Introduction
Family firms are generally perceived to be small to medium-sized companies, sharing many drawbacks and problems with each other. While such a judgment may be accurate, family businesses do play a significant role in the global economy. There are also huge companies that are operated by family members, such as Walmart and Samsung. It is believed that family-owned enterprises differ from ordinary public companies in their long-term focus, and this particular ownership structure explains this difference in company goals. However, there is no consistent evidence about the extent to which families influence innovation outputs.
A systematic literature review conducted by Calabrò et al. (2019) attempted to provide a thorough picture of the current understanding of family firm innovation. Its introductory portion provides a concise description of the problem and the reasons why it has both educational and scientific significance. The study goals set by the researchers are feasible because it is essentially a synthesis of available knowledge. The researchers aim to build a comprehensive framework for studying family firm innovation.
Literature Review
Small and medium-sized enterprises play a vital role in the microeconomy of any country because these companies provide job opportunities and drive innovation on a local level. However, there is a certain amount of controversy when it comes to companies owned by families because there is no consistent evidence on whether this ownership scheme aids innovation or restrains it. Family firms generally have more opportunities for innovation, but paradoxically, they express surprisingly low amounts of willingness to use these possibilities.
Because the study is itself a literature review, related works and their significance were covered in the introductory part of the research. The review is comprehensive and all cited references, which are mostly comprised of primary resources, are relevant to the problem under investigation. The researchers provided not merely a series of abstracts and annotations, but a discussion that features comparison and differentiation of the available literature. The last paragraph of the introductory part is not a brief summary of the literature, but the researchers’ proposals and explanation of how these ideas had emerged. The authors did not provide any specific hypotheses, but instead, provided specific goals they want to accomplish and particular benefits of this review.
Methods
The data from previous research on family firm innovation is controversial and poses a hindrance to future studies. To eliminate these gaps, Calabrò et al. (2019) conducted a systematic review of the literature on innovation in family businesses. The study excluded books and only considered peer-review journal articles because researchers attempted to use “a structured, transparent, and reproducible method of selecting and assessing” the scientific works (Calabrò et al., 2019). The time frame of 1961 to 2017 was used in the research because the first work concerning family firm innovation was published in 1961 (Calabrò et al., 2019). The sample is subject to cultural bias because they were only comprised of the works in English.
The researchers used a 4-step review procedure, starting with a keyword search in four databases – Econlit, Web of Science, ABI Inform, and Elsevier Science Direct. Duplicate articles, non-relevant works according to their abstracts, and non-relevant articles according to their content were excluded from the review after the manual article assessment process (Calabrò et al., 2019). This design is appropriate for a comprehensive literature review.
The final sample was analyzed using an excel data extraction sheet, and the researchers synthesized the final set of data yielding a complete picture of current literature on family firm innovation. Transparency and reproducibility support the validity of the used methods. However, there are no reliability coefficients that could support the usage of the given methods.
Preliminary Data
There are significant findings made by the researchers in their literature review. Statistics are provided as part of the descriptive results presented by the researchers. Despite the first article dating back to 1961, the topic of family firm innovations is relatively new, as the distribution of works per year suggests (Calabrò et al., 2019). The researchers grouped the publications into three distinct sets – theoretical, empirical qualitative, and quantitative (Calabrò et al., 2019). This approach is relevant because it may help identify the source of heterogeneity in current evidence. Each finding was viewed from the perspective of the set goals and discussed in the context of comparison with other results.
Theoretical research was based on various frameworks such as Social Capital theory, and Contingency theory. While there are different propositions because of this variety in frameworks used, the general idea is that family firms have a high potential for innovation because of social capital (Calabrò et al., 2019). However, conflict management processes within these companies must be robust in order to avoid the detrimental effect that may come from family social capital (Calabrò et al., 2019).
Empirical studies suggest that families generally choose long-term strategies and implement both incremental innovation and radical change. The prosperity of the family business heavily depends on the relationships between family members and their shared values. Quantitative evidence proposes that family firms are not able to demonstrate innovative intensity because of family conflicts (Calabrò et al., 2019). However, CEO duality and non-family directors can handle these adverse effects of family disagreements.
Study Limitations
This literature review was adequately conducted by a team of knowledgeable researchers. Only credible sources of data were used, and the researchers only considered peer-reviewed journal articles to eliminate bias as much as possible (Calabrò et al., 2019). Each source was manually assessed before being accepted for review (Calabrò et al., 2019). The limited number of databases and the fact that articles written exclusively in English were considered for this study are the only limitations of this research. For a more thorough picture of the current state of the literature on the topic of family firm innovation, studies in different languages should also be reviewed. At present, this literature review is subject to cultural bias and not generalizable to all markets of the world. This report sets a direction for further research in this field.
Conclusion
The literature review by Calabrò et al. (2019) is a vital contribution to the scientific community. Not only it synthesizes the diverse range of information available on the topic, but it also provides a framework for dealing with the heterogeneity of the conflicting data and inconsistent evidence. The researchers carefully chose the articles to include in the review by incorporating a systematic four-step process.
They also identified the common topics within this field of research and grouped the articles according to their research nature. The study features only a few limitations, and generalizability is constrained only by a cultural bias. Despite these limitations, the literature review is an essential step for systematizing the knowledge of family firms and their innovative capacity.
References
Calabrò, A., Vecchiarini, M., Gast, J., Campopiano, G., De Massis, A., & Kraus, S. (2019). Innovation in family firms: A systematic literature review and guidance for future research. International Journal of Management Reviews, 21(3), 317-355.