Abstract
Current literature suggests that family involvement has an impact on firm innovativeness, but it is not able to explain in which conditions. Adopting a curvilinear model, (Olson’s circumplex model of family) this research demonstrates that the family's cohesion and flexibility levels play a significant role in the relationship between family involvement and firm innovation propensity.This paper also provides evidence for the theory that previous research limitations are due to the fact that they posit a linear relationship between family involvement and innovativeness. Instead, the Circumplex curvilinear model shows a better fit for explaining the family involvement impact on innovation propensity.
Highlights
Firms have always shown an ambivalent relationship with innovation dynamics
Organizational literature hasn't yet answered the question: in a family firm, in which conditions does family involvement foster firm innovation propensity? This paper suggests that current literature fails to explain the innovation process because it searches for a direct relationship between family involvement and innovation levels
This paper suggests that an over-involved/flexible and/or insufficiently involved/flexible family in the firm both lead to negative outcomes in innovation propensity
Summary
Firms have always shown an ambivalent relationship with innovation dynamics. Some scholars found a negative relationship between family business and innovation propensity (Block, 2012; Chen, Hsu, 2009; Chrisman, Patel, 2012); others found a positive relationship (Gudmundson et al, 2003; Kim et al, 2008; Llach, Nordqvist, 2010). Literature is still inconclusive and seldom suggests an explanation of the relationship between family involvement and innovation levels On one side, both long-term orientation (Munoz-Bullon et al, 2011; Dieguez-Soto et al, 2016) and social capital could foster the development of new products and processes (Llach, Nordqvist, 2010; Chen, Hsu, 2009; De Massis et al, 2015). An as of yet unanswered question is “if familiness [i.e. the outcome of family-firm overlapping] helps both stabilizing and enriching processes, but these have opposite effects on innovation, under what conditions does each process prevail?” (Penney, Combs, 2013, 1422) Given this theoretical scenario, the purpose of this paper is to explore how and to what extent
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