Blood Is Thicker Than Water: The Role of Family Willingness and Family Ability in Achieving Holistic Digitalisation in Family Businesses

Abstract

Recently, studies have highlighted the importance of a holistic digitalisation that incorporates process digitalisation, product digitalisation as well as digital transformation involving redefinitions of business models and organisational identities. Whereas previous studies either aimed for generalisability across firms, or investigated digital transformation projects in particular industries, only very few studies investigated the particularities of family businesses (i.e., family influence) in the digitalisation context. Based on a unique dataset of 164 German family firms, our study sheds light on the role of family ability and family willingness for holistic digitalisation. Our results show that product digitalisation is statistically independent from family influence. Whereas process digitalisation benefits only from family ability, digital tranformation is bound to the families’ willingness to pursue the transformation.

Introduction to the Research Handbook on Entrepreneurship and Innovation in Family Firms

“…We are facing fast-changing and uncertain times in which family firms must deal with significant challenges and threats in order to remain competitive. Prominent examples such as digitalization (Ceipek et al, 2021;Soluk et al, 2021;Heider et al, 2022), sustainability (Adomako et al, 2019;Clauß et al, 2022;Nikolakis et al, 2022), or the many global crises (Kraus et al, 2020;Breier et al, 2021) require family firms to continually reflect upon and potentially renew their business.…”

Digital Τransformation in Family Businesses: A Systematic Literature Review and Research Agenda

“…The quest for preserving SEW will often lead to FFs' more risk-averse management attitudes (Basly and Hammouda, 2020). While not all FFs are highly risk-averse, many struggle with finding the right balance between risk-taking and preserving their identity, tradition, and legacy (Heider et al, 2022). Basly and Hammouda (2020) also argue that even the relationship between the presence of an external CEO and the family will be influenced by the levels of risk tolerance, leading to a narrower view of DT project investment and implementation.…”

“…As family owners frequently rely exclusively on the FF for sustainable revenues and profits for the family income, stability is often preferred over aggressive growth (König et al, 2013). The totality of the DT process requires a commitment to change and exploration, and therefore FF owners often tend to stay within the boundaries of the early efficiency improvement stages of DT (Kathuria et al, 2023), thus reducing the scope of the transformation (Heider et al, 2022).…”

“…The decision-making of FFs is often driven by a general reluctance to lose control and a preference to retain traditional management concepts (Ano and Bent, 2022). This fact certainly has a profound impact on DT, considering the disruptive nature of the process (DeGroote et al, 2023;Heider et al, 2022). To retain control and protect their SEW, families often steer away from risky projects, such as exploratory digital technologies (Ceipek et al, 2021), preferring stability over change and slow evolution over disruption (Basly and Hammouda, 2020).…”

“…The authors also point out the need for expansion on the concept of SEW and the non-economic goals of the family (Pruegl and Spitzley, 2021) as means of exploring the willingness of the family to engage in a DT path. Heider et al (2022) propose the further breakdown of ability and willingness in FFs into subdimensions and the assessment of the impact of these on DT. recognize the need for further research on how family members perceive risk and the impact of the perception on digital business models.…”