Theoretical assumptions about family firm radical innovation

A growing body of research is concerned with radical innovation activities among family firms. During the last decade, the study of family firms and radical innovation has diffused into various research streams driven primarily by aspects of governance. The aim of this paper is to reconcile our understanding of current research findings about radical innovation and family firms by employing a structured literature review technique. After analyzing 39 articles from a cluster of top-ranked journals, we see that investigation of radical innovation and family firms are mainly located under the theoretical lenses of (1) resources, (2) agency theory, (3) behavioral agency theory and socioemotional wealth, and (4) drivers of the ability and willingness to innovate. By viewing radical innovation through these four lenses, we observe that radical innovation activities could be influenced by the level of family involvement in ownership and management, the family capability bundle (resources, knowledge, and experience), and family oriented goals. These matters are potentially inter-related because differences in ways family firms acquire resources, their susceptibility to various institutional factors, levels of ownership and control, and the presence of different family-oriented goals can alter the intentions, motivations, and ability to engage in radical innovation. We present urgent directions for future research, highlighting what key problems and gaps need urgent attention to advance our understanding of radical innovation in family firms.