ORGANISATIONAL AMBIDEXTERITY IN FAMILY-MANAGED FIRMS: THE ROLE OF FAMILY INVOLVEMENT IN TOP MANAGEMENT
KAMMERLANDER WHU Otto Beisheim School of Management
PATZELT Technical University of Munich
BEHRENS Solvay Brussels School of Economics and Management
RÖHM Technical University of Munich
How does adding non-family managers to family boards affect innovation? According to a journal article in Family Business Review, this depends on the mix of family and non-family managers and the type of innovation pursued. Exploitative innovation focuses on incremental quality and efficiency improvements, while explorative innovation is more radical in nature and entails discovering opportunities for new products and services.
In a study amongst German family-managed firms, researchers found that homogenous teams consisting of either only non-family managers or only family managers are best for pursuing exploitative innovation. Mixed teams of family and non-family managers are most effective for pursuing explorative innovation. A high focus on family-centered non-financial goals of the CEO might also hamper innovation and harm the benefits of mixed teams for explorations.
Implications for family enterprises:
Family CEOs should outfit their management teams to correspond to the type of innovation strategy (exploitative or explorative) that it seeks to pursue. Beyond mixed team composition, family CEOs should critically reflect on their own family-centered non-financial goals and how it may impact decision making in their firm, to prevent interrupting effective team work.
Source: Kammerlander, N., Patzelt, H., Behrens, J., & Röhm, C. (2020). Organizational ambidexterity in family-managed firms: The role of family involvement in top management. Family Business Review, 33(4), 393-423.