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Dynasties of innovation: highly performing German family firms and the owners' role for innovation

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  • Marc-Michael H. Bergfeld
  • Felix-Michael Weber

Abstract

At least 70% of all large and old German corporations are still controlled by the owning families. Studies have found that these firms can be successful in adapting to changing environments and innovating in a sustainable way over more than 100 years. Innovative dynasties outperform publicly listed companies. This paper looks at the owning families' influence on the innovativeness of their companies. In qualitative interviews, it investigates the innovative behaviour of dynastic families across generations: their attitude towards innovation, their time-orientation herein and their approaches to ensure innovativeness in their firms over the mid- to long-term. In summary, successful dynastic families define innovation as the ability to constantly address new markets and technologies, based on a clear long-term strategy. The owning families assure constant incremental innovation in daily operations and, even more importantly, initiate radical innovations and corporate renewal as strategy-setting entities 'behind the scenes'.

Suggested Citation

  • Marc-Michael H. Bergfeld & Felix-Michael Weber, 2011. "Dynasties of innovation: highly performing German family firms and the owners' role for innovation," International Journal of Entrepreneurship and Innovation Management, Inderscience Enterprises Ltd, vol. 13(1), pages 80-94.
    • Handle: RePEc:ids:ijeima:v:13:y:2011:i:1:p:80-94
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    Citations

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    Cited by:

    1. Matthias Filser & Alexander Brem & Johanna Gast & Sascha Kraus & Andrea Calabrò, 2016. "Innovation In Family Firms — Examining The Inventory And Mapping The Path," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(06), pages 1-39, August.
    2. Dieleman, Marleen, 2019. "Reaping what you sow: The family firm innovation trajectory," Journal of Family Business Strategy, Elsevier, vol. 10(4).
    3. Beck, Susanne & Prügl, Reinhard & Walter, Katharina, 2020. "Communicating the family firm brand: Antecedents and performance effects," European Management Journal, Elsevier, vol. 38(1), pages 95-107.
    4. Miguel Angel Acedo-Ramirez & Juan Carlos Ayala Calvo & Ernesto Navarrete-Martinez, 2017. "Determinants of Capital Structure: Family Businesses versus Non-Family Firms," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 67(2), pages 80-103, April.
    5. Goel, Sanjay & Mazzola, Pietro & Phan, Phillip H. & Pieper, Torsten M. & Zachary, Ramona K., 2012. "Strategy, ownership, governance, and socio-psychological perspectives on family businesses from around the world," Journal of Family Business Strategy, Elsevier, vol. 3(2), pages 54-65.
    6. Jan Schulz & Mishael Milaković, 2023. "How Wealthy are the Rich?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(1), pages 100-123, March.
    7. Johan Wiklund & Mattias Nordqvist & Karin Hellerstedt & Miriam Bird, 2013. "Internal versus External Ownership Transition in Family Firms: An Embeddedness Perspective," Entrepreneurship Theory and Practice, , vol. 37(6), pages 1319-1340, November.
    8. Bövers, Jana & Hoon, Christina, 2021. "Surviving disruptive change: The role of history in aligning strategy and identity in family businesses," Journal of Family Business Strategy, Elsevier, vol. 12(4).
    9. Arndt Werner & Christian Schröder & Simone Chlosta, 2018. "Driving factors of innovation in family and non-family SMEs," Small Business Economics, Springer, vol. 50(1), pages 201-218, January.
    10. Sami Basly & Amira Hammouda, 2020. "Family Businesses and Digital Entrepreneurship Adoption: A Conceptual Model," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 29(2), pages 326-364, September.
    11. Kraus, Sascha & Kallmuenzer, Andreas & Stieger, Daniel & Peters, Mike & Calabrò, Andrea, 2018. "Entrepreneurial paths to family firm performance," Journal of Business Research, Elsevier, vol. 88(C), pages 382-387.
    12. Röd, Irina, 2016. "Disentangling the family firm’s innovation process: A systematic review," Journal of Family Business Strategy, Elsevier, vol. 7(3), pages 185-201.
    13. Unai Arzubiaga & Amaia Maseda & Txomin Iturralde, 2019. "Entrepreneurial orientation in family firms: New drivers and the moderating role of the strategic involvement of the board," Australian Journal of Management, Australian School of Business, vol. 44(1), pages 128-152, February.
    14. Andreas Kallmuenzer & Andreas Strobl & Mike Peters, 2018. "Tweaking the entrepreneurial orientation–performance relationship in family firms: the effect of control mechanisms and family-related goals," Review of Managerial Science, Springer, vol. 12(4), pages 855-883, October.
    15. Sven Wolff & Christina Guenther & Petra Moog & David B. Audretsch, 2023. "The geography of the continuum of entrepreneurship activities—a first glance based on German data," The Journal of Technology Transfer, Springer, vol. 48(4), pages 1243-1273, August.
    16. Josiane Fahed-Sreih & Abdul-Nasser El-Kassar, 2017. "Strategic Planning, Performance And Innovative Capabilities Of Non-Family Members In Family Businesses," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 21(07), pages 1-24, October.
    17. Vanessa Diaz-Moriana & Eric Clinton & Nadine Kammerlander & G. T. Lumpkin & Justin B. Craig, 2020. "Innovation Motives in Family Firms: A Transgenerational View," Entrepreneurship Theory and Practice, , vol. 44(2), pages 256-287, March.
    18. Pramodita Sharma & Carlo Salvato, 2011. "Commentary: Exploiting and Exploring New Opportunities over Life Cycle Stages of Family Firms," Entrepreneurship Theory and Practice, , vol. 35(6), pages 1199-1205, November.
    19. Ivan Miroshnychenko & Alfredo De Massis & Danny Miller & Roberto Barontini, 2021. "Family Business Growth Around the World," Entrepreneurship Theory and Practice, , vol. 45(4), pages 682-708, July.
    20. Anne Heider & Marcel Hülsbeck & Leopold Schlenk-Barnsdorf, 2022. "The role of family firm specific resources in innovation: an integrative literature review and framework," Management Review Quarterly, Springer, vol. 72(2), pages 483-530, June.
    21. Heiko Kleve & Tobias Köllner & Arist von Schlippe & Tom A. Rüsen, 2020. "The business family 3.0: Dynastic business families as families, organizations and networks—Outline of a theory extension," Systems Research and Behavioral Science, Wiley Blackwell, vol. 37(3), pages 516-526, May.
    22. Wang, Kun Tracy & Shailer, Greg, 2017. "Family ownership and financial performance relations in emerging markets," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 82-98.

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