Processes of transferring, interacting, sharing and converting knowledge are of crucial importance in any firm due to their influence on innovations. These processes are especially challenging during the family business succession. A theory-building qualitative study was undertaken to extend our understanding of the dynamics of the knowledge transfer process and its effects on the successor's innovativeness. The findings of the in-depth analysis of 10 family SMEs show that tacit knowledge transferred from a founder to a successor is important but not sufficient for enhancing the successor's innovativeness. It should be combined with the knowledge gained outside the family business. Several propositions were developed that provide basis for future confirmatory research and have implications for practice by providing useful findings to key stakeholders in family businesses as well as to professionals dealing with innovativenness, knowledge transfer and creation in family businesses.

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The family business's tacit knowledge, embedded in its founder, and its transmission is found to be important for building and sustaining competitive advantage since this type of knowledge is difficult to trade and imitate, scarce, appropriable and specialized. The purpose of our research was to broadening our understanding of family businesses tacit knowledge and its creation during the succession process by applying the concept of knowledge creation through so called SECI process. The case study-based findings showed that founders and successors find mentoring, internal/individual training, and involving in the meetings with business partners as the most used knowledge creating activities. We suggest that tacit knowledge creation during succession should be placed in broader context of organizational knowledge creation in order to raise the total quality of successor's knowledge and adding new knowledge thus contributing to building family business's competitive advantage.

This contribution aims to broaden our understanding of factors affecting innovativeness of successors in family businesses in transition economies. In-depth literature review was conducted and three main constructs were identified as having considerable impact on successors' innovativeness and that are: entrepreneurialism, knowledge transfer and creation, and social capital. We applied a multiple-case study approach and the main research findings of ten cases of Slovenian family businesses are discussed. We developed six propositions that provide a basis for further empirical testing of factor influencing successors' innovativeness and innovation ability of family businesses in transition economies.

Family businesses (FB) are important in the most of national economies. We explored whether successors' innovativeness is positively associated with the transfer of the founders' innovativeness through knowledge transfer and creation processes in a form of the internal transfer of founders' tacit and experiential knowledge and skills and with the external transfer of knowledge, when potential successors attend educational programs, external training, or gain working experience in other companies. Our research reveals that when the actual forms of internal knowledge transfer are discussed, the positive correlations exist between innovativeness of successors and their early inclusion into FB, apprenticeship, inclusion of successors into meetings with business partners and strategic planning before they get involved in FB. Our survey partially confirmed that regarding external transfer of knowledge, working experiences of successors in other companies and participation in academic courses are positively associated with their innovativeness.