The Family Factor : Family Influence and Incumbent Response to Discontinuous Change

Few topics have received more attention in the management literature than the faltering of established organizations in the face of discontinuous change. However, the role played by the social context of major shareholders, particularly families, has been largely underexplored. In this conceptual paper, we contribute to bridging this research gap by integrating the literature on organizational inertia with research on family businesses to explain how family influence affects the reaction of established organizations to technological discontinuities. Specifically, we propose that family firms adopt the innovation faster than their non-family owned counterparts; however, they take smaller, less aggressive initiatives and they encounter more difficulties in adopting new, non-paradigmatic routines than non-family owned firms. We also suggest that, when the technology is further emerging, family businesses show more stamina than other companies: that is, they are more willing to continue investing in a new technology, particularly after initial failure. Finally, we hypothesize that executive personality, particularly the openness to experience of the CEO, moderates the association between family influence and technology adoption. Our model has important implications for theory on organizational change and family business research.