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KM in family firms (Entrepreneurship and Dynamic Capabilities: A Review,…

- - - - Coordination, selection and combination are important dimensions of the process of integration; these enable the ﬁrm to build its dynamic capability to reconﬁgure their substantive capability routines. Coordination involves formal and informal efforts to resolve disputes, disagreements, or conﬂicts about the nature and scope of capabilities to be built and how to obtain needed resources (Zahra and Nielsen, 2002).
      - Selection induces coherence through the identiﬁcation of those capabilities worthy of further reﬁnement and development.
      - The combination of these different capabilities occurs once coordination and selection have occurred
  - - - It is likely that even when ﬁrms are being marginally outperformed by competitors, self-serving bias and hubris (Campbell and Sedikides, 1999, Kroll et al., 2000) will cause them to attribute lack of success to luck or factors outside their control
    - - McGrath (1995) has noted that, for ﬁrms in her study, change was spurred by failure via a three step process
        
        Recognition of failure
        
        Interpretation of results as failure
        
        adjustment of capabilities
  - - - Cyert and March (1963) observe that when the environment is volatile, organizations are likely to alter their goals, priorities (‘attention rules’), and where and how they search for new knowledge and opportunities (‘search rules’).
      - Operating in volatile environments where change is common and/or rapid, such as in high-technology industries, will cause ﬁrms to be aware of the need to repeatedly reconﬁgure substantive capabilities (whether by preconceived plans or spur-of-the-moment responses) in order to compete
    - - Majumdar (2000) concluded in his study of the telecommunications industry over 16 years that, contrary to myths regarding the depth of inertia in larger ﬁrms, even larger more stable ﬁrms can and do transform in the face of huge structural changes
  - - - involves planning to utilize part of the ﬁrm’s ‘bag of tricks’ to learn how it should proceed in the future.
      - it appears that trialand-error-learning would increase in usage over the early stages of the ventures’ life as it builds knowledge, routines, and slack resources. However, given the non-systematic nature of its utilization (Miner et al., 2001), we would expect the use of this mode of learning to level off or decrease over time as ﬁrms’ processes and knowledge become more structured
  - - - Managers are apt to focus also on leveraging what their companies are already doing while stretching the uses of given capabilities into new ﬁelds (Hamel and Prahalad, 1994).
      - Miner et al.’s (2001, p. 319) note that in experimental learning, ‘inputs are deliberately varied and contexts compared so outcomes can be attributed to inputs...Reﬂection is high because observing outcomes under varied conditions is the goal.’
  - - - The truly novel and unexpected is much more likely to emerge when the ﬁrm opens itself to learning from unstructured, external stimuli (Zahra and George, 2002a).
      - Aldrich (1999) notes that processes emanating out of the lack of knowledge may produce the greatest variations.
  - - - if a ﬁrm rarely has need to change substantive capabilities because its market or technological environment is stable, its performance may be harmed if it expends signiﬁcant resources to develop change capabilities
      - if the environment is highly volatile, frequently and unpredictably necessitating changes in substantive capabilities, the potential value of dynamic capabilities can be quite high
- - - - in all the successors’ profiles we can identify family embeddedness and the need for achievement as antecedents of affective commitment, being then associated with high levels of identification with the family firm (e.g., Schröder et al., 2011) and with the perception that the next-generation career interests are aligned with the opportunities offered by the family business (Dawson at al., 2015).
      - Normative commitment may arise from family support and be reflected in the willingness to preserve family socioemotional endowment (absence Of risk propensity), such as in the case of Conservative Successors but also among the Supported founders
  - - - Conservative successors, the preservation of socioemotional wealth, associated with the extensive socialization with the family firm context, tends to be a priority. This Is reflected in the absence of risk-taking attitude, which, in ordinary conditions, indicates a cautious posture toward the threat of loss in the socioemotional endowment (e.g., Schulze & Kellermanns, 2015).
      - For the Gambler profiles, family embeddedness is still important. However, the presence of risk-taking propensity indicates that these successors in their entrepreneurial experience may be willing to trade their current socioemotional wealth with prospective financial gains, engaging in more hazardous strategies (GomezMejia et al., 2018), As indicated by the follow-up analysis at the firm level.
  - - - The absence or irrelevance of family support and/or the lack of family firm–specific human capital may stimulate the proactive search of other sources of support in the form of external experience aimed at acquiring skills and network ties (it is the case of both types of founders and of the Returning Successor).
  - - - high levels of family embeddedness. In particular, in this configuration family embeddedness is combined with Achievement goals, suggesting that the career path in the family business is perceived to be in line with the successor’s aspirations. human capital dimensions of formal education and experience outside the family business are, respectively, not relevant and absent core conditions. This justifies the attribute “conservative” for this type of successors, as the lack of external experience and possibly of formal education tends to lower their levels of entrepreneurial proactiveness and capacity to recognize opportunities (Corbett, 2007; Davidsson & Honig, 2003; Sardeshmukh & Corbett, 2011). It is nevertheless important to note that these conservative Features of this profile do not prevent the pursuit of innovative strategies at the company level. Several Of the firms led by these entrepreneurs present a strategy that emphasizes product innovation and R&D investments as key features of the company strategy
    - - Similar in many respects to the Conservative type, this profile deserves a specific attention as it exhibits formal education as present core condition, which, paired with previous experience in the family business, represents the recommended combination in the literature on succession training (e.g., Cabrera-Suárez, 2005; Harvey & Evans, 1994). Such successors obtained university degrees in business administration, law, or engineering, which over-all respond to the need to strengthen the management and business-related skills of the family (Dyer, 1989) and to stimulate a process of transgenerational professionalization in the company (Brumana, Cassia, De Massis, Discua Cruz, & Minola, 2015; Dekker, Lybaert, Steijvers, Depaire, & Mercken, 2013). Qualified successors experience an entrepreneurial environment that combines formal competences with family embeddedness and family business exposure, and this indicates that those qualified successors perceive the opportunity to take over the family business as a means to fulfill both their identification needs and their professional career expectations (Dawson Et al., 2015; Salvato, Minichilli, & Piccarreta, 2012).
    - - are characterized by family business experience as a core condition. In Combination with the presence of risk propensity and financial goals, these determinants suggest a “mixed gamble” motivation behind the decision to succeed. According to the “mixed gamble” view on socioemotional wealth proposed by Gomez-Mejia et al. (2014), family members, when making decisions under risk, are not always loss-averse with respect to the socioemotional wealth endowment; they can also consider the possibility to trade current socioemotional wealth with prospective (and uncertain) financial gains, especially when such financial gains may guarantee the future well-fare of the family and the viability of the business (Gomez-Mejia, Patel, & Zellweger, 2018).
        
        Returniing gamblers
        
        The Returning Gamblers join the family firm after an external experience. They also possess family firm–specific human capital, owing to their previous experience, but the support of the family is not relevant. Follow-up observations of the cases indicate that such successors took on the leadership role after the serious illness or sudden death of the previous family leader or without the collaboration of their parents or siblings, who wanted to sell the business instead. The Returning Gamblers are also risk takers, but they are not necessarily supported by the family system. The succession decision, therefore, implies the redefinition of the family orientation and influence over the business. The follow-up analysis of the Returning Gambler profiles suggests a similarity with Kroeger’s (1974) Reorganizer/Efficiency-seeking successor, and is consistent with some of the findings of the research on “unexpected succession” carried out by ChalusSauvannet, Deschamps, and Cisneros (2016). The route chosen by the Returning gambler appears to be rather difficult.
        
        Embedded gamblers
        
        Embedded gamblers have strong support from the family, experience inside the family business, and weak profiles in terms of individual human capital. The decision to take over the family firm may, therefore, be encouraged by the willingness to renew the business and by the endorsement from the family network. This condition indicates a positive intergenerational climate, which is crucial to sustaining the innovative effort by the next generation (e.g., Hauck & Prügl, 2015). This Type of successor mirrors the profile of the “innovative change agent” conceptualized in the seminal work by Kroeger (1974) and characterized by a strong vision (which could be supported by the need for achievement appearing as present condition in this configuration) and risk-taking, and the “Reformer” successor type defined in Lefebvre and Lefebvre (2016) as a “modernization agent.”
    - - The Supported Founder is characterized by the presence of family support. Hence, among these next-generation members, the decision to start up a new venture is encouraged by the facilitated access to resources provided by family and kinship networks (Steier, 2009). Concurrently, experience outside the family business strengthens individual human capital and increases the expected returns from the creation of a new business (Douglas & Shepherd, 2002). The absence of previous professional socialization in the family business context further contributes to the founding decision, as it strengthens the self-affirmation attitude (Schröder et al., 2011; Zellweger et al., 2011). NVFs belonging to this configuration, however, may be not completely independent in their entrepreneurial experience, given the importance of family support. Family support for potential entrepreneurs often incorporates the implicit or explicit obligation to “return the favor” (Sieger & Minola, 2017).
      - The need to reciprocate may also lead to a cautious posture toward risk (risk propensity is an absent condition in this configuration), which is motivated by the feeling of responsibility in the use of family resources and, in some sense, mirrors the attitude to preserve the socioemotional wealth that we observed among the Conservative Successors.
    - - The Independent Founder is characterized by the complete absence of family embeddedness conditions, such as family support and experience in the family business, that can limit the sense of obligation toward the family business. Instead, This state might indicate a desire of independence and the refusal of the entrepreneurial role model in the family (Criaco et al., 2017; Kets de Vries, Carlock, & Florent-Treacy, 2007).
      - The presence of risk propensity combined with the presence of financial goals signals a strongly independence-driven posture. These conditions are opposite to those observed among the Supported Founders and suggest that the decision to start up a new business responds to the desire to “break free” from the family tradition and develop a personal identity (Stavrou & Swiercz, 1998), but might be also inspired by the motivation to demonstrate entrepreneurial skills without any involvement of the family, through the pursuit of risky projects, which lead to financial success and extrinsic recognition (e.g., Carsrud & Brännback, 2011).
- - - - family-centered economic goals (FC-E)
        
        typically emphasized by family members committed to keeping company control in the hands of the family and to generate various forms of wealth for the family
      - family-centered noneconomic goals (FC-NE)
        
        preserving harmony within the family, promoting family social status and reputation, and maintaining a link between the family and the business identity
      - nonfamily-centered economic goals
        (NFC-EC)
        
        indicators of economic performance such as growth, survival, and proﬁt
      - nonfamily-centered noneconomic goals (NFC-NE)
        
        goals intended to satisfy other stakeholders than the family and were not related to economic aspects.
  - - - bargaining mode (i.e., what they do), and stabilization of their goals (i.e., how they formulate organizational goals). Bargaining was observed when organizational members conveyed interpersonal interactions in the form of either settlements or disputes. Settlements consisted in negotiations of goals among two or more organizational members with symmetrical inﬂuences.
      - dispute: a more inﬂuential party (either individual or subcoalition) imposed goals on a weaker party during a verbal ﬁght.
  - - - is a common mindset and a joint psychological state among family ﬁrm organizational members in terms of their feelings of loyalty to the family and the desire to invest mental and physical
        energy in helping to achieve family-centered goals.
        
        The higher the reliance on professional social interactions, the lower the collective commitment to family-centered goals
        
        In professional interactions, the family-centered goals are bargained but are rarely stabilized (see Table 4), and goal diversity is not resolved as individuals remain anchored to their own goals and refuse to put their efforts into accomplishing family-centered goals.
        
        the higher the reliance on familial social interactions, the greater the collective commitment to family-centered goals.
        
        familial interactions were often followed by stabilization mechanisms in the form of social controls, which guided individuals to adjusting their own goals, to change their psychological state and to express commitment to family centered goals.
        
        the formation of family-centered goals in family ﬁrms is favored by familial social interactions during which family members create
        norms of behavior that are consistent with the family vision, increasing organizational member commitment to family-centered goals. As a consequence, commitment to familycentered
        goals becomes more homogeneous with recurring familial social interactions among organizational members that are repeated over time
- - - - Socialization helps move knowledge in tacit form between individuals, externalization is the application of tacit insights on an outside entity (for example work), combination represents the act of synthesizing explicit pieces of knowledge, and ﬁnally internalization is the process whereby one increases their knowledge by learning from external events
      - in SMEs there is lack of explicit knowledge repositories such as an intranet tool for sharing knowledge or large databases. Instead, each manager/owner acts as the knowledge repository. Since the repository is private, acts of combination are also conducted privately. Knowledge becomes part of the organization’s fabric when it is socialized from the manager to the employees, seldom does knowledge move the other way, i.e. from employee to manager.
  - - - in SMEs, we were pleasantly surprised to see the prominence of common knowledge in
        terms of both depth and breadth.
        
        An outcome of having ‘‘common knowledge’’ is the speed of knowledge transfer.
        Ishin-Denshin, is a Japanese term, can be roughly translated to ‘‘presence of tacit
        understanding between communicators and signiﬁes the speed of knowledge transfer that
        will occur if communicators share the same context’’.
- - - - Salvato and Melin and Chirico and Nordqvist (2010) found that teams of family members are more entrepreneurial (in terms of product-line extension, product diversiﬁcation, expansion into
        new markets, adoption of new technology) when they identify and understand how their knowledge and perspectives are complementary (see also Arregle et al.; Yli-Renko, Autio, & Sapienza, 2001).
    - - due to close interaction among family members, the family ﬁrm structure facilitates the recognition, assimilation, and use of the tacit elements of specialized knowledge held by family members (Rothaermel & Hess, 2007; Tiwana, 2008; Zahra & George, 2002).
      - family members typically develop a common system of meanings (language, words, expressions, and body movements), which is necessary to exploit multiple forms of knowledge (Grant, 1996a)
        
        allows family members to identify and understand information easily and to perform speciﬁc tasks or activities efﬁciently and rapidly through predictable patterns of collective behavior (Nahapiet & Ghoshal, 1998; Sirmon & Hitt, 2003)
      - family relationships are developed through a history of interactions that fosters shared values, cooperative norms, and a sense of reciprocity and mutual respect.
        
        family members value each other’s ideas and perspectives as they attempt to solve problems and capture opportunities (Arregle et al.,2007; Salvato & Melin, 2008; Sirmon & Hitt).
  - - - Chirico and Salvato (2008) argue that family members’ affective commitment toward change has the potential to affect the development of new PD capabilities through knowledge integration
      - when family affective commitment is high, family members will do their best to identify and understand family members’ unique knowledge and to exploit it collectively to achieve PD outcome
  - - - Entrepreneurial families tend to recognize and codify a shared understanding of who knows what within the family, or a family’s transactive memory system—TMS (Lewis & Herndon, 2011; Salvato & Melin, 2008). It lets the controlling family leverage the expert knowledge residing in the group as if it were stored and retrieved by the family, rather than by its individual members.
      - later generations in control tend to increase the professionalization and formalization of social relationships, knowledge management, and key entrepreneurial processes, thus increasing the collective understanding and use of knowledge in the ﬁrm (Casillas et al., 2010; Kellermanns et al., 2008; Stewart & Hitt, 2012).
      - succession processes help family members balance and combine their ﬁrm-speciﬁc human capital, which is rooted in social ties within the organization (Sardeshmukh & Corbett, 2011).
- - - - IT operations regard a ﬁt between IT-based resources and business processes, supporting the management of inside and outside knowledge (Crawford et al., 2011)
  - - - internal commitment has been pointed out as a
        key prerequisite for collaboration and knowledge sharing (
        Palacios-Marqués et al., 2015b;
        Soto-Acosta et al., 2014).
  - - - However, although knowledge is a key resource with high strategic potential, Laursen and Salter (2006) suggest that without effective KM systems ﬁrms cannot fully take advantage of outside knowledge, facilitating only incremental innovation instead of radical innovation.
    - - KM capability is dynamic in the sense that it permits ﬁrms to dynamically manage their knowledge bases by reconﬁguring and realigning the processes of knowledge exploration, retention and exploitation inside and outside the ﬁrm (Lichtenthaler and Lichtenthaler, 2009).
      - KM capability determines which knowledge is appropriate for being incorporated into the knowledge bases of ﬁrms. KM capability could minimize the detrimental outcomes of
        over-searching the external environment.
  - - - There is a positive relationship between environmental dynamism and open innovation.
    - - Environmentaldynamismstrengthensthepositiveeffectofknowledgemanagement
        capability on open innovation.
- - - - the limited cognitive diversity of the family firm’s overall human resource base induced by their lower attractiveness toward external talent limits the breadth of combinatory opportunities that the firm is able to identify and pursue the large technological distance between the familyfirm’s knowledge base and many of those “breadth-induced” Combinatory opportunities may render family agents rather unwilling to pursue these opportunities (Basco & Calabrò, 2016; Chrisman, Chua, De Massis, Frattini & Wright, 2015), as they do not want to give up their perceived control over the firms technology trajectory toward outsiders
  - - - Interorganizational trust therefore tends to be a more important determinant of the willingness to engage in open knowledge exchange for family as opposed to nonfamily firms (Arrègle et al., 2007; Hadjielias & Poutziouris, 2015; Lambrechts et al., 2017; Lester & Cannella, 2006; Roessl, 2005), and hence, deep rather than broad search strategies are more likely to encourage effective knowledge exchange of family firms.
      - as opposed to the more technologically distant combinatory opportunities identified through broad search, the exploitative nature of the opportunities generally arising from deep search should allow family firms to build on their own competences to a larger degree
        
        family firms are better able to take a leadership role in collaborative innovation projects based on deep search and, hence, should experience a greater perceived control over the technology trajectory (Lambrechts et al., 2017).
      - many of the interorganizational knowledge activities of family firms are based on stakeholder relationships that are deeply embedded in the owning family and its individual members (Arrègle et al., 2007). This family-embeddedness of stakeholder relationships should further increase the level of mutual familiarity with collaboration partners’ processes and technologies that is of critical importance for the successful codevelopment of efficiency-oriented exploitative innovations.
        
        deep rather than broad search efforts should enable family firms to leverage their “deeper” yet highly family- and firm-specific internal knowledge base (Chirico & Salvato, 2016; De Massis, Kotlar, et al., 2016; Patel & Fiet, 2011), as the aforementioned greater mutual familiarity between family firms and trusted long-term partners will unlock a plethora of exploitative combinatory opportunities.
- - - - This implies that the most competent workers will be underrepresented among the nonfamily members who seek employment in family firms.
  - - - Due to potential loss of socioemotional wealth family firms may only hire nonfamily members when they expect increased economic returns from doing so
      - noneconomic goals may indirectly explain why nonfamily members may be more productive than family members in some circumstances, particularly when considering upper-level management (cf. Lee et al., 2003; Pérez-González, 2006).
- - - - Inventor syndrome
        
        Great incentive for individual creativity thanks to the founder’s decision to invest in his employees
        
        Difficulty in selecting ideas that are crucial for the company
    - - Lack of intra-firm formalization
        
        Dfficulties to monitor and communicate competences among employees
        
        lack of formal communication channels to let everyone know each other´s activities
        
        Focus on informal meetings
      - Parteners´ selection
        
        Difficulty in finding partners who share the same language
        
        Difficulty in finding parteners who share the same family values
        
        Difficulty in building trust with outside parters
        
        Difficulty in aligning family interests with local university partners
      - Lack of formal intern-firm knowledge transfer mechanisms
        
        Scarse use of formal IP (intelectual property) protectin
        
        No out-licensing
        
        Willingness to maintain control over technological trajectories
  - - - Infusing the firm´s knowledge search process
        
        The founder transfer to his employees a method towards innovation
        
        the company must look for customers that are number one on the market
        
        people should pay attention to local resources as a source of innovation
        
        each individual should consider the ﬁrm as a social good. The ﬁrm is in fact responsible for local development and has a role in society
        
        the family approach is fully understood by employees and they know the family firm´s values
        
        allows the family approach to be fully understood and reduces the risk of low integration of knowledge ﬂows due to rejection or lack of understanding of family values, cultural gaps and ineffective information transfer from the family to the business circle
        
        family values are infused into every aspect of the family ﬁrm and conveyed to every
        member.
        
        Energy
        
        the passion and motivation at the base of any “knowledge company”
        
        Responsability
        
        acting based on the awareness that everything that is done now has a consequence on the future
        
        Imagination
        
        the ability to look forward: according to Enrico Loccioni, this requires looking beyond what is currently being seen to create the future
        
        Tradinnovation
        
        stresses the importance of linking tradition in terms of the rural culture and experiences that characterize each local context to innovation.
      - Warranting the transmission of family values
        
        Strategic longer-term decisions are taken by the famiy
        
        The word proﬁt comes from the Latin verb pro-facere that means “in order to continue to do”. Consequently, for us, proﬁt means creating wealth for future generations, and we reinvest this wealth in the ﬁrm in such a way that the ﬁrm continues to pursue its activities. This proﬁt is reinvested in the territory in order to make the world better.
        
        This is evident when considering that the family makes strategic longer-term decisions, thus maintaining control over the ﬁrm’s technological trajectory. These decisions are taken with the help of the TMT. Put differently, the “not-sold-here” syndrome prevails for all technologies that are considered “distinctive” (Di Minin et al., 2010; Prahalad and Hamel, 1990).
        
        family as "imprinting" problem solver
        
        the family is always present within the ﬁrm and remains committed to solving critical issues when they arise. The family does not act as a “coercive” problem solver but rather an “inspiring” problem-solver.
        
        employees make decisions not because a family member says they must (coercively) do something but because the family member serves as the trigger for a new, deeper and more conscious decision-making process
      - values
    - - Sharing and disseminating past experiences
        
        stories about innovation
        
        Communicating past experiences eases the information ﬂow by supporting the creation of innovation memories.
        
        Loccioni’s managers strongly believe that storytelling not only creates a memory of innovation but also is a tool to connect individuals.
        
        The family is not at the core of the stories, bit family members set the narrative into motion
        
        Examples linked to succesful and unsuccesful cases
        
        Innovation without an archive is not innovation. A percentage of the things that we are doing have already been done. But we need to be curious. Consequently, the archive represents the basis for searching things that have been done in the past, in different contexts.
        
        Recently, the ﬁrm introduced what they call “pillole serali” [evening pills]. On average once a week for 30-45 minutes, employees are invited to listen to colleagues who share their experiences and knowledge about a speciﬁc topic, which may be technology-, corporateor market-related.
      - Delegation to (non) family members
        
        The family delegates to both family and nonfamily members
        
        more flexibility in decision making
        
        autonomy and responsability are granted
        
        knowledge transfer is facilitated by delegation mechanisms rendering the ﬁrm more ﬂexible and quicker in dealing with the dynamic markets it competes in.
      - Establishing a trustful netwolk of partners
        
        create networks with (past) customers/stakeholders vis ad hoc projects
        
        Attention to the development of local connections
        
        Support of spinoffs and intrapreneurship
        
        These spinoffs are a means of transferring the family ﬁrm’s culture beyond its boundaries. As emerged during the interviews, these ﬁrms share the family’s values and led to developing trustful relationships between Loccioni and external partners.
      - Unique social capital
- - - - The ability to exercise authority vested in family members can emanate from a strong ownership position, from an ascribed status, or from personal charisma. control and influence are an integral part of SEW and highly desired by family members (Zellweger, Kellermanns, et al., 2011).
      - to achieve the goal of preserving SEW, the family members require continued control of the firm.
    - - the intermeshing of family and business gives rise to an inherently unique identity within family firms (e.g., Berrone et al., 2010; Dyer & Whetten, 2006). The identity of a family firm’s owner is inextricably tied to the organization that usually carries the family’s name. This causes the firm to be seen both by internal and external stakeholders as an extension of the family itself.
    - - Recent research by Cruz, Justo, and De Castro (2012) argues that SEW provides kinship ties with some of the same collective benefits that arise in closed networks, including collective social capital, relational trust (Coleman, 1990), and feelings of closeness and interpersonal solidarity (Uzzi, 1997).
      - The reciprocal bonds seen within family business are not exclusively between family members but are likely to be extended to a wide set of constituencies (Miller, Jangwoo, Sooduck, & Le Breton-Miller, 2009).
      - As Brickson (2005, 2007) argued, given these reciprocal bonds in family businesses, one would expect these firms to pursue the welfare of those who surround them, even if there were no obvious transactional economic gains in doing so. Berrone et al. (2010) argued that family firms are deeply embedded in their communities and often sponsor associations and activities that are valued in the community
    - - in organizations where family relationships dominate, there is a longer history and knowledge of shared experiences and past events that converge to influence and shape current activities, events, and relationships.(social capital)
      - emotions result from daily situations and are not static, as they emerge and evolve through more or less critical events in each family business system (succession, divorce, illness, family or business loss, economic downturn, etc.; Dunn, 1999; Gersick, Davis, Hampton, & Lansberg, 1997; Shepherd, Wiklund, & Haynie, 2009).
        
        Because the boundaries between family and corporation are rather blurred in family businesses (Berrone et al., 2010), emotions permeate the organization, influencing the family business’s decision-making process (Baron, 2008).
      - emotional attachment also refers to psychological appropriation of the firm by the family in order to maintain a positive self-concept. companies become the place where the needs for belonging, affect, and intimacy are satisfied (Kepner, 1983). In Other words, the family’s emotional attachment to the firm can “facilitate self-continuity by connecting a person with a desirable past self (e.g., memories), a present self (me now), or a future self (who I Am becoming)” (S. S. Kleine, Kleine, & Allen, 1995, p.328).
    - - Zellweger and Astrachan (2008), and Zellweger, Kellermanns, et al. (2011) suggest this transgenerational sustainability as one of the central aspects of SEW. the firm is not just an asset that may be easily sold, since the firm symbolizes the family’s heritage and tradition (Casson, 1999; Tagiuri & Davis, 1992). Consequently, family members view the firm as a long-term family investment to be bequeathed to descendants (Berrone et al., 2010). Evidence shows that maintaining the business for future generations is commonly seen as a key goal for family firms (Kets De Vries, 1993; Zellweger, Kellermanns, Et al., 2011) And that many family firms exhibit longer term planning horizons (Miller & Le Breton-Miller, 2006b; Miller, Le Breton-Miller, & Scholnick, 2008; Sirmon & Hitt, 2003).
      - the preservation of the family dynasty, the perpetuation of family values through the business, and the intention to pass the business to subsequent generation foster a “generational investment strategy that creates patient capital” (Sirmon & Hitt, 2003, p. 343), commitment to building capabilities, and learning.
- - - - Tradition is hence the product of the “accumulated
        cultural productivity of society” (Ashworth, 1994, p. 20), which may serve as a key strategic resource upon which to build novel economic opportunities (Graham, 2002). By leveraging tradition it is thus possible to rediscover distinctive knowledge whose adaption to current market needs and expectations may open the door to the creation of unique opportunities for product innovation and, as a consequence, competitive advantage.
        
        knowledge pertaining
        to the traditions of the firm itself and
        
        knowledge pertaining to the traditions of the territory
        in which the firm is located (Messeni Petruzzelli
        & Albino, 2012).
    - - Codified knowledge in ITT most commonly takes the form
        of raw materials and manufacturing processes (Benezech et al., 2001; Brusoni, Marsili, & Salter, 2005), but past knowledge can also be codified in product signs—combinations of colors, textures, symbols, etc.—that communicate messages to product users (Dell’Era & Verganti, 2007).
      - Tacit knowledge mainly refers to the assumptions and values at the base of an organization’s culture in the past. According to Schein (2004), underlying assumptions are unconscious, taken-for-granted beliefs, perceptions, thoughts, and feelings representing the ultimate source of values and actions in an organization.
    - - Via codified knowledge
        
        innovations that offer new functionalities by innovating the technologies on which the product is built
        
        uses science and technology to create
        innovative functionalities. This approach assumes
        a progression of knowledge from basic science to
        applied research to the development of products for
        commercial ends (e.g., Tushman & Anderson, 1986)
      - Via tacit knowledge
        
        innovations that determine a change in the reason
        why customers buy a product by building on its
        original meaning (Verganti, 2008; Veryzer, 1998).
        
        “starts from the comprehension of
        subtle and unspoken dynamics in sociocultural
        models and results in proposing radically new
        [product] meanings and languages that often imply
        a change in sociocultural regimes” (Verganti, 2011,
        p. 387).
    - - The final, and perhaps most important, building
        block of ITTis formed by a specific subset of dynamic
        capabilities (Teece, 2014)—namely, the capabilities
        to interiorize and reinterpret past knowledge
        
        interiorization
        
        refers to the firm’s capability
        to internalize—within its organizational boundaries—
        potentially useful knowledge from the past, by
        searching and sourcing it from the tradition of the
        firm or of its territory.
        
        bringing past knowledge
        culturally close to employees, especially those involved
        in the innovation process, is key for ITT (Messeni
        Petruzzelli & Savino, 2014)
        
        By creating a sense of cultural proximity
        between employees and past knowledge embedded
        in the tradition of the firmor the territory, a firmcan
        internalize such knowledge, identify the appropriate
        forms in which it can be stored and retrieved,
        and leverage it by reducing the risk of misinterpretation
        and wrong applications in the product innovation
        process.
        
        Interiorization capabilities allow past knowledge to be fully understood and reducethe risk of incorrect applications due to f forgotten practices, lost records, and staff turnover (Argote, 1999)
        
        achieved by ensuring cultural closeness between past
        knowledge and the inventors, giving them a deep
        understanding of these traditional resources in the form
        of common interpretations and routines that “allow
        Interiorizing knowledge from the firm’s past (basic
        assumptions and beliefs) and reinterpreting these to
        enable new product meanings
        
        shared cognitive and
        interpretative schemes among employees (e.g.,
        Jensen & Szulanski, 2004), which contribute to
        sustaining and enhancing their aptitude to effectively
        use past resources (e.g., Kostova & Zaheer,
        1999).
        
        Reinterpretation
        
        is the capability
        of making this knowledge marketable and
        useful to satisfy contemporary customer needs by
        combining selected forms of past knowledge with
        up-to-date technological solutions.
        
        past knowledge may be recombined
        with technologies from distant industrial fields
        (Messeni Petruzzelli & Savino, 2014), hence augmenting
        the variety and scope of the recombination
        process (Katila & Ahuja, 2002; Laursen, 2012). Introducing
        technologies from different contexts enables
        the firm to refresh its competence base, thereby
        avoiding the risk of rendering past knowledge obsolete
        and enhancing its newness (Ahuja & Lampert,
        2001).
        
        past knowledge may be recombined with solutions and technologies that are familiar and largely adopted in the specific industrial field but used to develop new connections among the various tangible and intangible elements of the product, resulting in unexpected functionalities or meanings (Maggitti, Smith, & Katila, 2013; Messeni Petruzzelli & Savino, in press).
- - - - some scholars
        (e.g., Chrisman, Fang, Kotlar, & De Massis, 2015) pointed to the importance of considering both
        the degree and type of family involvement to understand how family involvement translates into
        firm behavior. This entails capturing the heterogeneity of the family and its effects, an accomplishment
        that existing family business research has scarcely achieved (Combs, Jaskiewicz, Shanine, &
        Balkin, 2017; Jaskiewicz & Dyer, 2017)
        
        Family structure
        
        Family structures may
        affect the managerial discretion of individuals, their capabilities through resource mobilizations, and
        their motivations; yet family business research implicitly assumes the prevalence of particular family
        structures, such as the nuclear family
        
        Family functions
        
        he functions families assign to their members and expect of them
        (Popenoe, 1996).
        
        Understanding family functions is important because
        these influence the behavioral propensities of the involved families, for instance, by constraining
        access to the family resource pool or stimulating the family’s intention to perpetuate control in the
        hands of the family.
        
        Family interactions
        
        the type of interactions that characterize family member relationships
        
        Communication patterns
        
        Parenting styles
        
        level of intergenerational solidarity
        
        Family events
        
        relate to those episodes in the family life cycle that change the structure and functions
        of families and member interactions.
    - - ability as discretion
        
        the involved family’s discretion to direct, allocate, add to, or
        dispose of a firm’s resources. This includes latitude in selecting the direction of the organization and
        in choosing from among the range of feasible strategic, structural, and tactical decisions
        (Hambrick & Finkelstein, 1987; Morck, Shleifer, & Vishny, 1988).
      - ability as resources
        
        those capabilities that members of the involved family need or
        should use to lead the firm in the preferred direction.
      - willingness
        
        nvolved family’s favorable disposition to engage in distinctive
        behavior. This has been attributed to transgenerational succession intentions, socioemotional wealth
        concerns, and commitment to the business (Chrisman, Chua, Pearson, & Barnett, 2012; GomezMejia
        et al., 2007).
    - - Governance system
        
        the incentives, monitoring, and authority structures, as well as
        the norms of accountability that shape the policies and strategies a firm uses to create long-term value for stakeholders (cf., Carney, 2005). The family exercising its ability as discretion to govern the firm may lead to the board of directors being entirely controlled by family members or ownership involving pyramids, cross-holdings, and dual voting class shares (Claessens, Djankov, & Lang, 2000), allowing the family to bypass the board when making strategic decisions (Carney, 2005; Lorsch & MacIver, 1989). Likewise, the presence of a family chairman/CEO or institutional investors is another aspect of heterogeneity in the governance systems of family firms.
      - resources
        
        can be financial, social, human, and emotional (Habbershon &
        Williams, 1999), and how such resources are developed, deployed, and discarded depends largely
        on the involved family’s ability as capability.
      - Goals
        
        economic versus noneconomic as well as family centered versus
        business centered (Chrisman et al., 2012; Kotlar & De Massis, 2013) and are a major cause of heterogeneity
        of family firm behavior (Chua et al., 2012). The distinctive strategic goals of the family
        firm emerge as a result of the involved family’s willingness and abilities.
    - - locality vs. globality
        
        trade-off refers to the extent to which a family firm chooses to be
        anchored to its local roots rather than pursue global growth and/or operate internationally. Family
        firms are often torn between their local roots and their desire and need for global growth and international
        activities (Graves & Thomas, 2008). For instance, the attachment of family firms to their
        home territory’s tradition (De Massis, Frattini, Kotlar, & Messeni–Petruzzelli A, Wright M., 2016)
        may lead them to be inclined to focus on the local context rather than pursue internationalization
        (e.g., Bird & Wennberg, 2014).
      - scope, modes and location chioces
        
        trade-off refers to the extent to which a family firm chooses to be
        anchored to its local roots rather than pursue global growth and/or operate internationally. Family
        firms are often torn between their local roots and their desire and need for global growth and international
        activities (Graves & Thomas, 2008). For instance, the attachment of family firms to their
        home territory’s tradition (De Massis, Frattini, Kotlar, & Messeni–Petruzzelli A, Wright M., 2016)
        may lead them to be inclined to focus on the local context rather than pursue internationalization
        (e.g., Bird & Wennberg, 2014).
      - internation business models
        
        options in terms of the focused (niche) versus mass
        market (broad) strategy that family firms adopt in foreign markets (e.g., Hennart, 2014).
      - timming and speed of internationalization
        
        family firms
        tend to be quicker in their decision processes, since family culture fosters a more homogenous man-
        agement team that allows family firms to react promptly to changes in the environment typical of
        international markets (e.g., Kontinen & Ojala, 2012).
        
        the desire to protect family
        wealth and pass the business to future generations makes family firms more risk averse and, therefore,
        slower to leap into new markets without adequate preparation (e.g., Gomez-Mejia et al., 2010).
    - - Exo context
        
        refers to the economic, social, political, legal, cultural, spatial, and technological environment
      - chrono context
        
        the life courses of the family and business systems, and encompasses factors
        that lead to evolutionary or punctuated changes along the family’s and the business’s life, such
        as succession, business exit, mergers and acquisitions, declining performance, and environmental
        jolts.