Sample Business Paper on Family Business Entrepreneurship and Innovation

Introduction

The use of factors like technology push and demand-pull is an approach used by Migliori et al. (2020: 1) to measure the innovation investment propensity of a firm that engages in a family business. Analysis into the family business entrepreneurship and innovation explains that factors like the uncertain nature of customers, competitive and market dynamics, and prediction of payoffs represented the knowledgeable and financial resources to promote successful innovation. Thus, the policy-making agenda for individual firms remains focused on comprehending factors inhibiting and promoting innovativeness among family firms. Focus on the family firm is also significant as it shows the different determinants useful for both non-family and family firms in integrating efficient innovations and entrepreneurship.

Migliori et al. (2020: 1) note, however, that a negative co-relation between technological innovation and its integration in the family firm may arise from various factors. The use of the agency theory in the case, for instance, highlights preferences for internal resources of finance through increased funding safeguarding with focus on non-economic goals like the protection of the business for other generations. The approach, thus, promotes financial constraints for the organisations. The investigative tools technology-pushed and demand-pulled innovation, however, measure the influencing factors showing a firm’s direction concerning technological innovation. Family business entrepreneurship, thus, can benefit from increased innovation by using measurement tools like technology-pushed and demand-pulled innovation measures. The approach helps to develop a more in-depth interpretation of the firms’ innovation behaviors through its innovative factors while comparing them to other non-family firms highlight comparison and differences.

Literature Review

 

Family Management and its Effect on Innovation

 

Migliori et al. (2020: 1) explains that despite existing data surrounding factors like family management and their effect on a firm’s innovation, exertion practices, and studies remains minimal. The author uses the elements of technological push and demand-pull to develop a moderation of the relationship, especially among private firms. Rondi et al. (2018: 6) notes that family firms in Europe, for example, represent some enhanced organisations that adopt either traditional attachment or risk-taking propensity regarding innovation. Despite embracing long-term orientation concerning change from the families, the tendencies to avert risks and factors like the use of increased resources for innovation may lead to less development and innovation realized from such organisations (Rondi et al. 2018: 6). On the other hand, the same firms can prove more effective in promoting innovation outputs that may sometimes overpass those from non-family businesses.

Feranita et al. (2017: 3) insist on the use of collaborative innovation among family firms since the approach uses knowledge from other cases, including past experiences and assistance with resource constraints focused on boosting the firms’ innovation potential. Since many family firms remain unwilling to lose shares or control while maintaining long-term orientation, collaborative innovation not only offers a competitive edge but also overcomes innovation barriers like the lack of innovation resources. Family conglomerates represent a practical example of innovation in the family business through engagement in an array of industries for accessing resources while retaining family control (Feranita et al. 2017: 4). The use of collaborative innovation for the sharing of technology, information, resources, and knowledge with other parties through joint ventures, licensing, partnerships, and alliances, thus, can help in acquiring innovation even from outside sources.

 

Bridging The Gap Between Innovation Management and Family Firms

 

Migliori et al. (2020: 3) notes that family management, most times, has adverse effects on factors like technological innovations. Intentions like the maintenance of substantial power or the pursuit of non-financial goals represent factors promoting risk aversion and financial constraints among family firms. The introduction of new perspectives and approaches focused on innovation management to such firms. Thus, it offers better comprehension of factors inhibiting and driving innovation among family organisations. As Feninger et al. (2019: 7) note, family involvement through management represents an essential source for change. Family managers, for instance, can remain necessary in influencing the firm’s innovation activities and strategies. Strategic acceptance and management of risks like increasing innovation inputs through the use of available family dynamics, thus, promote innovation from increased firm dependency on decision-making.

Internationalisation processes, as Braga et al. (2017: 236) note, can also promote innovation among family firms. Organisations looking to exploit untapped markets can use the concepts as motivation to encourage innovation in seeking economic growth. The diversification of risks from particular markets with aims of gaining profit, thus, can offer family firms reason to integrate innovation in their practices. Following competitors’ footsteps, customers, diversifying for reducing risk and looking for efficient production gains like low labour costs, thus, make innovation a necessity for family firms. Urbinati et al. (2017: 217) uses the social capital theory, for instance, to explain that the nature of social interactions among family members combined with emotional commitment produces strong influences behind underlying mechanisms. The mechanisms involve technological and information innovation techniques adopted and diffused in the organisation. Adoption of effective, innovative practices, thus, can help to combat challenges of little to no innovation developed among family firms.

Feninger et al. (2019: 7) notes that the level of family involvement in the management process affects innovation willingness in both positive and negative ways. Founder-led organisations, for instance, record higher levels of innovation even when compared to non-family firms. However, later generations involved in the same family firms shoe lesser focus on innovation. Lack of diversification of wealth, for instance, promotes caution in input innovation that breeds negative relationships between innovation levels and the family firm.

 

Adaptation and Learning Process

 

The integration of technology-push and demand-pull perspectives in innovation management can help with proper analysis of innovation behaviours developed by various family firms (Milgiori et al. 2020: 3). Demand-pull factors, for instance, represent both consumer and market needs and a firm’s ability and willingness to meet such demands. The elements may include demand heterogeneity, various geographic markets, and new potential markets. A family firm, thus, can learn more concerning available markets or demands of its customers to integrate innovation by following the direction of demand. The technology push perspectives, on the other hand, focus on introducing new technology through commercialisation focused on driving innovation (Milgiori et al. 2020: 3). The approach can offer chances to venture into untapped markets or focus on modifying the firm’s operating systems to meet with current market standards for competitive advantage.

Constant re-configurations and re-assessments, especially among family firms in building processes and adopting chances are necessary in successful innovation through rapid changing times (Feninger et al. 2019: 15).

 

References

Aiello, F., Cardamone, P., Mannarino, L. and Pupo, V., 2019. Firm Ownership And Green Patents. Does Family Involvement In Business Matter? (No. 201904).

http://www.ecostat.unical.it/RePEc/WorkingPapers/WP04_2019.pdf

Braga, V., Correia, A., Braga, A. and Lemos, S., 2017. The innovation and internationalisation processes of family businesses. Review of International Business and Strategy. https://www.researchgate.net/profile/Alexandra_Braga/publication/317052598_The_innovation_and_internationalisation_processes_of_family_businesses/links/5a6ab952aca2725b1c1bd6d6/The-innovation-and-internationalisation-processes-of-family-businesses.pdf

Feninger, M., Kammerlander, N. and De Massis, A., 2019. Family business innovation: A circular process model. In Family Firms and Institutional Contexts. Edward Elgar Publishing. https://www.researchgate.net/profile/Nadine_Kammerlander/publication/329830734_Family_business_innovation_A_circular_process_model/links/5cd9d1c9458515712ea93c48/Family-business-innovation-A-circular-process-model.pdf

Feranita, F., Kotlar, J. and De Massis, A., 2017. Collaborative innovation in family firms: Past research, current debates and agenda for future research. Journal of Family Business Strategy8(3), pp.137-156.

https://eprints.lancs.ac.uk/id/eprint/87001/1/Feranita_et_al._2017_JFBS_Collaborative_innovation_family_firms_Accepted.pdf

Migliori, S., de Massis, A., Maturo, F., and Paolone, F., 2020. How does family management affect innovation investment propensity? The key role of innovation impulses. Journal of Business Research, pp. 1-14.