Exploring the double-edged sword of familiness from a knowledge-based perspective

Abstract

PurposeFor family businesses, familiness constitutes a unique bundle of resources and capabilities resulting from family relationships and influences. The extant literature has shown that familiness impacts organizational outcomes such as performance and innovation. This paper investigates the role of familiness in relation to absorptive capacity (ACAP). It also explores the specificities of nonfamily members’ social capital when different knowledge management (KM) approaches are adopted.Design/methodology/approachAn exploratory comparative case study design is adopted. Data from three family firms based in the United Arab Emirates (UAE) provide the empirical setting for this study. The data were collected using semi-structured interviews, available documents, observations and company websites.FindingsOur results reveal that the role of familiness in relation to ACAP varies according to the adopted KM approach. Familiness targets the potential ACAP when an explicit KM approach is adopted, the realized ACAP when a tacit KM approach is adopted, and both potential and realized ACAPs when a strategic KM approach is adopted. Our results also show that family firms invest in KM processes that support knowledge exploration and/or exploitation.Originality/valueThis paper provides further evidence for the role of familiness. It moves beyond the study of familiness from a resource-based view and adopts a knowledge-based perspective to develop a better understanding of the role of familiness in relation to ACAP. It also improves our understanding of nonfamily members’ social capital in family firms.