How family influence, socioemotional wealth, and competitive conditions shape new technology adoption

Abstract

Research summary:In family businesses, investment decisions often involve both socioemotional wealth and economic considerations. Focusing on new technology adoption, we argue that multiple dimensions of socioemotional wealth contribute to complex effects within different types of family firms-depending on the level of family control-as well as in contrast to non-family firms. Results based on cable TV operators from 1983 to 1987 confirm that family ownership correlates negatively with technology adoption, especially when family owners hold a minority rather than majority position. We also show contingencies based on performance improvements and competitive threats. Our arguments contribute new insights about the tensions between economic and socioemotional factors within minority family ownership that are absent from non-family firms and more pronounced than in majority family firms. Managerial summary:We find evidence of greater reluctance toward new technology adoption among firms with minority family influence than majority family influence. This suggests that goals related to socioemotional wealth only partly explain the cautious decision-making observed in family firms, with further caution arising from conflicting priorities between family and non-family owners. Recent performance improvements help offset the reluctance to adopt new technology, albeit to a lesser degree among firms with minority family ownership. High levels of competitive threats also offset the reduction in new technology adoption, and contrary to expectations, to a greater extent among minority family firms.

The courage to choose! Primogeniture and leadership succession in family firms

“…Using this rich data set, we examine how the SEW endowment—which we operationalize as family control and influence—affects the likelihood of selecting the firstborn child as the next leader. Furthermore, we study “the boundary conditions of socioemotional wealth” (Souder, Zaheer, Sapienza, & Ranucci, ) by investigating whether and to what extent the SEW endowment affects the selection of the firstborn child as next leader, and how its effect varies when the family firms is vulnerable, that is, experiencing performance below aspiration levels (Gómez‐Mejía, Patel, & Zellweger, ). Additionally, we test the performance implications of such succession choices to determine how deviations from the traditional primogeniture rule (Bertrand & Schoar, ) affect post‐succession firm performance both in the overall sample, and at different generational stages of the family firm (i.e., founder versus later generations).…”

Determinants of Industrial Internet of Things Adoption in German Manufacturing Companies

“…the impact of frugal technologies on the technology di®usion process [Zhang (2018)] and the potential of the di®usion of new technologies among consumers who abandoned an earlier version of that technology [Xu et al (2017)], as well as in the B2B context, e.g. the relationship between technology adoption and innovation success over time [Bourke and Roper (2016)], the importance of speci¯c innovation characteristics of new technologies for their di®usion among companies [Hameed and Counsell (2014)], the role of family in°uence on the adoption of radically new technologies in family-owned¯rms [Chrisman et al (2015)], and the impact of socioemotional wealth on technology di®usion in family businesses [Souder et al (2017)].…”

Does Socioemotional Wealth Matier for Competitive Advantage? A Case of Polish Family Businesses

“…Meanwhile, in SEW case, developments with regards to new, discontinuous technology adoption are inhibited as a potential dilution of family control (Konig, Kammerlander, & Enders, 2013). Using similar, family-ownership logic, Souder, Zaheer, Sapienza, and Ranucci (2017) theorize and demonstrate a tendency to perceive new technology as potential erosion of SEW, mainly from identity and family influence aspects. Drawing on this perspective, we argue that SEW may trigger or limit family firms' strategic initiatives that ultimately shape their competitive advantage.…”