Purpose Business model innovation (BMI) is the logic of participating in creating and presenting new value. Value creation in family firms is related to generations. There is little research on how to create new value with the capabilities of two generations. Despite the gap in knowledge, the conceptual framework of two-generational value creations of family firms is explained. The purpose of this study is to expand the findings of family business, focusing on the prerequisites, process and consequences of two-generation value creation and analyzing relationship between value creation and the role of G1 and G2. Design/methodology/approach The authors used multiple case study method by five firms with 13 semistructured interviews with first generation (G1), second generation (G2) and experts. First, the interview protocol was designed based on literature study, the interview was conducted and the resulting data was analyzed using coding methods. The results were explained in a framework. Findings Research findings indicate that the entry of G2 and effective communication between two generations are important in value creation. Using G2’s and expert social and human capital resources, creating an innovative vision and culture, fostering motivation and risk-taking, encouraging structures and systems, applying and accepting G2’s ideas and using learning and knowledge management are recognized as key background factors. Creating new value occurs with capabilities of G2 and experts in searching, ideation and creating. The role of G1 is to coordinate, manage, allocate resources, invest in and support new projects; effectively manage resources and risk; as well as cooperate with G2 and experts in creating and providing new value to the customer. G2 plays a key role in finding and launching ideas with a team of experts. The change is implemented with technical capabilities of G2 and the management capabilities of G1. Research limitations/implications Research on BMI enriches because it deals with the relationship between value creation and capabilities of two generations and explains the role of firm’s background factors. By defining the roles of G1 and G2 in value creation and putting together the driving and hindering factors of change, this study contributes to the literature on family business and entrepreneurship research. Practical implications The results help family business managers to understand how they can maximize results in innovation by promoting synergies between generations. So, this research expands knowledge in family business by focusing on the internal factors of firm in creating two-generational value. From practical point of view, the results of research are important tool for family firms. Therefore, research helps family firm executives to understand how they can maximize results in innovation by promoting synergy between generations. Originality/value This research explained background, process and consequences of two-generational value creation in family firms and some obstacles faced by family businesses, based on case study analysis, and provided a conceptual framework. The results analyzed the capabilities of two generations in value creation. The relationship between the capabilities of G1 and G2 and the role of generations in value creation are explained. The mechanisms explained, G1 and G2 affect value creation, as a result explained the two-generational value creation in the family firm and discussed the value creation of two generations. In this research, the analysis of background factors, process by the capabilities of two generations and the role of G1 and G2 in innovation and results are discussed. The relationship between cG1 and G2’s capabilities and the role of value creation are explained, with a focus on the firm’s internal factors that contribute to two-generational value creation.
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