Abstract
PurposeThis paper aims to examine the influence that family firms’ top management team (TMT) behavior and characteristics exert on their innovation opportunity realization.Design/methodology/approachData were collected through a survey addressed to a representative sample of Italian firms. The analyzed sample consists of 237 firms, 120 of which are family firms. A series of ordinary least squares models were used to test the four hypotheses.FindingsFamily firms realize fewer innovation opportunities than non-family firms. This result is fully mediated by the knowledge exchange in the TMT as follows: in family firms, the TMT exchanges less knowledge than in non-family firms, which drives their lower realization of innovation opportunities. In family firms TMT, the increase in the non-family members positively influences the TMT knowledge exchange, but only when the time the Chief Executive Officer (CEO) spends in searching for innovation opportunities outside the firm is low. The more the CEO search increases, the more this positive influence decreases, up to the point it becomes negative.Research limitations/implicationsThe study contributes to the literature on innovation, knowledge management and organizational design in family firms. Nevertheless, data were collected at a single point in time and in a single country.Practical implicationsThe study suggests family firms on how to foster the realization of innovation opportunities. A greater TMT knowledge exchange allows to realize more innovation opportunities and the TMT characteristics emerged as the drivers of this TMT knowledge exchange. As such, family firms should examine the interaction of their TMT composition in terms of non-family and family members with the effort that the CEO deploys to search for innovation opportunities outside the firm.Originality/valueEmpirical investigation of the link between family ownership, absorptive capacity and innovation performance by considering TMT behavior and characteristics.
Highlights
Knowledge – the relevant and actionable information based on experience and education (Cabrera-Suarez et al, 2001) – allows organizations to be innovative (Nonaka and Takeuchi, 1995)
In this study, we address the following research question: What influence does the top management team (TMT) exert on knowledge management in pursuing innovation opportunity realization? In so doing, we focus on TMT behavior and characteristics, intended as TMT knowledge exchange, TMT composition and the effort deployed by the Chief Executive Officer (CEO) in searching for innovation opportunities outside the firm [1]
Our findings show that TMT composition and CEO search in concert rather than in isolation are determinants of TMT knowledge exchange and, in turn, of innovation opportunity realization (Cao et al, 2010)
Summary
Knowledge – the relevant and actionable information based on experience and education (Cabrera-Suarez et al, 2001) – allows organizations to be innovative (Nonaka and Takeuchi, 1995). Firms have been identified as distinctive for the temporal search of past knowledge that through interiorization and reinterpretation capabilities can be leveraged to innovate (De Massis et al, 2016). It is important for them to acquire and develop new knowledge in the present to innovate. In this regard, scholars interested in family firm innovation have examined the accumulation and recombination of knowledge (Chirico and Salvato, 2008), knowledge internalization in new product development (Chirico and Salvato, 2016) and absorptive capacity (Brinkerink, 2018; Kotlar et al, 2020) – i.e. Paola Rovelli is based at the Centre for Family Business Management of the Faculty of Economics and Management, Libera Universitadi Bolzano, Bolzano, Italy.
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