Importance Of Innovation In Family Business

3 & 4. Research question and objective.

Our first challenge was finding an interrelated theme for family business, that wasn’t too obvious or researched too much already, as we actually want to fill a small knowledge gap with this research. Therefore we choose innovation, because there is a lot of controversy to it about the innovativeness of family businesses. Also, innovation intrigues us very much, as it often determines the succeeding or failing of a company. After brainstorming we came up with the following research question:

“How can we explain that family businesses, in comparison to non-family businesses, tend to be more innovative than is often assumed?”

This question allows us to investigate the strengths of family businesses and

There are several theoretical reasons to believe that technological innovation in family firms is different than in nonfamily firms. Moreover, family firms increasingly make use of technological innovation to overcome economic downturns and to nurture their competitive advantage. However, there is limited information on the effect of family involvement on technological innovation activities and the moderating role of family involvement in the relationship between innovation inputs and the relationship between the innovation activities and outputs. The article has also extended the validity of the most important predictive and interpretative theories in technological innovation with the inclusion of the family involvement

The key elements of their success also include informal sharing of ideas with stakeholders (Zahra, 2012). As a result, family businesses perform as well, and sometimes even outperform, non-family businesses regarding innovation.

This article contributes to our theme by emphasizing closer relationship with stakeholders, long-term strategy, more prudent choice of investment as well as constant concentration on enhancing and innovating production process, as well as defining errors, e.g. family over efficiency.

Article 4. Craig, J.B., Moores, K. (2006) “A 10-Year Longitudinal Investigation of Strategy, Systems, and Environment on Innovation in Family Firms”, Family Business Review, vol. 19, p. 1-10.

Search terms: ‘Family business, innovation’ - Google Scholar - first page, third result. The article was cited 213 times (Google Scholar), which is a lot for rather specific and non popular