DOES SIZE MATTER WHEN DRIVING INNOVATION AND CHANGE?

Big or not, every organization are affected by the changing environment resulting new technologies and innovations. As it is known, big companies like Microsoft, Apple, Amazon and so on, established the corporate culture of simultaneous change and innovation such as Artificial Intelligence: Siri launched in 2012; cashier-less smart-store of Amazon Go.

However, how do small business like Family Businesses adopt such advanced changes in technologies and how do they cope with it?

Small Business Through Change: Family Businesses Adopting Innovativeness   

For organizations, coping with new technologies and innovations are considered vital for competitive advantage, and performance. Organizational changes are crucial for any organization including small organizations such as, family businesses. Family firm survival requires building capabilities such as innovativeness that enable them to respond to changing business and family-related demands, ensuring the firm’s continuity (Craig & Dibrell, 2006). Since the family firms desire to keep the business in the family, innovative actions may be prevented from the older generations because they don’t want to invest in new opportunities. Thus, they consider innovations as high-risk activities. However, innovation is particularly important in family firms as it increases the likelihood of survival across generations (Jaskiewicz et al., 2015). In the findings of the article Innovative Motives in Family Firms: A Transgender View, family firms are driven by three patterns; conserving, persisting and legacy building. These patterns lead to four innovation outcomes; product or service innovations, process innovation, marketing innovations and organizational innovations.

Well-rooted, traditional firms, enduring for centuries, take innovativeness as a phenomenon to provide long-term permanence and inject entrepreneurial point of view to the corporate culture as a pivotal value. This type of organizations explicitly tends to take advantage of “incremental change”, rather than being mandated to implement “radical changes” that would erode the ever-standing organizational structure (Daft, Murphy & Willmott, 413). Based on this, “conserving” approach to innovations are vital for the “continuity of the family business” by being able to respond and adapt to cyclical and environmental changes (Diaz-Moriana et al, 14). They mainly try to transfer the “family expertise” to next generations via combining this valuable accumulation of knowledge with innovative sustainability. Moreover, “persisting” perspective to innovation and change enables organizations to spread the success over long-term by maintaining perseverance over time with innovative responds to change (Diaz-Moriana et al, 17). Persistence leads to growth in long-term by innovations. They believe that fruits of innovations can be collected merely in long-term, which shows that traditional organizations, rather than adopting the tool of “strategic type of change” in culture, lean on a permanent, solid innovative value in their culture (Daft, Murphy & Willmott, 415). Lastly, “legacy-building” is an important approach towards innovation and change. Innovation leads to series of mark-leaving performance, and it goes on as a pattern in the organization. It inevitably leaves a legacy and reference for next generations. As a consequence, innovation and change holds an important position as “trans-generational value of entrepreneurship” in rooted organizations (Diaz-Moriana et al, 18-20).

BIG BUSINESSES ADOPTING CHANGE: THE EFFECTS OF MOTIVATION AND ABILITY

A growing body of work among large, established organizations are the main actors in creating new radical technologies. Radical technology is affected by the role of incumbent firms by their different approaches to ability and motivation. As J.P. Eggers state in his article Motivation and Ability? A Behavioral Perspective on the Pursuit of Radical Invention in Multi-Technology Incumbents, the motivation to follow radical development is strongest when performance is relatively below aspiration and it keeps getting weak as performance either decrease significantly below aspiration or increase above aspiration. Simultaneously, ability will increase with performance, resulting in a behavioral incompatibility between ability and motivation.

Firm’s motivation to purse radical invention will depend on its appetite for risk. Firms whose technology related performance’s outcomes are slightly below their goals, are likely to overinvest in development while others, whose performances are largely above aspirations are likely to underinvest. (Eggers, pg.68)

It is revealed that the technological developments which can be seen as a competence-destroying, breakthrough innovations, are adopted by new firms at a higher rate than existing firms. This can imply that some existing firms can sometimes be more traditional and late to adopt innovations and changes.

Significant amount of development and change is more frequent among non-corporate entities like family businesses. Hence, the organic structure in organizations can motivate and encourage employees to produce the continuity of exchanging ideas in order to innovate, invent and eventually cultivate.

Alternatively, firms with some experience, are not only likely to patent in categories where they have prior experience but also, have the ability to invent radically different and diverse innovations. Generally, firms that accomplish to develop radical inventions, receive more citations on their patents on average. Thus, if an organization is creative enough to expand capabilities and explore new ideas; they can attract more interest on their radical inventions.

THE BIG PICTURE

Big businesses and small businesses differ in several ways such as organizational structure, communication channels, span of control and so on. Changes happen even if we want or not; it is inevitable. Both types of businesses need to adopt the changes in the technology and innovation in order to survive. Although the techniques that they implement and the paths that they choose to achieve may differ from each other, the main goal will remain the same: to grow and make profit which cannot be established without any change.