Family Firms and Innovation from Founder to Successor

Abstract

Several empirical investigations indicate that family firms are more innovative under the founding generation’s leadership and become less innovative in later stages, while others state the opposite. Within this debate, limited attention has been devoted to understanding how intra-family succession might be an opportunity to maintain or improve family firms’ innovativeness. This paper aims to explore how family firms’ innovativeness may evolve from the first to the second generation and understand which conditions may favour or hamper this change. A qualitative approach based on a multiple case study was adopted, conducting seven face-to-face semi-structured interviews with founders and successors that formed the basis of four case studies. The results reveal four different dynamics that characterise how a first-generation family firm’s innovation capacities are or are not passed on to the second generation: decline, transformation, consolidation and preservation. Findings also show that these dynamics depend on the founders and successors’ approaches towards innovation. To better depict differences between them, we propose a typology of founders (lone innovator, collaborative innovator and orchestrator innovator) and successors (prodigal son, game changer, talent scout, faithful disciple) and explain how they influence the evolution of innovation from the founder generation to the next.

Business process innovations in family firms: evidence from Serbia

“…, 2007; Cailluet et al. , 2018), yet there is a great deal of controversy in theory and practice (Cesaroni et al. , 2021; Miller and Le Breton-Miller, 2021).…”

“…There is a relationship between innovation capabilities and socioemotional dimensions in family firms (Fitz-Koch and Nordqvist, 2017). The analysis of innovation in family firms is not only related to research and development and technological innovation, but also focused on all activities that enable firms to define and develop new products, services, and processes (Cesaroni et al. , 2021).…”

“…There are also studies showing that innovation is important in both family and non-family firms. The literature in the field of economics increasingly points out to the importance of family firms in terms of economic development (Bennedsen et al, 2007;Cailluet et al, 2018), yet there is a great deal of controversy in theory and practice (Cesaroni et al, 2021;Miller and Le Breton-Miller, 2021).…”

“…During the crisis caused by the COVID 19 pandemic, family firms proved to be more capable of dealing with the influence of the complex business environment unlike nonfamily firms (Gonz alez and P erez-Uribe, 2021). In order to mobilize to fight the crisis, family Business process innovations firms showed a high degree of mobility, unusual creativity, and innovativeness (Cesaroni et al, 2021;Le Breton-Miller et al, 2021). During the pandemic, innovative family firms were forced to consider transforming their business (Schmid et al, 2014;Yuan, 2019;Cucculelli and Peruzzi, 2020).…”

Are the Sins of the Father the Sins of the Sons, but Not the Daughters? Exploring How Leadership Gender and Generation Impact the Corporate Social Responsibility of Franchise Firms

“…Contrary to our expectations, we found that heir leaders involve their organisations more in instrumental CSR activities than founder leaders. This finding may suggest that, although heir leaders may be exposed to all aspects of CSR, heirs engage in CSR through available instrumental aspects, in this case, those related to the dimension of quality and R&D. According to a recent study on business succession and innovation processes [109], when the second generation takes over, family businesses can maintain the levels of innovation inherited from their predecessors, as long as the leaders behave as "catalysts of change". Therefore, it is possible to think that, in our case, the founding leaders have been able to pass on the legacy of instrumental CSR to the heir leaders through the transmission of family values [74].…”