Entrepreneurial Innovation as Survival Strategy in Family Business

Abstract

IntroductionA prominent feature of family business across context is their long-term orientation and survival instincts. Most family businesses operating all over the world today have been in existence couple of decades now, and this peculiarity does not come easy. This, as attested to by the Small Business Association (SBA, 2016), that for a small business to be deemed successful it must be able to sustain its profitable existence beyond five (5) years of launch. Economic resources capable of ensuring business survival and creating competitive advantages for a business firm, as affirmed in extant literature, must be rare, valuable, inimitable and non-substitutable (Barney, 1986;Habbershon and Williams, 1999;Barney et al., 2001). Survival of such business firm is also a function of certain leadership qualities which includes judgement, perseverance, industry knowledge as well as experience (Say, 1803). The successful firm must possess superior abilities to transform business plan into reality, specialised abilities via extensive knowledge of the specific trade and a good understanding of the leadership qualities required. These abilities, as expressed by Marshall (1890) depend on family background, experience, volume of internal capital, level of education and talent, through which a firm maintains its competitive advantage, continuous improvement of market share and consequently ensure its survival.Corroborating these views, Schumpeter (1934) posited that the survival of a business depends on its ability to constantly innovate. And that successful innovation is a function of good leadership with strong and scarce motivations from both staff and management. Similar view expressed in the 2016 Pwc survey as reported by Harland (2017) highlighted five (5) critical factors for family business survival. These include fostering workable succession plan for stability; imbibing professionalism in operation; developing strategic planning that encourages radical innovation; encouraging business innovation; and embarking on concerted efforts to prepare the next generation for leadership roles. Thus, the common position across ages rest on the ability and capability of family firms to be creatively innovative to ensure their survival.Business innovation is about creating more effective processes, generating and implementing new ideas, improving dynamic product qualities and services, as well as effecting positive changes in the business model, reference to existing environment, to deliver improved values. A very important step towards business survival is to constantly scan the market environment, to enable firms generate good ideas to respond to changes in the marketplace, improve productivity, efficiency and remain competitive. As posited by Leenen, (2005), innovations are the expression of entrepreneurial activity that allows a firm to increase its return on investments, achieve greater market share, and strengthen its overall competitive position while contributing to its long-term survival. It is about the introduction ...