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Understanding family firm innovation heterogeneity: A typology of family governance and socioemotional wealth intentions

Zonghui Li (Department of Management and Information Systems, Mississippi State University, Starkville, Mississippi, USA)
Joshua J. Daspit (Department of Management and Information Systems, Mississippi State University, Starkville, Mississippi, USA)

Journal of Family Business Management

ISSN: 2043-6238

Article publication date: 11 July 2016

2469

Abstract

Purpose

In family business studies, inconsistent findings exist regarding the relationship between family involvement and firm innovation. The purpose of this paper is to understand the heterogeneity of family firm innovation.

Design/methodology/approach

The authors draw on governance literature and the socioemotional wealth (SEW) perspective to examine how the extent of family governance and the type of SEW objectives jointly influence innovation strategies in family firms.

Findings

The authors develop a typology of family firm innovation strategies, positing that the family firm’s risk orientation, innovation goal, and knowledge diversity vary depending on the degree of family involvement in governance and the type of SEW objective. The authors propose that four family firm innovation strategies (e.g. Limited Innovators, Intended Innovators, Potential Innovators, and Active Innovators) emerge when family involvement in the dominant coalition (high or low) is contrasted with the SEW objective (restricted or extended) pursued by the family.

Practical implications

Understanding how governance and SEW goals work together to influence the firm’s innovation strategies is potentially valuable for managers of family firms. The authors offer practical suggestions for how to strategically reposition the firm to pursue innovation strategies more in line with those of the Active Innovator.

Originality/value

This study contributes to the family business literature by using a multi-dimensional approach to examine family firm heterogeneity. In addition, by articulating various family firm innovation strategies, the authors offer insight into the previously inconsistent findings concerning firm innovation behavior and outcomes in family business studies.

Keywords

Citation

Li, Z. and Daspit, J.J. (2016), "Understanding family firm innovation heterogeneity: A typology of family governance and socioemotional wealth intentions", Journal of Family Business Management, Vol. 6 No. 2, pp. 103-121. https://doi.org/10.1108/JFBM-02-2015-0010

Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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