Innovativeness in family firms: Effects of positive leadership styles

Abstract

Family business is an unique kind of business, that can be depicted by an ownership structure mostly dominated by members of a particular family, shared familial norms and values and a shared way of thinking accumulated over a long period of time. This socioemotional wealth of the family owning the family business and overlapping family and business goals make them more harmonious, ambitious, hard working and more engaged regarding both their familial and business goals. In family a firm, central decision making that is accumulated on the hands of founder owners and their desire for further growth result in an inclination to respond quickly to opportunities that have the probability to provide economic gains which will be useful for both the owner family and the business itself. Moreover, sustainability and long run performance in these kind of companies are significant both business goals and family honor. And in this paper it is claimed that like other firms, family businesses, also prefer to benefit from innovation for economic growth due to the fact that innovation is an activity that is fast in financial return. That is to say, engaging in innovation process is both difficult and time consuming, but once a company accomplished to innovate a certain product or service, financial returns of this accomplishment are highly satisfying and rapid. And in this process, as in the case with other kind of businesses, proper style of leadership is an important factor in motivating employers to engage in innovation processes, and unique characteristics of family businesses and antecedents of an innovative work atmosphere effects this proper leadership style.