IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v212y2025ics0040162525000253.html
   My bibliography  Save this article

Demystifying sustainable innovation and governance in family firms: A critical review

Author

Listed:
  • Gutuleac, Rada
  • Giachino, Chiara
  • Vilamová, Šárka
  • Ferraris, Alberto

Abstract

Family firms' governance, which is inherently risk-averse, frequently inhibits sustainable innovation. However, the same governance structure, driven by a strong desire for oversight, can enhance innovation outcomes by ensuring diligent monitoring and execution. This paper aims to conceptualise how governance bodies within family firms contribute to fostering sustainable innovation. To this end, we conducted a critical review to identify the state of the art of sustainable innovation and governance structure of family firms. Then, drawing on the dynamic capability theory, we developed a new theory combining literature with insights from an illustrative case study. The findings unveil that some family firm governance bodies champion sustainable innovation, yet their efforts are frequently confined to the same. Given the absence of a dedicated board to manage the innovation process end-to-end, we propose an emerging solution in managerial practice, known as a shadow board, to fill this gap. That is, a selected group of younger employees or external experts tasked with advising the executive team. The results shall guide scholars towards a better understanding of the underlying mechanisms that can drive sustainable innovation in family firms from a governance perspective. Moreover, by leveraging these insights, organisations can enhance their ability to overcome potential challenges and optimise sustainable innovation processes.

Suggested Citation

  • Gutuleac, Rada & Giachino, Chiara & Vilamová, Šárka & Ferraris, Alberto, 2025. "Demystifying sustainable innovation and governance in family firms: A critical review," Technological Forecasting and Social Change, Elsevier, vol. 212(C).
    • Handle: RePEc:eee:tefoso:v:212:y:2025:i:c:s0040162525000253
    DOI: 10.1016/j.techfore.2025.123994
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162525000253
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2025.123994?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robinson, Douglas K.R. & Huang, Lu & Guo, Ying & Porter, Alan L., 2013. "Forecasting Innovation Pathways (FIP) for new and emerging science and technologies," Technological Forecasting and Social Change, Elsevier, vol. 80(2), pages 267-285.
    2. Ernesto J. Poza & Alex Stewart & G.T. Lumpkin & Jerome A. Katz, 2010. "Late Stage entrepreneurial activity: What students should know about family-owned and family-controlled companies," Advances in Entrepreneurship, Firm Emergence and Growth, in: Entrepreneurship and Family Business, pages 359-366, Emerald Group Publishing Limited.
    3. Giovanna Gavana & Pietro Gottardo & Anna Maria Moisello, 2023. "Board diversity and corporate social performance in family firms. The moderating effect of the institutional and business environment," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2194-2218, September.
    4. Rodrigo Basco & Thomas Bassetti & Lorenzo Dal Maso & Nicola Lattanzi, 2023. "Why and when do family firms invest less in talent management? The suppressor effect of risk aversion," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(1), pages 101-130, March.
    5. Yi-Chun Huang & Min-Li Yang & Ying-Jiuan Wong, 2016. "The effect of internal factors and family influence on firms’ adoption of green product innovation," Management Research Review, Emerald Group Publishing Limited, vol. 39(10), pages 1167-1198, October.
    6. Philipp C. Sauer & Stefan Seuring, 2023. "How to conduct systematic literature reviews in management research: a guide in 6 steps and 14 decisions," Review of Managerial Science, Springer, vol. 17(5), pages 1899-1933, July.
    7. Snyder, Hannah, 2019. "Literature review as a research methodology: An overview and guidelines," Journal of Business Research, Elsevier, vol. 104(C), pages 333-339.
    8. Ernst, Robin-Alexander & Gerken, Maike & Hack, Andreas & Hülsbeck, Marcel, 2022. "Family firms as agents of sustainable development: A normative perspective," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    9. Marta Berent-Braun & Lorraine Uhlaner, 2012. "Family governance practices and teambuilding: paradox of the enterprising family," Small Business Economics, Springer, vol. 38(1), pages 103-119, January.
    10. Raj V. Mahto & David E. Cavazos & Andrea Calabrò & Jeff P. Vanevenhoven, 2023. "CEO succession game in family firms: Owners vs. advisors," Journal of Small Business Management, Taylor & Francis Journals, vol. 61(6), pages 2714-2731, November.
    11. Patricio Duran & Nadine Kammerlander & Marc van Essen & Thomas Zellweger, 2016. "Doing More with Less : Innovation Input and Output in Family Firms," Post-Print hal-02312103, HAL.
    12. Patricio Duran & Nadine Kammerlander & Marc van Essen & Thomas Zellweger, 2016. "Doing More with Less : Innovation Input and Output in Family Firms," Post-Print hal-02276703, HAL.
    13. Réal Labelle & Taïeb Hafsi & Claude Francoeur & Walid Ben Amar, 2018. "Family Firms’ Corporate Social Performance: A Calculated Quest for Socioemotional Wealth," Journal of Business Ethics, Springer, vol. 148(3), pages 511-525, March.
    14. Bargoni, Augusto & Santoro, Gabriele & Messeni Petruzzelli, Antonio & Ferraris, Alberto, 2024. "Growth hacking: A critical review to clarify its meaning and guide its practical application," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    15. Brenes, Esteban R. & Madrigal, Kryssia & Requena, Bernardo, 2011. "Corporate governance and family business performance," Journal of Business Research, Elsevier, vol. 64(3), pages 280-285, March.
    16. Sascha Kraus & William McDowell & Domingo Enrique Ribeiro-Soriano & María Rodríguez-García, 2021. "The role of innovation and knowledge for entrepreneurship and regional development," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 33(3-4), pages 175-184, March.
    17. Juliana R. Baltazar & Cristina I. Fernandes & Veland Ramadani & Mathew Hughes, 2023. "Family business succession and innovation: a systematic literature review," Review of Managerial Science, Springer, vol. 17(8), pages 2897-2920, November.
    18. Marcello M. Mariani & Khowlah Al-Sultan & Alfredo De Massis, 2023. "Corporate social responsibility in family firms: A systematic literature review," Journal of Small Business Management, Taylor & Francis Journals, vol. 61(3), pages 1192-1246, May.
    19. Angel L. Meroño-Cerdán & Carolina López-Nicolás & Francisco J. Molina-Castillo, 2018. "Risk aversion, innovation and performance in family firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 27(2), pages 189-203, February.
    20. Douglas K. R. Robinson & Lu Huang & Yan Guo & Alan L. Porter, 2013. "Forecasting Innovation Pathways (FIP) for new and emerging science and technologies," Post-Print hal-01070417, HAL.
    21. Schryen, Guido & Wagner, Gerit & Benlian, Alexander & Paré, Guy, 2020. "A Knowledge Development Perspective on Literature Reviews: Validation of a New Typology in the IS Field," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 115532, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    22. Abbas, Jawad, 2024. "Does the nexus of corporate social responsibility and green dynamic capabilities drive firms toward green technological innovation? The moderating role of green transformational leadership," Technological Forecasting and Social Change, Elsevier, vol. 208(C).
    23. Bauweraerts, Jonathan & Arzubiaga, Unai & Diaz-Moriana, Vanessa, 2022. "Unveiling the global focus-performance relationship in family firms: The role of the board of directors," International Business Review, Elsevier, vol. 31(4).
    24. Xiang, Dong & Chen, Jiakui & Tripe, David & Zhang, Ning, 2019. "Family firms, sustainable innovation and financing cost: Evidence from Chinese hi-tech small and medium-sized enterprises," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 499-511.
    25. César Camisón-Zornoza & Beatriz Forés-Julián & Alba Puig-Denia & Sergio Camisón-Haba, 2020. "Effects of ownership structure and corporate and family governance on dynamic capabilities in family firms," International Entrepreneurship and Management Journal, Springer, vol. 16(4), pages 1393-1426, December.
    26. Ma, Liangbo, 2023. "Corporate social responsibility reporting in family firms: Evidence from China," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).
    27. James J. Cordeiro & Giorgia Profumo & Ilaria Tutore, 2020. "Board gender diversity and corporate environmental performance: The moderating role of family and dual‐class majority ownership structures," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1127-1144, March.
    28. Thi H.H. Nguyen & Mohamed H. Elmagrhi & Collins G. Ntim & Yue Wu, 2021. "Environmental performance, sustainability, governance and financial performance: Evidence from heavily polluting industries in China," Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2313-2331, July.
    29. Davila, Jessenia & Duran, Patricio & Gómez-Mejía, Luis & Sanchez-Bueno, Maria J., 2023. "Socioemotional wealth and family firm performance: A meta-analytic integration," Journal of Family Business Strategy, Elsevier, vol. 14(2).
    30. Jiamu Sun & Massimiliano Matteo Pellegrini & Marina Dabić & Kai Wang & Cizhi Wang, 2024. "Family ownership and control as drivers for environmental, social, and governance in family firms," Review of Managerial Science, Springer, vol. 18(4), pages 1015-1046, April.
    31. Rajan, Bharath & Salunkhe, Uday & Kumar, V., 2023. "Understanding customer engagement in family firms: A conceptual framework," Journal of Business Research, Elsevier, vol. 154(C).
    32. Cuadrado-Ballesteros, Beatriz & Rodríguez-Ariza, Lázaro & García-Sánchez, Isabel-María, 2015. "The role of independent directors at family firms in relation to corporate social responsibility disclosures," International Business Review, Elsevier, vol. 24(5), pages 890-901.
    33. Michele Pinelli & Francesco Chirico & Alfredo De Massis & Alessandro Zattoni, 2024. "Acquisition Relatedness in Family Firms: Do the Environment and the Institutional Context Matter?," Journal of Management Studies, Wiley Blackwell, vol. 61(4), pages 1562-1589, June.
    34. David J. Collis, 1994. "Research Note: How Valuable are Organizational Capabilities?," Strategic Management Journal, Wiley Blackwell, vol. 15(S1), pages 143-152, December.
    35. D.K. Robinson & Lu Huang & Ying Guo & Alan L. Porter, 2013. "Forecasting Innovation Pathways (FIP) for new and emerging science and technologies," Post-Print hal-01071140, HAL.
    36. Yi-Chun Huang & Min-Li Yang & Ying-Jiuan Wong, 2016. "The effect of internal factors and family influence on firms’ adoption of green product innovation," Management Research Review, Emerald Group Publishing Limited, vol. 39(10), pages 1167-1198, October.
    37. Andrew M. Pettigrew, 1990. "Longitudinal Field Research on Change: Theory and Practice," Organization Science, INFORMS, vol. 1(3), pages 267-292, August.
    38. Issam Laguir & Jamal Elbaz, 2014. "Family Firms And Corporate Social Responsibility (CSR): Preliminary Evidence From The French Stock Market," Post-Print hal-02047891, HAL.
    39. Del Vecchio, Pasquale & Secundo, Giustina & Garzoni, Antonello, 2023. "Phygital technologies and environments for breakthrough innovation in customers' and citizens' journey. A critical literature review and future agenda," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    40. Sascha Kraus & Matthias Breier & Weng Marc Lim & Marina Dabić & Satish Kumar & Dominik Kanbach & Debmalya Mukherjee & Vincenzo Corvello & Juan Piñeiro-Chousa & Eric Liguori & Daniel Palacios-Marqués &, 2022. "Literature reviews as independent studies: guidelines for academic practice," Review of Managerial Science, Springer, vol. 16(8), pages 2577-2595, November.
    41. Isabelle Le Breton-Miller & Danny Miller, 2020. "Ideals-Based Accountability and Reputation in Select Family Firms," Journal of Business Ethics, Springer, vol. 163(2), pages 183-196, May.
    42. Stefania Veltri & Romilda Mazzotta & Franco Ernesto Rubino, 2021. "Board diversity and corporate social performance: Does the family firm status matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(6), pages 1664-1679, November.
    43. Suess, Julia, 2014. "Family governance – Literature review and the development of a conceptual model," Journal of Family Business Strategy, Elsevier, vol. 5(2), pages 138-155.
    44. De Massis, Alfredo & Kotlar, Josip & Campopiano, Giovanna & Cassia, Lucio, 2013. "Dispersion of family ownership and the performance of small-to-medium size private family firms," Journal of Family Business Strategy, Elsevier, vol. 4(3), pages 166-175.
    45. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    46. Chirico, Francesco & Ireland, R. Duane & Pittino, Daniel & Sanchez-Famoso, Valeriano, 2025. "Resource orchestration, socioemotional wealth, and radical innovation in family firms: Do multifamily ownership and generational involvement matter?," Research Policy, Elsevier, vol. 54(1).
    47. Vinod Thakur & Sabyasachi Sinha, 2024. "Family governance structures in family businesses: A systematic literature review and future research agenda," Journal of Small Business Management, Taylor & Francis Journals, vol. 62(6), pages 3016-3052, November.
    48. Yi-Chun Huang & Min-Li Yang & Ying-Jiuan Wong, 2016. "The effect of internal factors and family influence on firms’ adoption of green product innovation," Management Research Review, Emerald Group Publishing Limited, vol. 39(10), pages 1167-1198, October.
    49. Andreeva, Tatiana E. & Chayka, Victoria A., 2006. "Dynamic capabilities: What they need to be dynamic?," Working Papers 846, Graduate School of Management, St. Petersburg State University.
    50. Christoph Stock & Laura Pütz & Sabrina Schell & Arndt Werner, 2024. "Corporate Social Responsibility in Family Firms: Status and Future Directions of a Research Field," Journal of Business Ethics, Springer, vol. 190(1), pages 199-259, February.
    51. Jordi Surroca & Josep A. Tribó & Sandra Waddock, 2010. "Corporate responsibility and financial performance: the role of intangible resources," Strategic Management Journal, Wiley Blackwell, vol. 31(5), pages 463-490, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bauweraerts, Jonathan & Arzubiaga, Unai & Diaz-Moriana, Vanessa, 2022. "Going greener, performing better? The case of private family firms," Research in International Business and Finance, Elsevier, vol. 63(C).
    2. Leonidou, Leonidas C. & Eteokleous, Pantelitsa P. & Christodoulides, Paul & Strømfeldt Eduardsen, Jonas, 2023. "A dynamic capabilities perspective to socially responsible family business: Implications on social-based advantage and market performance," Journal of Business Research, Elsevier, vol. 155(PA).
    3. Francesco Chirico & Kimberly A. Eddleston & Pankaj C. Patel, 2025. "Does it Pay to Patent Green Innovations? Stock Market Reactions to Family and Nonfamily Firms’ Green Patents," Journal of Business Ethics, Springer, vol. 198(4), pages 947-970, May.
    4. Sang‐Joon Kim & Jongwan Bae & SoHyeon Kang, 2024. "The cross‐cutting pursuit of family values: When and how do family firms engage in corporate environmental responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 2749-2769, July.
    5. César Camisón-Zornoza & Beatriz Forés-Julián & Alba Puig-Denia & Sergio Camisón-Haba, 0. "Effects of ownership structure and corporate and family governance on dynamic capabilities in family firms," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-34.
    6. Soluk, Jonas & Decker-Lange, Carolin & Hack, Andreas, 2023. "Small steps for the big hit: A dynamic capabilities perspective on business networks and non-disruptive digital technologies in SMEs," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    7. Mumin Dayan & Poh Yen Ng & Nelson Oly Ndubisi, 2019. "Mindfulness, socioemotional wealth, and environmental strategy of family businesses," Business Strategy and the Environment, Wiley Blackwell, vol. 28(3), pages 466-481, March.
    8. César Camisón-Zornoza & Beatriz Forés-Julián & Alba Puig-Denia & Sergio Camisón-Haba, 2020. "Effects of ownership structure and corporate and family governance on dynamic capabilities in family firms," International Entrepreneurship and Management Journal, Springer, vol. 16(4), pages 1393-1426, December.
    9. Baday Yıldız, Ezgi & Dabić, Marina & Stojčić, Nebojša & Dindaroğlu, Yeşim & Temel, Serdal, 2021. "Scrutinizing innovation performance of family firms in efficiency-driven environment," Journal of Business Research, Elsevier, vol. 129(C), pages 260-270.
    10. Graves, Chris & Shi, Henry X. & Barbera, Francesco, 2022. "Family-centred non-economic goals and the internationalisation of family firms: Evidence from Australia," International Business Review, Elsevier, vol. 31(4).
    11. Sabela Siaba & Berta Rivera, 2024. "The evolution of the field of family business research over a decade (2012–2022)," Small Business Economics, Springer, vol. 63(3), pages 1089-1115, October.
    12. Lai, Kuei-Kuei & Chen, Yu-Long & Kumar, Vimal & Daim, Tugrul & Verma, Pratima & Kao, Fang-Chen & Liu, Ruirong, 2023. "Mapping technological trajectories and exploring knowledge sources: A case study of E-payment technologies," Technological Forecasting and Social Change, Elsevier, vol. 186(PB).
    13. Davila, Jessenia & Duran, Patricio & Gómez-Mejía, Luis & Sanchez-Bueno, Maria J., 2023. "Socioemotional wealth and family firm performance: A meta-analytic integration," Journal of Family Business Strategy, Elsevier, vol. 14(2).
    14. Gibson, Elizabeth & Daim, Tugrul U. & Dabic, Marina, 2019. "Evaluating university industry collaborative research centers," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 181-202.
    15. Maarten B.T. de Groot & Oli R. Mihalache & Tom Elfring, 2022. "Toward a Theory of Family Social Capital in Wealthy Transgenerational Enterprise Families," Entrepreneurship Theory and Practice, , vol. 46(1), pages 159-192, January.
    16. Li, Xin & Xie, Qianqian & Jiang, Jiaojiao & Zhou, Yuan & Huang, Lucheng, 2019. "Identifying and monitoring the development trends of emerging technologies using patent analysis and Twitter data mining: The case of perovskite solar cell technology," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 687-705.
    17. Endah Rahayu Lestari & Nimas Mayang Sabrina Sunyoto, 2023. "Fostering green innovation in achieving sustainable performance," Natural Resources Forum, Blackwell Publishing, vol. 47(3), pages 413-434, August.
    18. Cheng, Yu & Huang, Lucheng & Ramlogan, Ronnie & Li, Xin, 2017. "Forecasting of potential impacts of disruptive technology in promising technological areas: Elaborating the SIRS epidemic model in RFID technology," Technological Forecasting and Social Change, Elsevier, vol. 117(C), pages 170-183.
    19. Hamza Smajić & Ramo Palalić & Irfan Butt & Nisar Ahmed & Veland Ramadani, 2025. "Socioemotional wealth and family firms performance: a framework and future pathways," Review of Managerial Science, Springer, vol. 19(4), pages 1257-1296, April.
    20. Ivo Hristov & Antonio Chirico & Francesco Ranalli & Riccardo Camilli, 2022. "La pianificazione della sostenibilit? nelle aziende familiari: il ruolo dei key value drivers," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2022(3), pages 109-134.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:212:y:2025:i:c:s0040162525000253. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.