Abstract
This chapter complements the analysis of the idiosyncratic features of family firms developed in Chap. 2 by leveraging innovation literature, in an effort to provide a comprehensive, integrative review of existing research on the topic. This chapter introduces the role and characteristics of technological innovation within contemporary firms, as well as the links among technological innovation, value creation, competitive advantage, and firm survival. Starting from this framework, it maps the most critical decision-making elements associated with the management of technological innovation by family firms. The comparison of several, often divergent viewpoints from different streams of literature produces a systematic account of theories and empirical findings pertaining to the management of innovation in family firms.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Anderson, R. C., Duru, A., & Reeb, D. M. (2012). Investment policy in family controlled firms. Journal of Banking & Finance, 36(6), 1744–1758.
Ashwin, A. S., Krishnan, R. T., & George, R. (2015). Family firms in India: Family involvement, innovation and agency and stewardship behaviors. Asia Pacific Journal of Management, 32(4), 869–900.
Bammens, Y., Notelaers, G., & Van Gils, A. (2015). Implications of family business employment for employees’ innovative work involvement. Family Business Review, 28(2), 123–144.
Banno, M. (2016). Propensity to patent by family firms. Journal of Family Business Strategy, 7(4), 238–248.
Basco, R., & Calabro, A. (2016). Open innovation search strategies in family and non-family SMEs evidence from a natural resource-based cluster in Chile. Academia-Revista Latinoamericana de Administracion, 29(3), 279–302.
Beck, L., Janssens, W., Debruyne, M., & Lommelen, T. (2011). A study of the relationships between generation, market orientation, and innovation in family firms. Family Business Review, 24(3), 252–272.
Berk, J. B., Stanton, R., & Zechner, J. (2010). Human capital, bankruptcy, and capital structure. The Journal of Finance, 65(3), 891–926.
Bennedsen, M., & Foss, N. (2015). Family assets and liabilities in the innovation process. California Management Review, 58(1), 65–81.
Berrone, P., Cruz, C., Gomez-Mejia, L. R., & Larraza-kintana, M. (2010). Socioemotional wealth and corporate responses to institutional pressures: Do family-controlled firms pollute less? Administrative Science Quarterly, 55(1), 82–113.
Block, J. H. (2012). R&D investments in family and founder firms: An agency perspective. Journal of Business Venturing, 27(2), 248–265.
Block, J., Miller, D., Jaskiewicz, P., & Spiegel, F. (2013). Economic and technological importance of innovations in large family and founder firms: An analysis of patent data. Family Business Review, 26(2), 180–199.
Block, J. H., & Spiegel, F. (2013). Family firm density and regional innovation output: An exploratory analysis. Journal of Family Business Strategy, 4(4), 270–280.
Broekaert, W., Andries, P., & Debackere, K. (2016). Innovation processes in family firms: The relevance of organizational flexibility. Small Business Economics, 47(3), 771–785.
Bushee, B. J. (1998). The influence of institutional investors on myopic R&D investment behavior. Accounting Review, 73(3), 305–333.
Carnes, C. M., & Ireland, R. D. (2013). Familiness and innovation: Resource bundling as the missing link. Entrepreneurship Theory and Practice, 37(6), 1399–1419.
Chen, H. L., & Hsu, W. T. (2009). Family ownership, board independence, and R&D investment. Family Business Review, 22(4), 347–362.
Chin, C. L., Chen, Y. J., Kleinman, G., & Lee, P. (2009). Corporate ownership structure and innovation: Evidence from Taiwan’s electronics industry. Journal of Accounting, Auditing & Finance, 24(1), 145–175.
Choi, S. B., Park, B. I., & Hong, P. (2012). Does ownership structure matter for firm technological innovation performance? The case of Korean firms. Corporate Governance: An International Review, 20(3), 267–288.
Chrisman, J. J., & Patel, P. C. (2012). Variations in R&D investments of family and nonfamily firms: Behavioral agency and myopic loss aversion perspectives. Academy of Management Journal, 55(4), 976–997.
Chrisman, J. J., Chua, J. H., De Massis, A., Frattini, F., & Wright, M. (2015a). The ability and willingness paradox in family firm innovation. Journal of Product Innovation Management, 32(3), 310–318.
Chrisman, J. J., Fang, H. Q., Kotlar, J., & De Massis, A. (2015b). A note on family influence and the adoption of discontinuous technologies in family firms. Journal of Product Innovation Management, 32(3), 384–388.
Christensen, C. (1997). The innovator’s dilemma: When new technologies cause great firms to fall. Boston, MA: Harvard Business School Press.
Classen, N., Carree, M., Van Gils, A., & Peters, B. (2014). Innovation in family and non-family SMEs: An exploratory analysis. Small Business Economics, 42(3), 595–609.
Corbetta, G., & Salvato, C. A. (2004). The board of directors in family firms: one size fits all? Family Business Review, 17(2), 119–134.
Coriat, B., & Weinstein, O. (2002). Organizations, firms and institutions in the generation of innovation. Research Policy, 31(2), 273–290.
Covin, J. G., Eggers, F., Kraus, S., Cheng, C. F., & Chang, M. L. (2016). Marketing-related resources and radical innovativeness in family and non-family firms: A configurational approach. Journal of Business Research, 69(12), 5620–5627.
Craig, J. B., Pohjola, M., Kraus, S., & Jensen, S. H. (2014). Exploring relationships among proactiveness, risk-taking and innovation output in family and non-family firms. Creativity and Innovation Management, 23(2), 199–210.
Craig, J. B. L., & Moores, K. (2006). A 10-year longitudinal investigation of strategy, systems, and environment on innovation in family firms. Family Business Review, 19(1), 1–10.
Cucculelli, M., Le Breton-Miller, I., & Miller, D. (2016). Product innovation, firm renewal and family governance. Journal of Family Business Strategy, 7(2), 90–104.
Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22(1), 20–47.
De Clercq, D., & Belausteguigoitia, I. (2015). Intergenerational strategy involvement and family firms’ innovation pursuits: The critical roles of conflict management and social capital. Journal of Family Business Strategy, 6(3), 178–189.
De Massis, A., Di Minin, A., & Frattini, F. (2015a). Family-driven innovation: Resolving the paradox in family firms. California Management Review, 58(1), 5–19.
De Massis, A., Frattini, F., Pizzurno, E., & Cassia, L. (2015b). Product innovation in family versus nonfamily firms: An exploratory analysis. Journal of Small Business Management, 53(1), 1–36.
De Massis, A., Frattini, F., Kotlar, J., Petruzzelli, A. M., & Wright, M. (2016a). Innovation through tradition: Lessons from innovative family businesses and directions for future research. Academy of Management Perspectives, 30(1), 93–116.
De Massis, A., Kotlar, J., Frattini, F., Chrisman, J. J., & Nordqvist, M. (2016b). Family governance at work: Organizing for new product development in family SMEs. Family Business Review, 29(2), 189–213.
Dieguez-Soto, J., Manzaneque, M., & Rojo-Ramirez, A. A. (2016). Technological innovation inputs, outputs, and performance: The moderating role of family involvement in management. Family Business Review, 29(3), 327–346.
Drucker, P. F. (1985). The discipline of innovation. Harvard Business Review, 63(3), 67–72.
Duran, P., Kammerlander, N., Van Essen, M., & Zellweger, T. (2016). Doing more with less: Innovation input and output in family firms. Academy of Management Journal, 59(4), 1224–1264.
Fama, E. F. (1980). Agency problems and the theory of the firm. Journal of Political Economy, 88(2), 288–307.
Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. The Journal of Law and Economics, 26(2), 301–325.
Gomez-Mejia, L. R., Campbell, J. T., Martin, G., Hoskisson, R. E., Makri, M., & Sirmon, D. G. (2014). Socioemotional wealth as a mixed gamble: revisiting family firm R&D investments with the behavioral agency model. Entrepreneurship Theory and Practice, 38(6), 1351–1374.
Gómez-Mejía, L. R., Haynes, K. T., Núñez-Nickel, M., & Monyano-Fuentes, H. (2007). Socioemotional wealth and business risk in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52, 106–137.
Grundstrom, C., Oberg, C., & Ronnback, A. O. (2012). Family-owned manufacturing SMEs and innovativeness: A comparison between within-family successions and external takeovers. Journal of Family Business Strategy, 3(3), 162–173.
Gudmundson, D., Tower, C. B., & Hartman, E. A. (2003). Innovation in small businesses: Culture and ownership structure do matter. Journal of Developmental Entrepreneurship, 8(1), 1–17.
Habbershon, T. G., & Williams, M. L. (1999). A resource-based framework for assessing the strategic advantages of family firms. Family Business Review, 12(1), 1–25.
Hall, P. A., & Soskice, D. (Eds.). (2001). Varieties of capitalism: The institutional foundations of comparative advantage. OUP Oxford.
Hatak, I., Kautonen, T., Fink, M., & Kansikas, J. (2016). Innovativeness and family-firm performance: The moderating effect of family commitment. Technological Forecasting and Social Change, 102, 120–131.
Hauck, J., & Prugl, R. (2015). Innovation activities during intra-family leadership succession in family firms: An empirical study from a socioemotional wealth perspective. Journal of Family Business Strategy, 6(2), 104–118.
Holt, D. T., & Daspit, J. J. (2015). Diagnosing innovation readiness in family firms. California Management Review, 58(1), 82–96.
Hsieh, T. J., Yeh, R. S., & Chen, Y. J. (2010). Business group characteristics and affiliated firm innovation: The case of Taiwan. Industrial Marketing Management, 39(4), 560–570.
Hsu, L. C., & Chang, H. C. (2011). The role of behavioral strategic controls in family firm innovation. Industry and Innovation, 18(7), 709–727.
Ingram, A. E., Lewis, M. W., Barton, S., & Gartner, W. B. (2016). Paradoxes and innovation in family firms: The role of paradoxical thinking. Entrepreneurship Theory and Practice, 40(1), 161–176.
Kammerlander, N., Dessi, C., Bird, M., Floris, M., & Murru, A. (2015). The impact of shared stories on family firm innovation: A multicase study. Family Business Review, 28(4), 332–354.
Kammerlander, N., & Ganter, M. (2015). An attention-based view of family firm adaptation to discontinuous technological change: Exploring the role of family CEOs’ noneconomic goals. Journal of Product Innovation Management, 32(3), 361–383.
Kellermanns, F. W., Eddleston, K. A., Sarathy, R., & Murphy, F. (2012). Innovativeness in family firms: A family influence perspective. Small Business Economics, 38(1), 85–101.
Klang, D., Wallnöfer, M., & Hacklin, F. (2014). The business model paradox: A systematic review and exploration of antecedents. International Journal of Management Reviews, 16(4), 454–478.
Konig, A., Kammerlander, N., & Enders, A. (2013). The family innovator’s dilemma: How family influence affects the adoption of discontinuous technologies by incumbent firms. Academy of Management Review, 38(3), 418–441.
Kotlar, J., De Massis, A., Frattini, F., Bianchi, M., & Fang, H. Q. (2013). Technology acquisition in family and nonfamily firms: A longitudinal analysis of Spanish manufacturing firms. Journal of Product Innovation Management, 30(6), 1073–1088.
Kotlar, J., Fang, H. Q., De Massis, A., & Frattini, F. (2014). Profitability goals, control goals, and the R&D investment decisions of family and nonfamily firms. Journal of Product Innovation Management, 31(6), 1128–1145.
Kraiczy, N. D., Hack, A., & Kellermanns, F. W. (2014). New product portfolio Performance in family firms. Journal of Business Research, 67(6), 1065–1073.
Kraiczy, N. D., Hack, A., & Kellermanns, F. W. (2015). What makes a family firm innovative? CEO risk-taking propensity and the organizational context of family firms. Journal of Product Innovation Management, 32(3), 334–348.
Lawless, M. W., & Anderson, P. C. (1996). Generational technological change: Effects of innovation and local rivalry on performance. Academy of Management Journal, 39(5), 1185–1217.
Lazzarotti, V., & Pellegrini, L. (2015). An explorative study on family firms and open innovation breadth: Do non-family managers make the difference? European Journal of International Management, 9(2), 179–200.
Le Breton-Miller, I., Miller, D., & Lester, R. H. (2011). Stewardship or agency? A social embeddedness reconciliation of conduct and performance in public family businesses. Organization Science, 22(3), 704–721.
Lee, P. M., & O’Neill, H. M. (2003). Ownership structures and R&D investments of US and Japanese firms: Agency and stewardship perspectives. Academy of Management Journal, 46(2), 212–225.
Letonja, M., & Duh, M. (2016). Knowledge transfer in family businesses and its effects on the innovativeness of the next family generation. Knowledge Management Research & Practice, 14(2), 213–224.
Li, Z. H., & Daspit, J. J. (2016). Understanding family firm innovation heterogeneity: A typology of family governance and socioemotional wealth intentions. Journal of Family Business Management, 6(2), 103–121.
Liang, Q., Li, X. C., Yang, X. R., Lin, D. M., & Zheng, D. H. (2013). How does family involvement affect innovation in China? Asia Pacific Journal of Management, 30(3), 677–695.
Lieberman, M. B., & Montgomery, D. B. (1988). First-mover advantages. Strategic Management Journal, 9(S1), 41–58.
Le Breton-Miller, I., & Miller, D. (2009). Agency vs. Stewardship in Public Family Firms: A Social Embeddedness Reconciliation. Entrepreneurship Theory and Practice, 33(6), 1169–1191.
Llach, J., & Nordqvist, M. (2010). Innovation in family and non-family businesses: A resource perspective. International Journal of Entrepreneurial Venturing, 2(3–4), 381–399.
Lodh, S., Nandy, M., & Chen, J. (2014). Innovation and family ownership: Empirical evidence from india. Corporate Governance—An International Review, 22(1), 4–23.
Lopez-Fernandez, M. C., Serrano-Bedia, A. M., & Gomez-Lopez, R. (2016a). Determinants of innovation decision in small and medium-sized family enterprises. Journal of Small Business and Enterprise Development, 23(2), 408–427.
Lopez-Fernandez, M. C., Serrano-Bedia, A. M., & Palma-Ruiz, M. (2016b). What hampers innovation in mexican family firms? Academia-Revista Latinoamericana de Administracion, 29(3), 255–278.
Matzler, K., Veider, V., Hautz, J., & Stadler, C. (2015). The impact of family ownership, management, and governance on innovation. Journal of Product Innovation Management, 32(3), 319–333.
McConaughy, D. L., & Phillips, G. M. (1999). Founders versus descendants: The profitability, efficiency, growth characteristics and financing in large, public, founding-family-controlled firms. Family Business Review, 12(2), 123–131.
Memili, E., Fang, H. C., & Welsh, D. H. B. (2015). Value creation and value appropriation in innovation process in publicly-traded family firms. Management Decision, 53(9), 1921–1952.
Miller, D., & Le Breton-Miller, I. (2005). Managing for the long run: Lessons in competitive advantage from great family businesses. Boston: Harvard Business Press.
Miller, D., Le Breton-Miller, I., Lester, R. H., & Cannella, A. A. (2007). Are family firms really superior performers? Journal of Corporate Finance, 13(5), 829–858.
Miller, D., Wright, M., Le Breton-Miller, I., & Scholes, L. (2015). Resources and innovation in family businesses: The Janus-face of socioemotional preferences. California Management Review, 58(1), 20–40.
Morck, R., & Yeung, B. (2003). Agency problems in large family business groups. Entrepreneurship Theory and Practice, 27(4), 367–382.
Munari, F., Oriani, R., & Sobrero, M. (2010). The Effects of Owner identity and External Governance Systems on R&D Investments: A Study of Western European Firms. Research Policy, 39(8), 1093–1104.
Munoz-Bullon, F., & Sanchez-Bueno, M. J. (2011). The impact of family involvement on the R&D intensity of publicly traded firms. Family Business Review, 24(1), 62–70.
Naldi, L., Nordqvist, M., Sjöberg, K., & Wiklund, J. (2007). Entrepreneurial orientation, risk taking, and performance in family firms. Family Business Review, 20(1), 33–47.
Narayanan, M. P. (1985). Managerial incentives for short-term results. The Journal of Finance, 40(5), 1469–1484.
Newman, A., Prajogo, D., & Atherton, A. (2016). The influence of market orientation on innovation strategies. Journal of Service Theory and Practice, 26(1), 72–90.
Nieto, M. J., Santamaria, L., & Fernandez, Z. (2015). Understanding the innovation behavior of family firms. Journal of Small Business Management, 53(2), 382–399.
Olson, D. H., McCubbin, H. I., Barnes, H., Larsen, A., Muxen, M., & Wilson, M. (1989). Families: What makes them work (2nd ed.). Los Angeles, CA: Sage.
O’Sullivan, M. (2000). The innovative enterprise and corporate governance. Cambridge Journal of Economics, 24, 393–416.
Patel, P. C., & Chrisman, J. J. (2014). Risk abatement as a strategy for R&D investments in family firms. Strategic Management Journal, 35, 617–627.
Penney, C. R., & Combs, J. G. (2013). Insights from family science: The case of innovation. Entrepreneurship Theory and Practice, 37(6), 1421–1427.
Perri, A., & Peruffo, E. (2016). Knowledge spillovers from FDI: A critical review from the international business perspective. International Journal of Management Reviews, 18(1), 3–27.
Sanchez-Famoso, V., Iturralde, T., & Maseda, A. (2015). The influence of family and non-family social capital on firm innovation: Exploring the role of family ownership. European Journal of International Management, 9(2), 240–262.
Schmid, T., Achleitner, A. K., Ampenberger, M., & Kaserer, C. (2014). Family firms and R&D behavior—New evidence from a large-scale survey. Research Policy, 43(1), 233–244.
Schumpeter, J. A. (1934). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle. Cambridge, MA: Harvard University Press.
Sciascia, S., Nordqvist, M., Mazzola, P., & Massis, A. (2015). Family ownership and R&D intensity in small- and medium-sized firms. Journal of Product Innovation Management, 32(3), 349–360.
Singh, D. A., & Gaur, A. S. (2013). Governance structure, innovation and internationalization: Evidence from India. Journal of International Management, 19(3), 300–309.
Sirmon, D. G., Arregle, J. L., Hitt, M. A., & Webb, J. W. (2008). The role of family influence in firms’ strategic responses to threat of imitation. Entrepreneurship Theory and Practice, 32(6), 979–998.
Spriggs, M., Yu, A., Deeds, D., & Sorenson, R. L. (2013). Too many cooks in the kitchen: Innovative capacity, collaborative network orientation, and performance in small family businesses. Family Business Review, 26(1), 32–50.
Steeger, J. H., & Hoffmann, M. (2016). Innovation and family firms: Ability and willingness and German SMEs. Journal of Family Business Management, 6(3), 251–269.
Strutzenberger, A., & Ambos, T. C. (2014). Unravelling the subsidiary initiative process: A multilevel approach. International Journal of Management Reviews, 16(3), 314–339.
Teece, D. J. (1986). Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research Policy, 15(6), 285–305.
Tsao, S. M., & Lien, W. H. (2013). Family management and internationalization: The impact on firm performance and innovation. Management International Review, 53(2), 189–213.
Thomsen, S., & Pedersen, T. (2000). Ownership structure and economic performance in the largest European companies. Strategic Management Journal, 21(6), 689–705.
Tylecote, A., & Ramirez, P. (2006). Corporate governance and innovation: The UK compared with the US and ‘insider’ economies. Research Policy, 35(1), 160–180.
Veider, V., & Matzler, K. (2016). The ability and willingness of family-controlled firms to arrive at organizational ambidexterity. Journal of Family Business Strategy, 7(2), 105–116.
Yoo, T., & Sung, T. (2015). How outside directors facilitate corporate R&D investment? Evidence from large Korean firms. Journal of Business Research, 68(6), 1251–1260.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2017 The Author(s)
About this chapter
Cite this chapter
Perri, A. (2017). Innovation in Family Firms: Critical Review of Theoretical and Empirical Literature. In: Family Business and Technological Innovation. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-61596-7_3
Download citation
DOI: https://doi.org/10.1007/978-3-319-61596-7_3
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-61595-0
Online ISBN: 978-3-319-61596-7
eBook Packages: Business and ManagementBusiness and Management (R0)