Collaborative Innovation in Family Businesses : Empirical Study on the Influence of Family Involvement in Top Management Teams

Abstract: Background: Innovation is widely recognized to be instrumental for the sustained competitiveness of businesses, including family businesses. However, many family firms are unable to achieve innovation on their own, necessitating the shift towards collaborative innovation. Yet, due to the overlap of family and business, innovation in family firms is characterized by the so-called“innovation paradox” where family firms usually possess a greater ability to innovate but lack the willingness to do so. Accordingly, considerable attention has been given to the factors that affect the willingness of family firms in an attempt to understand and possibly resolve the innovation paradox. Purpose: The purpose of the present study is to explore how the degree of family involvement in the top management team (TMT) influences the family firm’s willingness to engage in collaborative innovation and how that influences the preferred type of collaborative innovation. By exploring the link between the degree of family involvement in TMT and the willingness in the context of collaborative innovation, our study aims to contribute to a deeper understanding of the innovation paradox associated with family businesses, and thereby offer important insights to practitioners, both from the family and non-family perspective. Method: Our methods were based on qualitative research with an exploratory research design and multiple case-study methods of eleven family firms. Through semi-structured interviews with both family and non-family TMT members, we gained insights into the role of family influence on family firms. We also used a cross-case analysis to compare the cases and indicate similarities and differences in order to draw our conclusions. Conclusion: The results of the study show that the degree of family involvement in the top management teams influences the family firms’ willingness to engage in collaborative innovation. Depending on the degree of family involvement as represented by the respective configurations, five patterns of influence manifestations (IM) are identified.