What Makes a Family Firm Innovative? CEO Risk-Taking Propensity and the Organizational Context of Family Firms

Investigating the new product portfolio innovativeness of family firms connects two important topics that have recently received considerable attention in innovation and family firm research. First, new product portfolio innovativeness has been identified as a critical determinant of firm performance. Second, research on family firms has focused on the questions of if and why family firms are more or less innovative than other organizational forms. Research investigating the innovativeness of family firms has often applied a risk-oriented perspective by identifying socioemotional wealth (SEW) as the main reference that determines firm behavior. Thus, prior research has mainly focused on the organizational context to predict innovation-related family firm behavior and neglected the impact of preferences and the behavior of the chief executive officer (CEO), which have both been shown to affect firm outcomes. Hence, this study aims to extend the previous research by introducing the CEO's disposition to organizational context variables to explain the new product portfolio innovativeness of small and medium-sized family firms. Specifically, this study explores how the organizational context (i.e., ownership by top management team [TMT] family members and generation in charge of the family firm) of family firms interacts with CEO risk-taking propensity to affect new product portfolio innovativeness. Using a sample of 114 German CEOs of small and medium-sized family firms operating in manufacturing industries, the results show that CEO risk-taking propensity has a positive effect on new product portfolio innovativeness. Moreover, the analyses show that the organizational context of family firms impacts the relationship between CEO risk-taking propensity and new product portfolio innovativeness. Specifically, the relationship between CEO risk-taking propensity and new product portfolio innovativeness is weaker if levels of ownership by TMT family members are high (high SEW). Additionally, the effect of CEO risk-taking propensity on new product portfolio innovativeness is stronger in family firms at earlier generational stages (high SEW). This result suggests that if SEW is a strong reference, family firm-specific characteristics can affect individual dispositions and, in turn, the behaviors of executives. Therefore, this study helps extend the knowledge on the determinants of new product portfolio innovativeness of family firms by considering an individual CEO preference and the organizational context variables of family firms simultaneously.

Innovations in Small and Medium-Sized Family Firms

Small and medium-sized firms are a prevalent organizational form in Germany. Their importance for the German economy is indisputable. Most of them are global market leaders in their niches and are considered to be a force for innovation in the German economy. The ability to be innovative in niche markets has been identified as the antecedent of their strong, or even dominant, competitive positions in their industries. The driver of this innovation success may well be the family, which distinguishes family firms from non-family firms. Nils Kraiczy analyzes if a family influences innovation in a family firm and if this influence has only positive effects. The dissertation focuses on the impact of top management teams on innovations interacting with family firm-specific characteristics. The author shows the complexity of family influence by presenting different effects of each investigated family firm-specific characteristic on the relationship between top management team behavior and innovation.

Ready for a crisis? How supervisory boards affect the formalized crisis procedures of small and medium-sized family firms in Germany

Overcoming a crisis situation in which the socioemotional wealth (SEW) of a family is at risk can be threatened by a lack of formal crisis procedures, which can increase the probability of organizational decline. Thus, not being prepared for a crisis situation may be a critical factor in the long-term survival of family firms. From a corporate governance perspective, supervisory boards may achieve higher levels of crisis readiness. Applying the resourced-based view and SEW theory, we analyze the relationship between family ownership and formalized crisis procedures in 150 small and medium-sized German firms. Our results show that formalized crisis procedures decrease as family ownership increases. Including supervisory boards in our analysis, we find a significant moderating effect of supervisory boards on the relationship between family ownership and formalized crisis procedures. Specifically, our results suggest that family firms with supervisory boards show similar levels of formalized crisis procedures as non-family firms with supervisory boards. In contrast, family firms without supervisory boards exhibit lower levels of formalized crisis procedures compared with non-family firms without supervisory boards. We also discuss managerial implications, limitations, and future research.

Taking Root in the Silicon Forest: High-technology Firms as Surrogate Universities in Portland, Oregon

Most case studies of successful high-technology industry regions highlight the role of research universities in fostering regional economic development. The Portland, Oregon, region managed to root a thriving high-tech industry in the absence of this critical factor. In this article, I present a case study of the evolution of Portland's high-tech industry and propose that high-tech firms can act as surrogate universities that attract and develop labor, create knowledge, and function as incubators for startups. I conclude that planners working to develop high-tech industries in regions without major research universities should attract R&D-intensive firms, maintain information on key busineses and entrepreneurial ventures, support an innovation milieu, and set realistic goals.

Segmentation and Segregation Patterns of Women-Owned High-Tech Firms in Four Metropolitan Regions in the United States

Mayer H. Segmentation and segregation patterns of women-owned high-tech firms in four metropolitan regions in the United States, Regional Studies. The number of women starting and owning a business has increased dramatically and female entrepreneurs are entering non-traditional sectors such as high technology, construction and manufacturing. This paper investigates the trends in high-tech entrepreneurship by women in four US metropolitan regions (Silicon Valley, California; Boston, Massachusetts; Washington, DC; and Portland, Oregon). The research examines the sectoral and spatial segmentation patterns of women-owned high-tech firms. Although women are entering non-traditional sectors, the research finds that women entrepreneurs tend to own businesses in female-typed high-tech sectors. In established high-tech regions like Silicon Valley and Boston, male-typed and female-typed women-owned high-tech firms differ significantly in terms of sectoral and spatial segmentation regardless of firm age. While differences between male-typed and female-typed firms are not significant at the regional level for Washington, DC, the analysis shows significant intra-metropolitan differences for the female-typed high-tech firms. The paper concludes that sectoral and spatial segmentation are powerful dynamics that shape business ownership by women in high technology.

How Firms Make Friends: Communities in Private-Collective Innovation

When firms contribute to open source projects, they in fact invest into public goods which may be used by everyone, even by their competitors. This seemingly paradoxical behavior can be explained by the model of private-collective innovation where private investors participate in collective action. Previous literature has shown that companies benefit through the production process providing them with unique incentives such as learning and reputation effects. By contributing to open source projects firms are able to build a network of external individuals and organizations participating in the creation and development of the software. As will be shown in this doctoral dissertation firm-sponsored communities involve the formation of interorganizational relationships which eventually may lead to a source of sustained competitive advantage. However, managing a largely independent open source community is a challenging balancing act between exertion of control to appropriate value creation, and openness in order to gain and preserve credibility and motivate external contributions. Therefore, this dissertation consisting of an introductory chapter and three separate research papers analyzes characteristics of firm-driven open source communities, finds reasons why and mechanisms by which companies facilitate the creation of such networks, and shows how firms can benefit most from their communities.

Fertility-preservation counselling and treatment for medical reasons: data from a multinational network of over 5000 women.

Fertility-preservation techniques for medical reasons are increasingly offered in national networks. Knowledge of the characteristics of counselled patients and techniques used are essential. The FertiPROTEKT network registry was analysed between 2007 and 2013, and included up to 85 university and non-university centres in Germany, Austria and Switzerland; 5159 women were counselled and 4060 women underwent fertility preservation. In 2013, fertility-preservation counselling for medical reasons increased significantly among nullipara and women aged between 21 and 35 years (n = 1043; P < 0.001). Frequency of GnRH applications slowly decreased, whereas tissue, oocytes and zygote cryopreservation increased. In 2013, women with breast cancer mainly opted for tissue freezing, whereas women with lymphoma opted for GnRH agonist. Women younger than 20 years predominantly opted for GnRH agonists and ovarian tissue cryopreservation; women aged between 20 and 40 years underwent a variety of techniques; and women over 40 years opted for GnRH agonists. The average number of aspirated oocytes per stimulation cycle decreased as age increased (< 30 years: 12.9; 31-35 years: 12.3; 36-46: 9.0; > 41 years: 5.7). For ovarian tissue cryopreservation, removal and cryopreservation of fewer than one ovary was preferred and carried out in 97% of cases in 2013.

A multinational case-control study on childhood brain tumours, anthropogenic factors, birth characteristics and prenatal exposures: A validation of interview data.

Little is known about the aetiology of childhood brain tumours. We investigated anthropometric factors (birth weight, length, maternal age), birth characteristics (e.g. vacuum extraction, preterm delivery, birth order) and exposures during pregnancy (e.g. maternal: smoking, working, dietary supplement intake) in relation to risk of brain tumour diagnosis among 7-19 year olds. The multinational case-control study in Denmark, Sweden, Norway and Switzerland (CEFALO) included interviews with 352 (participation rate=83.2%) eligible cases and 646 (71.1%) population-based controls. Interview data were complemented with data from birth registries and validated by assessing agreement (Cohen's Kappa). We used conditional logistic regression models matched on age, sex and geographical region (adjusted for maternal age and parental education) to explore associations between birth factors and childhood brain tumour risk. Agreement between interview and birth registry data ranged from moderate (Kappa=0.54; worked during pregnancy) to almost perfect (Kappa=0.98; birth weight). Neither anthropogenic factors nor birth characteristics were associated with childhood brain tumour risk. Maternal vitamin intake during pregnancy was indicative of a protective effect (OR 0.75, 95%-CI: 0.56-1.01). No association was seen for maternal smoking during pregnancy or working during pregnancy. We found little evidence that the considered birth factors were related to brain tumour risk among children and adolescents.