06. October 2017 / Permalink / Short URL
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How can Family Businesses survive disruptive industry changes?

Julia K. de Groote presented her conjoint work with Werner Conrad and Andreas Hack at the 21th Annual Interdisciplinary Conference on Entrepreneurship and Innovation October 5th – 6th, 2017, University of Wuppertal (Germany). 

The presented study investigates how firms within an industry with very specific industry characteristics address disruptive innovation and which mechanisms lead to more or less success. The industry in question is the mail order industry, which is characterized by a high proportion of family firms and a low level of innovativeness. The core business model of the industry was once a disruptive innovation itself and is mentioned in Christensen’s (1997) seminal work on disruptive innovation. In its early days, ordering goods by mail was highly innovative and posed threats to established retailing businesses. The mail order business represents a form of retailing that has grown significantly due to e-commerce and has gained importance in the last few years. Firms in the traditional mail order industry had decades of experience in logistics, purchasing, and marketing. Therefore, on the one hand, one could expect that with the emergence of the Internet, such firms should have had a head start compared with new market entrants and should have grown their businesses and remained market leaders. On the other hand, Christensen’s (1997) theory of disruptive innovation would predict the downfall of the traditional mail order firms. The present study examines more closely how the industry coped with the changes and identifies influence factors affecting the more or less successful coping with this discontinous technology. The specific characteristics of family firms, their familiness, can be expected to influence how such firms address disruptive innovations (König, Kammerlander, & Enders, 2013).

The study sets out to provide an empirically based understanding of how family firms react to innovative disruptions in their industry and reveal which mechanisms lead to success or failure in this context.

The analysis of the interviews and secondary data leads us to the conclusion that two main mechanisms can be identified that influenced the perceptions of and based on that the actions taken by the incumbents of the mail order industry. We find that within the firms, path dependencies influence the exploitation ability of the firms, whereas perception filters influence their ability of exploration.

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Christensen, C. M. 1997. The innovator’s dilemma. Boston: Harvard Business School Press.

König, A., Kammerlander, N., & Enders, A. 2013. The family innovator’s dilemma: How family influence affects the adoption of discontinuous technologies by incumbent firms. Academy of Management Review, 38(3): 418-441.

Julia K. de Groote
Julia K. de Groote
conducts research on thematic thinking at the University of Bern (Bern, Switzerland) and is author of "Using Thematic Thinking to Achieve Business Success, Growth, and Innovation".

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