Given the central role of Knowledge Management Processes (KMPs) in fostering innovation and business performance, as well as the distinctive characteristics of Family Firms (FFs), this paper addresses two main objectives. Firstly, this paper aims to explore the relationships between KMPs and FF´s innovation outcomes, in terms of radical, incremental and mixed/ambidextrous innovations. KMPs can be defined as the dynamic activities and practises developed by an organization to process and manipulate its knowledge resources with the aim of producing valuable knowledge (Pinho et al., 2012) and achieve organizational goals (Stanovcic et al. 2015). By doing so, we contribute to the limited research on Knowlegde Management (KM) in the FF context (Nieto et al. 2015; Chirico and Salvato 2016; Serrano-Bedia et al. 2016), a question of particular relevance considering that the overlap between family and firm (Biscotti et al. 2018), as well as the high influence that the distinctive features of FFs have tends to affect the KM process (Kotlar and De Massis, 2013; Kotlar, De Massis, Frattini and Kammerlander, 2019).
Secondly, this paper explores the role of risk taking, defined as the willingness to invest and commit resources with uncertain results (Pittino et al, 2018), as a moderator variable on the KMP-Innovation outcomes relationships in FFs, in an effort to expand the limited existing knowledge about this subject (García-Piqueres el al., 2019). In this vein, it has been traditionally suggested that “FFs are usually associated with a conservative and risk-averse posture” (Huybrechts et al. 2013). This behaviour reinforces a tendency to implement incremental innovations with greater probability (Fuetsch and Suess-Reyes 2017) as well as a less investment in innovation but with a an increased conversion rate of innovation input into output than non-family firms (De Massis et al. 2013; Duran et al. 2016; Roed 2016; Fuetsch and Suess-Reyes 2017).
Data for this study were collected using a survey instrument applied to Spanish small and medium enterprises (SMEs). The population was compiled from SABI database (Iberian Balance Sheets Analysis System).5877 Spanish SMEs were chosen randomly and only those enterprises that self-defined as family firms were included in the final sample. Consequently, a total of 288 Spanish family SMEs from all sectors were included in the study.
The empirical study consists of the application of linear regression by OLS over the dependent variable. Results confirm a positive effect of only one of the KMPs under study -knowledge creation- on all the innovation outcome variables analyzed, suggesting that those enterprises interested on innovation in a broad sense should focus their efforts on this knowledge process. Regarding the moderating effect of risk taking on the KMP-innovation outcomes relationship, a positive moderating effect is found for knowledge storage and both incremental and ambidextrous innovation, whereas a negative moderating effect is found for knowledge transfer and both radical and ambidextrous innovation.