Abstract
Innovation management in family firms is a paradoxical challenge. The constant tension between innovation and tradition confers to this topic a fascinating mystery area that calls to action scholarly efforts and further studies to underscore whether family firms are innovating or not. This debate becomes even more intriguing and interesting when family businesses are small-sized and embedded in local contexts strongly attached to traditions and cultures that inhibit change. Based on the curiosity of analyzing the innovation proclivity of small family firms rooted in such a context and building on previous studies that were focused on innovation in family run businesses, we deeply investigated two cases. Findings uncovered a twofold and opposite role of the context:  on the one hand, a constraint and, on the other hand, leverage of innovation. Interesting scholars and practical implications are discussed, and future studies are suggested.
Highlights
Several studies have revealed that family firms are reluctant to introduce innovations that generate change in the business (Sharma & Manikutty, 2005)
Inspired by a recent study (Bettinelli, Sciascia, Randerson, & Fayolle, 2017) we consider the contextual and individual elements as the main exogenous and endogenous drivers that encourage or discourage innovation and entrepreneurial orientation within small family firms. By participating in this ongoing debate, this paper focuses on two exemplary cases of small family firms embedded in a very particular context with the aim of underscore the role that this context plays in managing innovation
Firm A is managed by a ambitious second generation, who is passionate and interested in growing and selling in international markets because the local context is too narrow for their aspirations
Summary
Several studies have revealed that family firms are reluctant to introduce innovations that generate change in the business (Sharma & Manikutty, 2005). Other studies (Kammerlander, Dessì, Bird, Floris, & Murru, 2015) found that innovative spirit can be influenced by the stories told across generations, which affect the way in which family members manage their firm, by tracing innovative or conservative paths. The literature, in this sense, seems to be split into two main branches. Inspired by a recent study (Bettinelli, Sciascia, Randerson, & Fayolle, 2017) we consider the contextual and individual elements as the main exogenous and endogenous drivers that encourage or discourage innovation and entrepreneurial orientation within small family firms
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