Lim, Tien Shing
(2023)
Selecting and managing partnerships in open innovation: evidence from a Malaysian family firm.
[Dissertation (University of Nottingham only)]
Abstract
Innovation is the key driver for competitive advantage for businesses. It has been the main ingredient for economic growth of many major economies in the world. In the innovation practice, open innovation is identified as the new imperative for business success. Open innovation allows innovation to be more efficient with lower cost and shorter development time with the collaboration of external knowledge. For example, company like GE, Coca-Cola, Samsung and so forth have successfully employ open innovation to utilize external knowledge to create value. However, not all organizations are ready for open innovation. Organization flexibility with the appropriate structure and processes are required to capitalize open innovation. The absorptive capacity of the firm has to be developed internally so that it is enabled to accommodate open innovation strategy.
In this study, open innovation study will be focused on family firms. Family business has been a major economic force in the world over the years. It continues to contribute to drive the economy. It has attracted more attentions from the research scholar in recent years. Many scholars are interested to study the distinctive behaviour of family firms. Family firms behave differently from non-family firms as they seek non-economic goals such as socioemotional wealth preservation affects the many strategic decision making of the organization. Socioemotional wealth is an important concern in family business as family owners are not willing to have the family firm’s socioemotional wealth to be threaten but rather willing to accept organization failure to preserve it. The findings from research results with mixed results suggesting that family firms are not innovative, and some indicate that family firms are innovating in more efficient approach but adopted different strategy from non-family firms. The research in this topic in family firms open innovation is lacking. The current literature from the mainstream study focuses on non-family firm innovation management. The fragmented and limited understanding in this important topic of open innovation and family firms invites an important investigation to address the gap in the literature. The motivation of this study is to gain understanding of family firms open innovation and the processes of how family firms identify and manage collaboration partners in the open innovation. Family influences with the socioemotional concern in the collaboration processes is investigated and how it affects the strategic direction of the firm in terms of open innovation.
This research adopts qualitative methodology by using a case study approach. It employs positivistic approach to investigate the actual phenomenon to gain understanding from the case study observations and findings. The selected family firms case study is in Asian context where it offers in-depth insight of a case study with Asian culture and values system. Data collections are gathered from direct interviews with family members and non-family members of top management of an innovative professional family firm with secondary information sources such as document achieve, product information and direct observations. The findings are based on the evidence from the observations. The process of data collection with interviews and document collection is an iterative process where follow up interviews and revisit of achieves occurs several times as necessary for the purpose of the analysis. The findings are validated with existing literature, empirical findings, and evidence.
From the observation, a conceptual model is proposed for the process of family firm’s partners identification and management. Family members influence is identified in the collaboration partners identification process with the conceptual model. The family members goals, intentions, and motivations initiate the need for collaboration with external partners and family has influence in the evaluation of identifying the partners for collaboration. The partners identified are usually from the existing social ties and network. The partner’s evaluation is more on relationship-oriented consideration for relationship stability rather than functional requirement for business performance. The preferential approach of identifying partners from a closed network demonstrates that family firm is low in openness with narrow search breath and limited only to existing network. With the same goals, intentions and motivations, family members manage the collaboration to maintain a good relationship with the partners. The quality of relationship and experience are valued more than the innovation outcome. The relationship with collaboration partners is managed and regulated with the mutual compatible of goals and values system. The ability of partners to resolves conflicts is also crucial in the collaboration management as to preserve mutual socioemotional wealth. The findings show family firm preserve the firm’s socioemotional wealth to keep the family control, family members identification with the firms, social ties, and emotional attachment.
The study concluded that socioemotional wealth preservation is the main consideration in family firm open innovation in term of identifying and managing external partners in the collaboration. The introduction of external influence is carefully considered in the open innovation activities so that the socioemotional wealth of the family firm is not threatened. This study has contributed to the literature in terms of extending open innovation in family business, identified the processes of open innovation in family firms and extending into open innovation in family firms in Asian context. The study has limitations where this is a single case study with limited heterogeneity covered in the family firm study. Future research should expand further with multiple case study and cross case comparison study.
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