Family firms need strong technological capabilities to acquire and maintain market share, grow their operations, earn profits, and create wealth. Building these capabilities requires family and non-family members to share and integrate their knowledge about the industry, competition and technological trends. According to the knowledge-based view of the firm, these knowledge sharing practices can occur formally and informally. Though familial ties enhance formal and informal knowledge sharing within family firms, jealousies, rivalries and concentration of power can stifle this sharing. Results using data from 209 family firms show that formal and informal knowledge sharing practices are positively associated with the strength of family firms' technological capabilities. Furthermore, the number of generations involved in management strengthens the relationship between both formal and informal knowledge sharing mechanisms and family firms' technological capabilities, while the percentage of top managers who are family members strengthens the informal knowledge sharing-technological capabilities relationship.
Bibliographical noteFunding Information:
The supportive comments and sugggestions by Jim Christman are acknowledged. Patricia H. Zahra's assistance with earlier drafts of the paper is also appreciated. This paper is based on a larger database, as described in Zahra (2005). The financial support of Babson College in data collection is also acknowledged with gratitude.
- Family firms
- Knowledge sharing
- Technological capabilities