological management processes adapted to the competitive strategies of the investigated organizations.

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