Collage of Business and Economics

Department of Management
(MSc in Management Extension Program)
Article Review Assignment for the course Innovation Management and
Entrepreneurship

Reviewed By
Mikealay Desta
Id No GSE/5246/09
To
Instructor, Dr. Worku Tuffa
Date, May 11, 2017
Addis Ababa - Ethiopia
Article Review
The Product Innovation in Family versus Nonfamily Firms: An Exploratory Analysis
by Alfredo De Massis, Federico Frattini, Emanuele Pizzurno, and Lucio Cassia,
Journal of Small Business Management 53(1), pp. 136, 2015.

No reason at all, to review the article entitled on product Innovation in Family versus Nonfamily
Firms, but 1) just its worthy in my area of interest as innovation Management and
Entrepreneurship specialist compassionate in influencing the academic and practitioners scrutiny
and 2) as it explores the key differences of family product innovation process against Nonfamily
Firms by addressing the reasons following the emerged differences I found it very attention-
grabbing for reviewing and becomes my tough belief that it would be of impressive for learners
as well for practitioners too. Despite their roles played across the economy and bringing into
play technological innovations to save their competitive edge, Family business studies especially
technological innovation is still at an early stage; however there have been some developments in
this field. As per the article sought to define technological innovation is the acumen by which
firms can be able to conceive, design, construct, and launch a new product, service, or process
composedly despite the fact that it has different definitions. Therefore, technological innovation
is all about transformation, usually which can take product and process innovation forms
(Burgelman, Kosnik, and van den Pol 1988 cited in the paper (p. 1)). Alongside, the overlapping
nature of family firms commitment to ownership, governance, and management shapes the way
resources would be handled, settled on distinctive incentives, structured authority, and norms
endured which results in uniqueness over Nonfamily Firms to take advantages of the
technological innovation process. Through the unswerving use of the resource-based view,
agency, stewardship, and behavioral theories in its literature, this article found family businesses
as different from nonfamily ones in several aspects of product innovation, and portrays a
conceptual framework that should be mapped to mark the most important differences between
them regarding the product innovation process characteristics as well to address the contradicted
empirical evidence of which whether Family firms are less or more innovative than Nonfamily
ones is which remains its focus. The article trays to summarize the results of an empirical study
on the difference of Family and Nonfamily firms regarding their product innovation process
practices given a multiple case analysis conducted in five each Family and Nonfamily Italian
firms.
The findings of this study are found as steady with the theoretical views and previous empirical
studies showing that Family Firms are in many ways different from Nonfamily firms.
Conversely, the biographers choice to exercise the anatomy of Product innovation process
practicing variations in between the Family and Nonfamily firms makes it an exceptionally
dependable and relevant article for the wished for results. To the best of my understanding, its
exploration of theoretical guidances in making well-known about the topic and its easiest and
simplest presentation of facts are of which give birth the article to be easily communicable and
readable. Coming to the point , a very warmest issue that I have learned from this article is that,
1) the long-standing objectives/strategies of the family firms are differently positioned for the
product innovation process either that are aimed at enhancing and bringing incrementally
innovated products or Services, while also promoting an external outlook (open innovation)
strategy during their innovation process because as it can be reasoned out by Agency and
Behavioral views, family firms need a careful preservation of resources that reduces costly
experiment and the fear for protection of families socio-emotional wealth trim downs the
possibility of investing in completely new or radically innovative opportunities unlike to the
Nonfamily ones. 2) The ownership and management alignment results in cost-consciousness of
family firms (agency theory) are their exceptional human and social capital traits which promote
a higher motivation, cohesiveness, and commitment, the easier communication and information
exchange, and the closer relationships between individuals during the product innovation
process. Thus, they are seen using a functional organization of resources involved in the product
innovation process rather than cross-functional structure team which is applicable in the
Nonfamily firms. In addition, the autonomous motivation, collective orientation, and high trust
of family firms characterize individuals with high Decisional Autonomy in bringing
innovational glues versus to nonfamily firms. 3) To the last but not least, Family Firms mostly
uses informal and unstructured processes to administer product innovation projects in which the
presence of persistent behavior, attitude, and feelings developed due to the owner-manager
authority within the family climate forces them to do so. And mostly Family Firms are risk
averse. By saying this, understanding of Family firms technological leveraging towards Product
innovation process helps to call for firms contribution across the wide economy of countries
while at the same time promoting a culture of innovation which fits them. However,
technological innovation studies of Family business is still at an early stage and even this article
including the previous studies have been conducted in developed country contexts its
applicability for far developing countries like Ethiopia is worthy too and can be mainstreamed as
a base. The exploratory finding of this article is also looking forward to being hopefully
encouraged by family business managers and product innovation academicians if the results can
be statistically communicable at all. On the other hand, this article is recommended for scholars
and practitioners who got in this area of interest.

Further Reading

Poza, Ernesto J. (2004). Family Business by Ernesto J. Poza, 3rd edition,

South-Mason: OH, Western, CENAGE Leaning

Carlock, R.S., & Ward, J.L. (2001). Strategic planning for the family
business: Parallel planning to unify the family and business. London:
Palgrave.

Mari I. (2014). challenges and opportunities of family businesses: Turku

university of applied sciences