Resource Configuration in Family Firms: Linking Resources, Strategic Planning and Technological Opportunities to Performance

Abstract

We apply the resource-based view of the firm to the study of family firms by investigating how a family specific resource (reciprocal altruism) and a firm specific resource (innovative capacity) contribute to family firm performance. We then examine how the impact of these resources is moderated by strategic planning and technological opportunities. Our findings suggest that family firms can benefit from emphasizing the positive aspects of kinship and from developing innovative capacities. As such, we demonstrate that not only do firm specific resources contribute to family firm performance, but also that family relationships can be a source of competitive advantage for a family firm. In addition, we found a heightened importance of reciprocal altruism in environments rich in technological opportunities, and that strategic planning is more important for those family firms that lack innovative capacities. Copyright Blackwell Publishing Ltd 2007.

Disentangling antecedents and performance effects of family SME innovation: A knowledge-based perspective

“…Knowledge Internalization measured the ability of family members to recognize, incorporate and make collective use of each other's individual knowledge (Chirico and Salvato 2016). Technological Opportunities assessed the impact of perceived technological opportunities within the firm's major industry (Eddleston et al 2008;Zahra 1996). Interorganizational Collaboration asked the respondents to indicate the extent to which their firms pursued different forms of collaborations with other firms in the previous three years.…”

“…This construct is closely related to the paradigm of open innovation (Chesbrough 2006) as Ba paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology^(p. 1). Such collectivistic firm cultures as well as cooperative approaches toward external partners can contribute considerably to a successful exploitation of opportunities to sustain competition (Eddleston et al 2008;Hollen et al 2013;Faems et al 2005).…”

“…Two main sources of knowledge are recognized: industry sources such as suppliers, competitors or customers and non-industry sources, contributed by the academic community (Klevorick et al 1995). While industries low in TO possess restricted opportunities for growth through commitment to R&D and innovation activities, environments rich in TO are characterized by swiftly changing demand and customers, frequent new product introductions, dynamic market entries and exits as well as profound shifts in market shares (Eddleston et al 2008;Zahra 1996).…”

“…Therefore, firms established in industries with a high stock of existing external knowledge are found to have greater incentives for large R&D investments and innovation since such an environment fosters the exploration of opportunities (VegaJurado et al 2008). According to Eddleston et al (2008), environments rich in TO require even greater and continuous investment in a firm's capabilities to sustain competition. The capabilities to innovate are particularly important in this context since they foster venturing activities and thus innovation (Sirmon and Hitt 2003).…”

“…Prior research has shown that family firms may compete successfully in technologically rich environments and, more importantly, that the family and its knowledge are a fundamental resource for this success (Eddleston et al 2008;Basco 2014;Diéguez-Soto et al 2016;Llach et al 2012). However, research to date has neglected to provide a deeper understanding of how family-specific resources Baffect their propensity toward technological innovation and, more generally, their business behavior in technological innovation^ (De Massis et al 2013, p. 21).…”