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Family-Driven Innovation: Resolving the Paradox in Family Firms

by Alfredo De Massis, Alberto Di Minin, and Federico Frattini   FEATURED

Family firms are the most ubiquitous form of business in the world. But because people have certain assumptions about how families work, they often have assumptions about how family businesses work. One central assumption revolves around the concept of innovation. Many people often believe that family firms will be more conservative and less innovative than their competitors. This article presents an integrated, contingency perspective on family firm innovation called Family-Driven Innovation (FDI). The framework highlights the need for consistency between a family firm’s strategic innovation decisions and its idiosyncrasies to achieve and sustain competitive advantage through innovation. This article also offers some directions for future research on FDI and serves as an introduction to this special section on family firms.

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Inside the Fall 2015 Issue:


 

Family Firms

Family-Driven Innovation: Resolving the Paradox in Family Firms   FEATURED
Family firms are a diverse group of organizations, but all have a certain set of “socio-emotional” preferences -- namely, the pursuit of non-economic goals that cater to family desires like preserving family control, providing jobs for relatives, and maintaining reputation within their communities. (more)


Resources and Innovation in Family Businesses: The Janus-Face of Socioemotional Preferences
Family firms are a diverse group of organizations, but all have a certain set of “socio-emotional” preferences -- namely, the pursuit of non-economic goals that cater to family desires. How can families leverage their strengths without becoming too altruistic? (more)


Managing Turbulence: Business Model Development in a Family-Owned Airline
This article describes the history of Cimber, a family-owned airline based in Denmark. Studying the company provides an excellent opportunity to examine the role of family owners in conceiving and implementing new business models at critical transitional stages. (more)


Family Assets and Liabilities in the Innovation Process
Are family firms innovative or not? Conflicting findings may stem from not sufficiently examining the role of “family assets,” the value-creating resources that are unique to family firms: name, reputation, legacy, network ties, and intangible values can all have an effect on the process of innovation. (more)


Diagnosing Innovation Readiness in Family Firms
While most stages of the innovation process present difficulties, the initial adoption phase is among the most important. One key means of enhancing the success of innovation within family firms is to assess readiness before beginning. (more)


Management Strategy

The Three Faces of Bounded Reliability: Alfred Chandler and the Micro-Foundations of Management Theory
Management research often relies on the concept of opportunism to explain many behaviors on the individual and firm level. This article explores an alternative -- bounded reliability -- first described by historian Alfred Chandler. (more)


Business and Society

Fair Trade USA: Scaling for Impact  CASE STUDY
Fair Trade USA is the leading third-party certifier of fair trade products in North America. By forging notable partnerships with leading U.S. retailers including Starbucks, PepsiCo, Whole Foods, and others, FT USA had garnered a 55 percent brand recognition amongst consumers in the United States by 2014. But where should the company go from here? (more)