A Study of Relationships in Family Firms

Lien Beck, Wim Janssens, Tinne Lommelen, all of Hasselt University, and Marion Debruyne, of Vlerick Management School, published “A Study of the Relationships Between Generation, Market Orientation, and Innovation in Family Firms” in the May issue of Family Business Review. Lien Beck kindly provided some background on the article.

Who is the target audience for this article?

Our study investigated the relationships between the generation in control of the family firm, market orientation and innovation which makes that there are two target audiences. The first target audience are the family business owners and family business scholars. They will likely appreciate the insight that family firms’ market orientation is influenced by the generation in control of the firm. The study shows that market orientation diminishes in later generation family firms, meaning that later generation devote less attention to customers and the market, which is detrimental to their firm’s innovation success. We hope that this study make family firm owners aware of the important role of being market oriented and inspire family business scholars to do more research on market orientation to fully capture its role in family-owned businesses. The second target audience would be market orientation scholars. This study makes a contribution to the refinement of the market orientation concept and by what it is influenced.

What inspired you to be interested in this topic?

This article is a section of my (Lien Beck) dissertation. The main topic of my doctoral study is market orientation. I’m a staff member of KIZOK, a research institute of Hasselt University, which has its research focus on entrepreneurship, innovation and family-owned businesses (www.uhasselt.be/KIZOK). A lot of my colleagues are doing research on different topics concerning family firms. Thus, I know how distinctive family firms are in comparison with non-family firms. This made me curious about the execution of market orientation in family firms.

Were there findings that were surprising to you?

Very surprising. We thought that market orientation will be higher in subsequent generation family firms, however the opposite is true. Thus, the study’s findings suggest that there is a tendency for owners in later generation family firms to pay less attention to customers and the market, and that this inward focus is detrimental to their firm’s innovativeness. This unexpected finding led to an additional contribution to the family business literature. Namely, the diminishment in market orientation after the family firm has surpassed the first generation could be a possible explanation for the small number of successful family firm succession. More research will be needed in this area to fully capture this.

How do you see this study influencing future research and/or practice?

Our study provides evidence that market orientation is influenced by some unique characteristics of the family firm. Future research could investigate which specific aspects of the generation in control affect market orientation, but could also look at other possible influences of specific family firm characteristics on market orientation. Next, it would be interesting if future research could investigate if the diminishment in market orientation in later generation family firms our study found contributes to the small number of successful family firm successions.

How does this study fit into your body of work/line of research?

With my (Lien Beck) doctoral study, I have the intention to investigate interesting and relevant gaps concerning research on market orientation to make a contribution to the refinement of this concept. One of these interesting gaps was to investigate market orientation in a family firm context. Market orientation is influenced by organizational characteristics and is found to be a product of a firm’s culture. Since family firms differ from non-family firms regarding their organizational characteristics and culture, investigating market orientation in a family firm context is relevant, both for increasing the understanding of family businesses as for refining the market orientation concept.

How did your paper change during the review process?

This article changed radically during the review process. The reviewers and editors gave us valuable comments and suggestions to strengthen the manuscript. This led to a major change in the article’s focus and title. Based on the reviewers’ suggestions, we put the main focus on the direct impact of the generation in control on market orientation, but we also maintained the relationship between market orientation and innovation since this relationship shows how important market orientation is for family firms. We are convinced that these changes resulted in a greater contribution towards family business research.

What, if anything, would you do differently if you could go back and do this study again?

If we could go back to do this study again, we probably would have collected more data about other specific family firm characteristics. For instance, characteristics of the owner, the number of family members that are working in the company, etc..

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