Research from the University of Glasgow details what happens when focus on productivity unites with external orientation
The culture of a business is influenced both by its own organisational culture and its perception of others. It’s a question of personal relationships, past events and social bonds: they all contribute to developing innovation and growth. Even, and perhaps above all, in the case of family businesses. The study of relationships between the different components of business culture, such as organisational culture, is an important path to follow.
This is just what Sylvie Laforet (Glasgow Caledonian University) has done in her work: “Effects of organisational culture on organisational innovation performance in family firms” published in volume 23 of Journal of Small Business and Enterprise Development.
The purpose of this research is to examine the effects of organisational culture on innovation activities within small and medium-sized family businesses. The aim is to establish a particular type of culture that will foster high levels of innovation within family businesses. The research has been carried out as a cross-industry survey of small and medium-sized family businesses, in the UK.
The cultural elements that have been taken into account by Laforet can be grouped into some general characteristics. These include external orientation, a flexible and open organisational culture, internal structures based on trust and open communication. However, the business founder’s culture is of significance, as is the long-term cultural direction inside the business.
Laforet questions the sample-group businesses and collates the survey results to show that paternalistic cultures (particularly from the founder) have a negative effect on the ability of the family, and hence the company, to be innovative. On the other hand, “successful” family businesses have a culture of flexibility, proactivity and have an external focus.
Clearly limited by geography and by sample size, Laforet’s work is useful, though, in providing an outline to interpret other similar situations. It also demonstrates how ingenuity and perspicacity continue to be two of the key elements of great entrepreneurship.
Journal of Small Business and Enterprise Development, Vol. 23 Iss: 2, pp.379 – 407, 2016