Managing Knowledge Resources in Family Firms: Opportunity or Challenge?

Abstract

The purpose of this study was to explore the specificities of the relationship between knowledge management (KM) processes and the potential and realized absorptive capacities in the context of a knowledge-based view. The paper advances our understanding of the contributions of knowledge management processes and the potential and realized absorptive capacities in small- and medium-sized family firms. We draw on case studies of two small- and medium-sized family businesses operating in different industries. Our results show that the choice of the KM approach and the family business characteristics determine the extent to which a family firm is successful in managing its knowledge processes and absorptive capacity. Moreover, the results indicate that family businesses are impacted by their own characteristics, such as the fact that they do not dissociate between the personalities of the owners and the business, and are context-specific. Since the focus of this research was limited to KM processes and absorptive capacity, it would be beneficial for future research to investigate the mechanisms that enable firms to manage their potential and realized absorptive capacities and the extent to which they generate dynamic capabilities through KM processes. Further studies of the impacts of family business characteristics on the firm’s success in managing knowledge resources are also recommended.