Leveraging Innovation in Family Startups: A Stewardship Approach

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Family firms are often criticized for failing to seek new ventures, being conservative and resisting change. On the other hand, researchers believe that certain characteristics in family relationship can foster strategic flexibility. Drawing on Stewardship theory, this paper, rather than arguing in favor or against family business innovation, takes a contingency approach and analyzes variables that may affect innovation in family startups and the conditions that leverage their family resources as competitive advantage. Specifically, this paper proposes that altruism, power concentration and their interaction affect strategic flexibility. It is also argued that family business with main founders high in altruism and low on power concentration can become more innovative than when the main founder is low in altruism and high in power concentration. Finally, it is suggested that the effect of altruism on strategic flexibility should be stronger in family business than in non-family business. Implications for theory and practice are derived.



Strategic Flexibility, Family startups, Altruism, Power Concentration


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