Disentangling the family firm’s innovation process: A systematic review

Broad Search, Deep Search, and the Absorptive Capacity Performance of Family and Nonfamily Firm R&D

“…The findings of hierarchical regression analyses on a sample of Dutch manufacturing SMEs suggest that, in line with earlier findings (e.g., Duran et al, 2016;Matzler et al, 2015), the direct innovation input performance of R&D-that is, the "first face" of R&D as per Cohen and Levinthal (1989)-is indeed stronger for family versus nonfamily firms. Interestingly, however, the theoretical arguments suggested that this innovation input performance surplus of family firm R&D should particularly pertain to the development of exploitative innovations that allow family firms to leverage their superior knowledge retention and rejuvenation capabilities (e.g., Chirico & Salvato, 2008, 2016Patel & Fiet, 2011). However, also a smaller-yet not significantly different-family R&D input performance surplus was found regarding the development of exploratory innovations.…”

“…The latter contingency considerations provide an interesting angle from which to approach the absorptive capacity of family and nonfamily firms, as family influence has well-established implications for the power relationships within the firm (e.g., Carney, 2005;Ensley & Pearson, 2005;Schulze, Lubatkin, Dino, & Buchholtz, 2001) and between the firm and its external partners (e.g., Arrègle, Hitt, Sirmon, & Very, 2007;Gómez-Mejía, Haynes, Nunez-Nickel, Jacobson, & Moyano-Fuentes, 2007;Kotlar, De Massis, Frattini, Bianchi, & Fang, 2013;Lambrechts et al, 2017;Roessl, 2005), as well as for the internal social structure of businesses (e.g., Arrègle et al, 2007;Danes, Stafford, Haynes, & Amarapurkar, 2009;Dyer, 1988;Pearson, Carr, & Shaw, 2008;Tagiuri & Davis, 1996). The differences in social and power structures resulting from family involvement in turn are likely to affect whether and how knowledge enters, flows through, and is transformed within a firm (Chirico & Salvato, 2008, 2016Cunningham, Seaman, & McGuire, 2017;Zahra, Neubaum, & Larrañeta, 2007), and hence, the degree to which family influence will be detrimental or beneficial in bridging the gap between a firm's potential and realized absorptive capacity (Andersén, 2015). These arguments will be further developed in the hypothesis section, in which the impact of family influence on both the innovation input performance and the absorptive capacity performance of R&D will be scrutinized in light of the exploratory and exploitative innovation processes discussed above.…”

“…Family firms may be better positioned to engage in effective deep internal search and creatively recombine new and existing knowledge assets (e.g., Chirico & Salvato, 2008, 2016De Massis, Kotlar, Frattini, Petruzelli, & Wright, 2016;Patel & Fiet, 2011). First, longer tenures and a lower turnover of pivotal organizational members in family firms, and the strong internal social capital developed among those people, should foster the efficient integration of internally developed specialized knowledge (Chirico & Salvato, 2008, 2016Ensley & Pearson, 2005;Pearson et al, 2008). Second, the shared emotional attachment to their firm, and greater concern for the well-being and success of future generations of organizational incumbents should enhance family firm members' motivation to effectively transfer their tacit knowledge across time and people (e.g., Cabrera-Suarez, De Saa-Perez, & Garcia-Almeida, 2001; Jaskiewicz, Uhlenbruck, Balkin, & Reay, 2013).…”

“…Arrègle et al (2007) discuss how the ties between a family firm and its external stakeholders gain additional strength through the link between the family's and the firm's social capital. In parallel to the intraorganizational knowledge structure as discussed with regard to the "closed innovation" performance of R&D (Chirico & Salvato, 2008, 2016, also many of the interorganizational knowledge activities of family firms are based on stakeholder relationships that are deeply embedded in the owning family and its individual members (Arrègle et al, 2007). This family-embeddedness of stakeholder relationships should further increase the level of mutual familiarity with collaboration partners' processes and technologies that is of critical importance for the successful codevelopment of efficiency-oriented exploitative innovations.…”

Family Influence and R&D Spending in Dutch Manufacturing SMEs: The Role of Identity and Socioemotional Decision Considerations

“…An increasingly influential stream of research discusses the role of family influence in a range of innovation processes (De Massis, Frattini, and Lichtenthaler, ; Röd, ). Family firms—that is, those businesses in which members of a single family exercise substantial influence on strategic decisions (Miller, Le Breton‐Miller, Lester, and Cannella, )—differ from other firms regarding, for instance, their engagement in collaborative innovation activities (Classen, Van Gils, Bammens, and Carree, ; Nieto, Santamaria, and Fernández, ), the types of innovation outcomes targeted (Block, Miller, Jaskiewicz, and Spiegel, ), and the allocation of financial resources to research and development (R&D) (Chrisman and Patel, ; Gómez‐Mejía et al, ; Sciascia, Nordqvist, Mazzola, and De Massis, ).…”