Dynamic Capability Acquisition for Family Managed Businesses: A Case of Microlit

Abstract

Innovation in organizations is not the exclusive domain of public and widely-held companies. Family-owned and managed have sharply integrated innovation and customer-focused product engineering. Focused orientation towards product innovation, combined with innovative capability and high levels of owner-manager motivation, can translate technology based family businesses, as highly profitable and competitive ventures.The nurturing and acquisition of dynamic capabilities by closely held family businesses is an area of research that is not deeply understood, and this case study seeks to identify, quantify and enumerate factors and parameters that are crucial to the acquisition of such capabilities by family owned and managed businesses.MICROLIT is a liquid handling product manufacturer based in Lucknow, India. It is the maker of high-quality, high-tech, and cost-effective, single and multichannel micropipettes, tips, electronic micropipettes, stands, and has recently ventures into the design and manufacture of bottle top dispensers.The primary end-users of MICROLIT’s products are medical and non-medical testing labs, government and private organizations that extensively employ micropipettes in their various processes.The organization was founded in 1986, by brothers Ajay and Atul Jain. Ajay is an engineering graduate of the prestigious Indian Institute of Technology, India, and Atul holds an M.Sc in Chemistry. The first venture for the duo was to serve as agents for European manufacturers of micropipettes, in India. Serving the needs of major governmental and medical establishments, the brothers envisioned a growing need for such devices in the Indian market.With growth, came the nurturing of dynamic capabilities. As their services began to reach market saturation, the brothers sought to venture into manufacturing. After a technology-sharing contract with a foreign manufacturer fell through at the last moment, the entrepreneurial due decided to venture into manufacturing, with no external support or funding.Leveraging their technical academic backgrounds, the owner-manager duo managed to dynamically generate the manufacturing capabilities in-house, and after careful study of the liquid transport systems market, has created a range of products that cover the entire market. By 1991, the firm had launched their own line of patented products, and by 1997, became a fully export-oriented company.MICROLIT serves the equipment and OEM needs to companies and organizations in 65 nations, and holds a large market share in the manufacture of liquid transport systems. The key contributors to the company’s success have been strong customer-oriented product designs, and an ability to develop and refine dynamic capabilities that allow for the creation of competence in previously un-encountered areas and platforms. Incorporating market feedback into product design allows the company to keep abreast of evolving client needs and emerging technologies.In this case, we aim to look at how closely held family businesses may develop dynamic capabilities, that allow them to rapidly gain competence in new strategic dimensions. We postulate that innovation and business process reengineering are not the exclusive domain of large corporations, but can be leveraged by family owned and managed businesses for gains that may rival or exceed professionally managed organizations. The creation of intellectual property by entrepreneurs is also closely looked at, as the company holds numerous patents to its name.We also take a close look at the decision making process in a medium sized manufacturing firm, and how decision making is allocated, based on individuals’ core competencies.