Business model innovation in family firms: dynamic capabilities and the moderating role of socioemotional wealth

Abstract

Today’s dynamic environment demands firms to adapt their business models as a new source of competitive advantage. This poses significant challenges to firms that are locked in their long-established structures, like family firms. We quantitatively test (n = 154) how dynamic capabilities (DC) affect business model innovation (BMI) in family firms and how this relationship is moderated by socioemotional wealth (SEW). DCs are essential for all types of firms to exploit opportunities and respond to technological changes in general. For family firms, they are particular important due to the desire to succeed for future generations. Given that family involvement in business creates idiosyncratic motivations and long-term characteristics that considerably affect the firm’s behavior, we state that their SEW endowment may influence the relationship between DCs and BMI. Measuring the constructs independently, our findings reveal strong sensing and seizing as well as transforming capabilities as relevant antecedents of BMI and stress upon the positive moderating role of SEW for the relationship between reflecting and BMI.