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Family-owned manufacturing SMEs and innovativeness: A comparison between within-family successions and external takeovers

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  • Grundström, Christina
  • Öberg, Christina
  • Öhrwall Rönnbäck, Anna
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    Abstract

    The purpose of this article is to compare within-family successions and external-party takeovers in family-owned manufacturing SMEs to determine potential differences in how they are perceived and managed. This paper focuses on two long-term aspects of family businesses – their succession and their ability to innovate – defining innovativeness as an aspect of organisational culture. Based on ten case studies, the paper concludes that the values related to a firm's context, influenced by the divesting party as well as by the choice of successor, create inertia, to the extent that only minor changes in innovation orientation are possible. External owners may focus to a greater extent on growth and new ways of innovating, while family-succeeded firms diversify so as not to abandon previous businesses. Intermediating factors, such as customer involvement, type of SME, and the acquirers’ motives, influence the innovative organisational culture and create explanatory links to innovation intensity and methodologies of innovation.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Family Business Strategy.

    Volume (Year): 3 (2012)
    Issue (Month): 3 ()
    Pages: 162-173

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    Handle: RePEc:eee:fambus:v:3:y:2012:i:3:p:162-173

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    Related research

    Keywords: Succession; Family business; SME; Innovativeness; Manufacturing; Acquisition;

    References

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    1. Bjursell, Cecilia, 2011. "Cultural divergence in merging family businesses," Journal of Family Business Strategy, Elsevier, vol. 2(2), pages 69-77, June.
    2. Howorth, Carole & Westhead, Paul & Wright, Mike, 2004. "Buyouts, information asymmetry and the family management dyad," Journal of Business Venturing, Elsevier, vol. 19(4), pages 509-534, July.
    3. Dana, Lucio E. & Smyrnios, Kosmas X., 2010. "Family business best practices: Where from and where to?," Journal of Family Business Strategy, Elsevier, vol. 1(1), pages 40-53, March.
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    11. John Hagedoorn, 2002. "External Sources of Innovative Capabilities: The Preferences for Strategic Alliances or Mergers and Acquisitions," Journal of Management Studies, Wiley Blackwell, vol. 39(2), pages 167-188, 03.
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    13. Mark K. Fiegener, 2010. "Locus of Ownership and Family Involvement in Small Private Firms," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 296-321, 03.
    14. Carlo Salvato & Ugo Lassini & Johan Wiklund, 2007. "Dynamics of external growth in SMEs: A process model of acquisition capabilities emergence," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 59(3), pages 282-305, July.
    15. Abdellatif, Mahamat & Amann, Bruno & Jaussaud, Jacques, 2010. "Family versus nonfamily business: A comparison of international strategies," Journal of Family Business Strategy, Elsevier, vol. 1(2), pages 108-116, June.
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