Family Commitment and Product Innovation in Family SMEs. Do Management Control Systems Have an Influence?

Abstract

This article empirically examines the role of family members’ commitment to a family business on product innovation. In light of the theories advocating the use of organisational and management control tools to foster innovation—through hierarchical control and interactive dialogue—a conceptual and empirical framework applied to the case of product innovation in the family firm is suggested. The theoretical framework was tested through partial least squares structural equation modelling on sample data obtained from 47 French family small- and medium-sized enterprises. Empirical evidence shows that the higher the family commitment is, the less the family firm will engage in product innovation. In line with expectations, the models show that a diagnostic and interactive use of control systems positively influences family firms’ product innovation. However, while the moderating effect of ‘diagnostic control systems’ was substantiated, that of ‘interactive control systems’ was not established.