How do non-economic goals and priorities affect family firm’s propensity to innovate in automation? The role of ownership, board of director, young successor and generation

Abstract

PurposeThis study examines the propensity to innovate in automation of family firms (FFs) based on the socio-emotional wealth (SEW) perspective.Design/methodology/approachThis study’s analysis is based on three aspects. First, the authors consider three main non-economic goals and priorities of FFs: the family’s relationship with employees (read as to care for their satisfaction and well-being); the inner pride of building and maintaining the family and firm image and reputation; and the inner feeling to be socially responsible. Second, the authors consider how these goals and priorities vary among FFs according to four dimensions: family ownership, the presence of family members on the board of directors, the involvement of young successors, and the presence of founding and later generations. Finally, the consequences of automation are considered: lower firm employment, lower employees’ satisfaction and well-being, and higher firm productivity. The analysis is based on a sample of 4,150 Italian firms.FindingsThe analysis revealed that FFs are less prone to innovate in automation than non-FFs. Specifically, family ownership, the presence of family members on the board of directors, and the presence of founding generation are negatively associated with innovation in automation. Instead, the involvement of young successors and the presence of later generation are positively associated with innovation in automation.Originality/valueTo the authors’ knowledge, this study is the first investigation that, based on SEW, examines how FFs act on the decision to innovate in automation, thereby providing empirical evidence.