Discussion and conclusion
which found a positive relationship between innovativeness and family firm performance.
More specifically, knowledge was identified as a key variable with innovation
in family organizations. It is concluded that innovation and knowledge resources have
the strongest influence on family firm performance.
The effect of innovation was the strongest overall performance indicator from the
study. Based on this finding and from previous research, it appears safe to say that
innovation contributes to improved firm performance in both family and non-family
firms. SMEs should manage their business with regard to the development of new and
existing products and services, proactiveness and calculated risk-taking, innovative
marketing, and others as suggested by the innovation variable. Therefore, even though
the development of an innovative company culture can be complex and a time consuming
process, this may result in benefits to the firm. Policy-makers may need to
afford a means of identifying the resources that include innovation and knowledge as
this may affect the performance of small family firms.
The findings in this study are perhaps most interesting with regard to knowledge. Family
firms showed a result that is consistent with the literature, which argues that knowledge
resources have perhaps the greatest ability of all resources to serve as a source of sustainable
competitive advantage. Knowledge permits a firm to predict more accurately the nature and commercial potential of changes in the environment and the appropriateness of strategic and tactical actions Thus, a firm is more capable of discovering and exploiting new opportunities. For this study, knowledge was not only significant in the final model, but it
also enhanced the explanation of the variance substantially compared to non-family firms.
The enhancement of knowledge emphasizes the gathering of new knowledge, which
can often be achieved through employees, by encouraging them to sustain their application,
distribution, and creation of knowledge. Firms should be continually encouraging family and non-family members to update existing knowledge to develop new competencies that will be beneficial Acquiring new knowledge is best accomplished if internal processes are established for individuals to interact and collaborate with each other and facilitate the transmission and dissemination of knowledge that can enhance firm performance, which is often found in family firms.