Family firms’ innovation drivers and performance: a dynamic capabilities approach

Abstract

Purpose Entrepreneurial innovation has been the most important source for improvement in firm performance. Innovation in family firms has become the focal issue in firm strategy. In today’s high-velocity environment, the dynamic organizational adaptation is essential for sustainable competitive advantage. The purpose of this paper is to investigate the nature of changes in external environment and the relationship between changes in the economic environment and family firms’ innovation in response to the environmental shift. Design/methodology/approach The authors designed a survey questionnaire to obtain primary data for the study. The survey consists of family firm structure, innovation drivers, governance, core competence and performance. Authors applied a random stratified sample method in selecting samples to reflect the population in family firms. Findings The study identified market conditions, technology and regulation as innovation drivers. The authors found that these innovation drivers have positive effects on family firm performance, although the technology variable is the only statistically significant variable at the conventional statistical significance level. Research limitations/implications The authors expected to have better response rate, and wish to have more observations. The authors would have stronger results if you could get more data. Practical implications Family firms need to respond to the high velocity of environment and to develop capabilities that understand the nature of changes in economic environment and take effective steps. The study findings offer guidelines for the managers of how to manage the firms in the dynamic environment. Social implications Family firms should use this results to develop strategies to deal with various economics situations. Originality/value The study identifies innovation drivers in family firms. The study contributes to finding and empirical testing of family firm innovation drivers. Findings of the study are valuable for managing the high velocity of today’s economic environment: changes in markets, technologies and regulations.

Strategic management in family business. The missing concept of the familiness learning mechanism

“…Consequently, this article aims to empirically test the concept of the familiness learning mechanism in an effort to address the paucity of empirical studies and so analyze dynamic capabilities in family businesses (Park et al, 2019). To operationalize the concept in the context of family firms, we use the factor analysis technique and a second-generation technique, partial least squares structural equation modeling (PLS-SEM).…”

Strengthening digital ecosystem for SMEs through readiness to change and agile leadership

“…Furthermore, Oliva et al (2018) measured dynamic capabilities by integration of individuals' expertise in the organization; culture, orientation and leadership; and corporate strategies. The other dimensions are markets, technologies and regulations (Park et al, 2018) sensing, seizing, transforming (Tallott & Hilliard, 2016) the ability to identify and explore emerging opportunities and new sources of competitive advantages (Bamel & Bamel, 2018;Schilke et al, 2018) sensing, learning, integrating, and coordinating capability (Hernández-Linares et al, 2021) strong coordination, and competitive response to the rivals (Rehman & Saeed, 2018).…”

“…According to the research by Gnizy et al (2014), dynamic capabilities affect the success factors of SMEs, one of which is to go digital. Further research by Park et al (2018) showed that dynamic capabilities as measured by market conditions, technology and regulation that affect company performance in driving digital business (Oliva et al, 2018;Rialti et al, 2019;Tallott & Hilliard, 2016). Thus, the hypothesis is formulated as follows: H3: The higher the dynamic capabilities of SMEs, the higher the digital ecosystem.…”

Dynamic Capabilities for SME’s: Ready to Change and Cloud Service Role Toward Digital Business

“…While Oliva et al (2018) measured dynamic capability by the integration of individuals' expertise in the organization, culture, orientation and leadership, and corporate strategies. Other dimensions are markets, technologies, and regulations (Park et al, 2018). Whereas sensing, seizing, transforming were measured by Tallott & Hilliard (2016).…”