The Essence of Innovative Behaviour in Retail Family Businesses
By
Sanne Anna Lucia Mooren
Dual Award Master of Science in Advanced International Business Management and Marketing
Newcastle University Business School Supervisor: Dr. J. Kimmitt Student Number: B50688086
s.mooren2@newcastle.ac.uk
University of Groningen, Faculty of Economics and Business Supervisor: Dr. B.J.W. Pennink
Student Number: S2994674 s.a.l.mooren@student.rug.nl
2
Abstract
This papers investigates the role of storytelling in innovative behaviour of retail family businesses. By making use of the explorative qualitative research strategy a contribution to the knowledge of innovation behaviour and knowledge sharing in retail family businesses has been made. Previous literature has investigated retail family businesses and innovative behaviour, but there is not a lot known and written about storytelling and the influencing role on the innovative behaviour of retail family businesses. Based on the within-case analysis and cross-case analysis which has been made via the grounded theory method a conceptual framework is determined. Four retail family businesses and a retail industry expert have been interviewed and the data has been analysed. It is proven that the five sensitising concepts are linked with each other in the following way. The uniqueness of family businesses, storytelling and organisational culture are intertwined. These three sensitising concepts together are influencing the level of innovative behaviour. The retail industry is seen as a separate entity that has an influencing effect on innovative behaviour. The findings illustrate that innovative behaviour can be positively influenced by the sensitising concepts stated. This papers opens up topics for future research.
Keywords: Innovative Behaviour, Organisational Culture, Retail-Industry, Storytelling, Uniqueness of Family Businesses
Acknowledgements
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Table of Content
1. Introduction ... 5
2. Family businesses, Innovative behaviour and the facilitating role of Storytelling ... 7
2.1 Family businesses ... 7
2.1.1 The role of the different generations ... 8
2.2 Innovation behaviour ... 9
2.2.1 Innovation behaviour of family businesses ... 9
2.2.2 Communication processes and innovation behaviour ... 10
2.3 Retail ... 11
2.3.1 Innovative behaviour of retail family business ... 12
2.4 Storytelling ... 13
2.4.1 Sense-making and storytelling ... 14
2.4.2 Contextual factors of storytelling ... 14
2.4.3 Transmedia storytelling ... 15
2.5 Organisational culture ... 16
2.6 Theory based overview ... 17
3. Research Design leading to Empirical Answers ... 19
3.1 Research objective ... 19
3.2 Research design ... 19
3.3 Data collection ... 21
3.3.1 Interview protocol ... 22
3.4 Data analysis... 25
3.5 Transparency and ethics ... 27
4. Family members’ thoughts on Storytelling, Innovative Behaviour and Retail Family Businesses ... 28 4.1 Case overview ... 28 4.2 Within-case analysis ... 28 4.2.1 Case 1 ... 28 4.2.2 Case 2 ... 29 4.2.3 Case 3 ... 30 4.2.4 Case 4 ... 31
4.3 Cross-case analysis to give substance to the sensitising concepts ... 31
4.3.1 The uniqueness of family businesses, organisational culture and storytelling ... 34
4.3.2 Retail-industry ... 35
4.3.3 Innovative behaviour ... 36
4.4 Final conclusions ... 37
4
5.1 Contributions ... 38
5.2 Managerial implications ... 42
5.3 Limitations and future research ... 42
References ... 44
List of figures
Figure 1: Overview for potential pathways of storytelling. ... 15Figure 2: The sensitising concepts used at the start of the data collection ... 18
Figure 3: Sensitising concepts interview ... 24
Figure 4: The final sensitising concepts ... 37
Figure 5: Conceptual model ... 41
List of tables
Table 1: Explanation of the attributes for innovation adoption. ... 11Table 2: The three key characteristics of storytelling. ... 15
Table 3: The level of uncertainty avoidance ... 20
Table 4: Overview selected cases ... 28
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1. Introduction
Every organisation is different, but there is one element that is important for every organisation. Organisations need to be innovative. This is relevant for all types of organisations (Pantano, 2014; De Massis et al., 2015). To enable future success it is important to keep on innovating, so that firms will stay competitive in the globalising environment (Laforet, 2013). Although the retail environment is asking for innovation, retail organisations are not characterised as the most innovative firms (Pantano, 2014). Retail organisations are predominantly seen as more traditional than companies in other industries. This is even stronger among retail-family businesses. Family businesses are known as conservative firms and therefore are they are less willing to focus on innovation (Sharma, Chrisman and Chua, 1997). Logically, this is why family businesses are having low investments in innovation (Block, Miller, Jaskiewicz and Spiegel, 2013; Jaskiewicz, Combs and Rau, 2015).
Some family businesses are innovative and research has found that this is positively affected by stories shared among different generations of family-members. Sharing stories is usually called storytelling (Maritz, Petzer and Meyer, 2014). The involvement of family members from different generations lead towards storytelling and knowledge sharing environment, which in turn may lead to a more innovative environment. The manner in which family members interact and share their stories will affect how innovative a family firm is (Kammerlander et al., 2015; Jaskiewicz et al., 2015). This relationship is only proved in the Italian wine sector and not in the retail sector. This study builds upon Kammerlander et al. (2015) and will try to find out if storytelling is related to innovation behaviour of family businesses in the retail sector.
Research has shown that organisational cultures have an influence on how organisations innovate (Nieto et al., 2015). Therefore, it is important to take the organisational cultural aspects into consideration. Organisational cultures vary among different countries (Hofstede, 2004). Therefore, organisational culture will be added to the research, this making the purpose of the research clear. This paper will try to understand if there is a relation between storytelling and innovation behaviour in retail family business. This is done with the following research question:
What do we know about storytelling in relation to the innovation behaviour of retail family
businesses?
o What is the role of the organisational culture?
6 behaviour of retail family businesses, how does innovative behaviour works, which factors will stimulate and facilitate innovative behaviour and in which way these relations differ among family businesses with different organisational cultures.
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2. Family businesses, Innovative behaviour and the facilitating
role of Storytelling
Many other research papers have previously investigated retail family businesses and their innovative behaviour. The literature already covers a wide range of topics and areas. However, the role of storytelling in this context has never been investigated before. Therefore, this review will focus on the five major themes which are seen as important for finding an answer to the research question. These five themes are: Family Businesses, Innovation Behaviour, Retail, Storytelling and the Organisational
Culture. Each of the themes is discussed in the coming paragraphs. The existing theories for each of the
themes are analysed to narrow down and direct the gathering and analysis of data. 2.1 Family businesses
Family businesses are known for their unique characteristics. A characteristic that distinguishes a family business from other firms is the involvement of family-members. There are several definitions about what family businesses are. These definitions are all related to how family-members are involved within the firm. Family involvement makes the distinction between family businesses and non-family businesses clear (Kim and Gao, 2013). A definition that is often used is the definition of Chua et al. (1999, p. 25): “A business governed and/or managed with the intention to shape and pursue the vision
of the business by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families”.
Other characteristics that differentiate family businesses from other firms is that they are often reluctant to invest in new ventures, unwilling to generate change and afraid to take risk (Kellermanns et
al., 2012). This shows that family firms are not the most innovative firms that exist. Recent research has
revealed that a small alteration is going on among family firms, in that they are more willing to be innovative when the situation asks for it (Gómez-Mejía et al., 2007). A situation that asks for innovation behaviour is the globalising environment in the retail sector. Globalization of the retail environment leads to continuous changing of customers’ preferences. The retail market is becoming more transparent by the knowledge that customers are, for example able to look up prices from products all over the world (Rossi and Chintagunta, 2016). The customers are influenced by multiple retail companies from different countries, this alters their preferences. Retail organisations want to adapt to the new preferences of customers (Reinartz et al., 2011). By this, family businesses are more willing to become innovative.
8 the individual family members is influenced by this set of norms and values due to the fact that they are raised with the values and norms of the family.
Trust within organisations arises when the values, norms and emotions are shared via interactions between the different family members. The existence of trust results in higher levels of cooperation, teamwork and organisational performance (Cater and Kidwell, 2014). High levels of trust shows a willingness to rely on each other and to be committed to the organisation. Within family firms, high levels of trust lead to more direct, frequent and meaningful communication among the family members. Trust is especially of importance during the process of a company takeover by new generations (Cater and Kidwell, 2014).
2.1.1 The role of the different generations
Different generations have different views and roles in the family business. The changes occur due to social interactions that are renewed and reshaped during each succession of a new generation of the family (Schjoedt et al., 2013). The owner is of critical importance in the first generation of the family business. The owner(s) started their organisation with their own entrepreneurial intentions (Cruz and Nordqvist, 2012). These persons are the main influencers in the determination of their business strategy within the family business. The first generation is characterised by groupthink and a conservative way of doing business (Schjoedt et al., 2013). The founder(s) determines the business strategy and this is how the whole organisation is set up and guided.
The second-generation of the family firm is the generation that has to amplify and revitalise the existing firm. This generation is still in the shadow of the founder(s) that most of the time still has an influencing role (Schjoedt et al., 2013). However, this second generation already places more emphasis on the external environment. The environment could have changed since the set-up of the firm. Within the second generation there is a higher risk of conflict, because more family members are involved within the family firm (Schjoedt et al., 2013; Liu, Eubanks and Chater, 2015).
9 2.2 Innovation behaviour
Globalization has created a business environment where innovation has become of tremendous importance for every organisation. Firms need to continue innovating in order to stay competitive. This leads to competitive advantages (Pantano, 2014; Laforet, 2013). The founders and owners are creating and shaping the environment of their organisation and they can therefore impact the innovation behaviour of their own firm (Kammerlander et al., 2015). Innovation is “The adoption of an idea or
behaviour, whether a system, policy, program, device, process, product or service, that is new to the organisation” (Damanpour, Szabat and Evan, 1989 p. 2).
Innovation can be divided into two forms of innovation, these two forms are product innovation and process innovation (De Massis et al., 2015; Utterback and Abernathy, 1975). Product innovation can be defined as: “changes in the products or services that an organisation offers “(Tidd, 2001, p. 177). Process innovation is: “changes in ways products and services are created and delivered (Tidd, 2001, p. 177). Both categories will be taken into consideration in the case where the combination of these two constitute how innovation behaviour can be analysed within a family business.
The strategy of innovation can be described within these forms of innovation. The literature identifies different strategies with different impacts and competitive advantages for the organisation (Table 1). Each of these types of innovation has its own impact on the competiveness of the firm and this is important for the family business. Family businesses need to continuously think about how to stay competitive.
The higher the level of innovation, the better the performance of a family firm. This shows the importance of being innovative (Kellermanns et al., 2012). Innovation within firms is driven by a turbulent and hostile external environment. It is not only the founders and owners whom are shaping an environment where firms are willing to innovate. Organisations are more willing to innovate when the external environment asks for it (Laforet, 2013).
Three external contingencies shape the firms’ innovation management. The level of uncertainty (1), the demand of customers for innovation (2) and the complexity, as a function of the numbers of new technologies and their interactions (3) (Tidd, 2001; Ferreira et al., 2015; De Massis et al, 2015; Pantano, 2014). These three contingencies have an effect on how organisations are able to develop and commercialise new products and services, which in turn impacts the type of innovation that is used within the organisation.
2.2.1 Innovation behaviour of family businesses
10 generations within a family business have evolved to fixed structures within the firm. This leads to a negative relationship with innovation, therefore family business are less willing to change their current patterns (Nieto et al., 2015).
The second view states that when more family members are involved within the firm more innovation exists within the firms (Nieto et al., 2015). This situation occurs due to the involvement of new successor generations within the firm, they are more influenced by the external environment. The more family members and generations are involved, the more opinions, ideas, management styles and objectives are brought to the family firms (Nieto et al., 2015; Reinartz et al., 2011). These opinions are based on the external environment and this may lead to innovation of family businesses.
2.2.2 Communication processes and innovation behaviour
Overall it is important to consider that the way innovation is communicated within an organisation has an influence on the adoption and implementation of new innovations. This process is called the diffusion of innovation. The diffusion of innovation is the process of how an innovation and potential innovations are shared among the members of the organisations or how it is shared within a given industry (Rogers, 2010). This is a communication type that is concerned with the transmission of new ideals. These ideals are the new innovative ideas and behaviour. The diffusion of innovation among retailers is characterised as low (Pantano, 2014). This is due to the influence of external contingencies. The level of uncertainty within the retail industry is currently high. The retail industry environment within the retail industry is subject to the digitalization of the globalising world and this makes it complicated to communicate the adoption and implementation of new innovations (Sabbagh et
al., 2013). Uncertainty exists due to the unknown level of technology acceptance by customers. The
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ATTRIBUTE EXPLANATION
1. RELATIVE ADVANTAGE The degree to which an innovation is perceived as better than the idea it substitutes.
2. COMPARABILITY The degree to which an innovation is perceived as consistent with existing values, past experiences and needs of potential adopters.
3. COMPLEXITY The degree to which an innovation is perceived as relatively difficult to understand and to use.
4. TRIALABILITY The degree to which an innovation may be experimented with on a limited basis.
5. OBSERVABILITY The degree to which the results of an innovation are visible to others.
Table 1: Explanation of the attributes for innovation adoption (Source: Rogers, 2010; Diffusion of innovations. Simon and
Schuster)
The interpersonal communication process is seen as the most effective form for changing and forming attitudes towards new innovative ideas within the adoption of innovation (Rogers, 2010). The five characteristics determine whether an innovation is adopted or not. These characteristics are influenced by the way the ideas are communicated. The view towards each attribute can change by the way that the stories are communicated and shared among the employees or family members of the organisation. Storytelling is a type of interpersonal communication. Storytelling is often used among family-members of the family business for transmitting values which helps for the creation of an identity and sense making (Parada and Viladás, 2010). By sharing personal experiences which took place in the family business, the sharing of these experiences are seen as a tool for transmitting values and ideas from one generation to another.
2.3 Retail
The retail-sector has changed because of the growing importance of information technology and globalization. The retail-sector can be described by the following: The retail-sector is a sector where businesses sell goods or services via traditional stores or /and online-channels (Verhoef, Kannan and Inman, 2015). Other changes that have influenced the retail environment were the advent of online channels, digital channels (mobile channels) and social media. This has changed the retail business models and consumer behaviour (Verhoef et al., 2015). Retail organisations have to adapt to these changes, and innovative behaviour is one possibility to do so. This can create competitive advantages for the retail organisations (Pantano, 2014; Quinn et al., 2013).
12 Braganholo and Borges, 2011). It is important for retail family-businesses to know what effects innovation, thereby having this knowledge it is possible to face the challenges from the retail-environment better. As stated, three external contingencies are influencing the innovation behaviour of family businesses. Within the retail sector it can be concluded that there is a high level of uncertainty, a high the demand for innovation by consumers and a high level of complexity of new business opportunities. By combining these three together the situation asks for innovation. To adapt to the changed customers’ preferences, to deal with the transparency of the market and the more globalised retail environment innovation is needed (Gómez-Mejía et al., 2007; Reinartz et al., 2011; Rossi and Chintagunta, 2016).
Innovation is often not a systematic process and therefore it is difficult for organisations to make innovation processes feasible and replicable. The cultures, values and norms play a role in how innovation processes are determined (Escalfoni et al., 2011). These characteristics reflect how organisations work. As stated previously, family businesses are characterised by a unique set of norms, values, cultures and processes (Kellermanns et al. 2012; Parada and Viladás, 2010). It is therefore important to consider how innovation is influenced by the family firms in combination with the interpersonal communication processes.
2.3.1 Innovative behaviour of retail family business
The retail industry is characterised as an industry that has a lack of innovative capacity. The innovative diffusion and implementation of new technologies within the retail industry are far behind other industries (Pantano, 2014). The literature on innovation within the retail-industry is relatively new and still quite fragmented. This causes a lack of knowledge in retail specific characteristics of innovation behaviour (Hristov and Reynolds, 2015).
What is known is that a few retail organisations are innovative. These retail-organisations are innovation-adopters rather than the founders of new innovations. The reason for this is that most retail firms are having their main focus on the selling activities (Pantano, 2014). This causes a lower level of innovative behaviour, and this is even stronger among the retail family businesses. They are more reluctant to change (Kellermanns et al., 2012).
13 industry has different levels of innovation adaption compared to other industries, it can be interesting to find out if storytelling is related to innovation behaviour within this type of industry.
2.4 Storytelling
Storytelling is a communication process and is seen as a form of knowledge sharing. It is defined as “a detailed narrative of past management actions, employee interactions or other intra- or extra
organisational events that are communicated informally within the organisation “(Swap, Leonard,
Shields and Abrams, 2001, p. 103). Storytelling in this research refers to a detailed narrative that is shared between the family members of different generations from the family businesses in a less formal setting. Storytelling is also used nowadays as a knowledge management tool (Escalfoni et al., 2011).
Storytelling is seen as a strategy for creating an advanced understanding of professional practices. By using this method, it facilitates family members to capture, code and validate knowledge that was created within the family firm (McDrury and Alterio, 2001). Storytelling is the communication process between family members of different generations within the family business whereby knowledge is shared.
Storytelling creates an environment where experiences of the individual family members are shared. The narrative of sharing stories builds trust, cultivates norms, transfers tacit knowledge, facilitates learning processes and generates emotional connections (Sole and Wilson, 2002). Within organisations, it is said that storytelling helps to promote and facilitate communication processes for every organisation. Storytelling speeds up organisational change and stimulates innovation (Kleiner and Roth, 1996). The stimulation of innovation occurs due to the fact that the organisation learns from their mistakes by sharing experiences with each other. However, it is not known yet whether this directly influences innovation behaviour of retail family business, or that it should be seen as an indirect effect. This is because of the unique characteristics of the family businesses. Storytelling is a recollection of knowledge that is created by past events that occurred within an organisation (Escalfoni et al., 2011).
This type of knowledge sharing is hard to classify and this makes it hard to analyse stories shared (Sole and Wilson, 2002). Family firms are characterised by a unique family language. Through this language, family members are able to communicate efficiently and share more information (De Massis
et al., 2015). This language arises due to fact that family-members are socially connected to each other
14 Within the group-setting explanations are given about how the different generations look up to stories shared. Storytelling will especially help the new generations to become clear about the past, to approve the present and justify future actions and ambitions after the stories have been shared (Garud, Kumarswamy and Karnoe, 2010). New generations in the family business are more focused on innovation, whereas the older generations cling more to old structures and their current ways of working (McCollom, 1992; Nieto et al., 2015). Storytelling helps the new generation to analyse the environmental, technological and organisational changes which are needed to become more innovative (Jaskiewicz et al., 2015). Rivera-Vazquez et al. (2009) found in their research that knowledge sharing is of critical importance for innovative behaviour.
2.4.1 Sense-making and storytelling
Storytelling does not always give an objective story. The listener and/or storyteller are making sense of a story by a combination of thinking and acting (Colville, Brown and Pye, 2012). Sense-making is the process of individuals and groups when they attempt to explain novel, unexpected or confusing events (Weick, Sutcliffe and Obstfeld, 2005). By doing this the stories are put in a frame of thoughts of the individual or a group within the organisation. They are giving an image to the story. The sense-making processes in family businesses help the different generations with sense-making sense of emerging activities (Kammerlander et al., 2015).
Research states that storytelling, sense-making and organizing are interlinked (Colville et al., 2012). By sharing the stories, the listener is able to give his own created meaning on the understanding of the story within the context of the organisation. Sense-making is the interpretation of the individual or groups given to the story that is shared with others (Weick et al., 2005). Storytelling occurs always with more than one person involved. Therefore, individuals in organisations are building knowledge together, when they are responding to situations they encounter (Weick, 1995). This affects the knowledge existing within the organisation. Emotion also plays an important role in the sense-making process (Maitlis, Vogus and Lawrence 2013). Emotions shape the way stories are interpreted. Different forms of emotions lead to a variance of outcomes in storytelling.
2.4.2 Contextual factors of storytelling
Research has found that the process of storytelling is complicated, and two things are important to take into consideration when analysing the process of storytelling (Mcdrury and Alterio, 2001). Firstly, why are stories told? The distinction is made in an emotional release of the family members who want to share their feelings and make sense of particular events within a given dialogue (Mcdrury and Alterio, 2001).
15 CHARACTERISTICS EXPLANATION
1. THE SETTING This characteristic analyses where storytelling takes place. The differentiation is made between more informal or formal locations.
2. THE LISTENERS Analyses who are involved in the process of storytelling; how the dialogue occurs: a single listener or are there multiple listeners?
3. THE STORY Differentiates between spontaneous storytelling and pre-determined story-telling
Table 2: The three key characteristics of storytelling (Source: Mcdrury and Alterio, 2001)
The combination of these three questions creates an overview and can therefore help with the understanding of storytelling in family businesses (Mcdrury and Alterio, 2001). Mcdrury and Alterio (2001) created pathways of storytelling in their analysis which are formed based on the combinations of the characteristics.
The reason for sharing stories in combination with the three characteristics will give an overview of how storytelling occurs within the family business. The effect that storytelling has within the retail family business on innovation behaviour has not been investigated before.
2.4.3 Transmedia storytelling
Communication processes are subject to change because of the increased role of information technology (Scolari, 2009). New ways of communication styles arise by making use of the digital technologies. Storytelling is influenced by multi-media channels which creates possibilities to exchange stories via different multi-media platforms. This type of storytelling is called transmedia storytelling (Jenkins et al., 2009). Transmedia storytelling is a complex phenomenon but it is important to consider that this type has enlarged the way storytelling can take place within family businesses (Scolari, 2009). It is possible that within the retail family business, transmedia storytelling is already taking place. However this has also not been investigated before either.
Informal
Setting
Multiple
Listeners
Sponteneous
Story
Formal Story
Single
Listener
Pre-determined
Story
16 Altogether it can be said that storytelling is a complicated process. The retail industry has proven to be reluctant towards innovation. Combined with the unique culture of family businesses, it is unclear how innovation behaviour is influenced by storytelling.
A positive relationship between storytelling and innovation is found, when different generations of the family are involved within the management layers of a family. These stories are shared among the family members from the different generations involved within the firm (Kammerlander et al., 2015). This relationship has been found in the Sardinian wine industry, however this relationship has never been investigated in any other industry.
2.5 Organisational culture
Family firms are differentiating themselves from non-family firms by their unique organisational culture. The founders and/or owners of the family business are playing an important role in the creation and development of an organisational culture (Hatch and Schultz, 1997). The organisational culture is “Underlying values, beliefs and principles that serve as a foundation for an
organisations management system and behaviours that exemplify and reinforce those basic principles”
(Denison, 1990 p. 2). Over the years when new generations and family members are entering the organisation, the organisational culture changes. Cruz, Hamilton and Jack (2012) argue that the organisational cultures are patterns of values, norms and beliefs that are strongly influenced by a history of shared experiences. This reflects that the interaction of the group of individuals over a period of time will influence the organisational thoughts and behaviour. The external environment will have a bigger influence on organisational culture when the firm exists for a longer period of time (Laforet, 2013). Organisational cultures cannot be completely managed. Cultures are dynamic models and can be seen as a social processes (Hatch and Schultz, 2002; Schein, 1984).
17 Research states that it is possible to see similarities and differences in the national culture of different countries. Hofstede’s cultural dimensions are mostly used for describing national cultures (Hofstede, 2004). The different dimensions show the differences among different national cultures. Cross-national differences in cultures arise to differences in the national culture and other contextual differences which can have implications on how family businesses innovate (Nam et al., 2014).
There are different national cultural aspects that influence the level of innovation. The national cultural dimensions are seen as characteristics that could help or withhold the adaption of change by the organisation (Rivera-Vazquez, 2009). Research has found that differences in national cultural dimensions have an effect on the way the culture of retail organisations and the retail environment are structured (Dimitrova, Rosenbloom and Andras, 2016). Uncertainty Avoidance is one of the dimensions that has an influence on innovation. This dimension describes the way that organisations, countries and individuals deal with the fact that the future is unknown. The definition used is “The extent to which
members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid this” (Hofstede, 2004, p. 167).
Research has shown that there exists an inverse relationship between the level of uncertainty avoidance and innovation behaviour (Nam et al., 2014). When the organisational culture is characterised by high uncertainty avoidance, these firms are avoiding the chance of an unpredictable future and are therefore less willing to innovate. Low uncertainty avoidance implies that the culture of these firms is more comfortable with uncertainty and risk, which will lead to higher degrees of innovation (Nam et
al., 2014; Rivera-Vazquez et al., 2009).
Within the context of innovation behaviour and storytelling, it can be interesting to see if the level of uncertainty avoidance which is part of the organisational culture affects the relationship between storytelling and innovation behaviour of retail family businesses. Especially because there is nothing written as yet over the effect of storytelling on innovation behaviour in the retail industry. All potential other explanations of differences should be included. Therefore, it is important to gather data within companies with different levels of uncertainty avoidance and where the organisational culture is analysed.
2.6 Theory based overview
18 concepts shown in Figure 2 is tried to find out how the concepts are related and how each of the sensitising concepts can be filled in.
Figure 2: The sensitising concepts used at the start of the data collection
Storytelling
Family Business
Innovation
Behaviour
Retail
Organisational
19
3. Research Design leading to Empirical Answers
3.1 Research objective
This study will try to understand if and how storytelling among family members in retail family businesses influences innovation behaviour. By finding out how family members think about storytelling and how the information is used for innovation, it is tried to find an answer to the research question. This research will be carried out via an exploratory qualitative research approach. The focus-area has not been investigated before and is still in the initial phase (Blumberg, Cooper and Schindler, 2014). By using a qualitative method it is possible to grasp the abstract phenomenon researched (Miles and Hubermann, 1994). Qualitative research is fundamentally suited for putting the meaning that people place on the events, processes and structures, which happen in their daily life, in context. By using qualitative research it is possible to locate these meanings to the social context of the family businesses (Miles and Huberman, 1994). An inductive method is used, theoretical ideas are generated on a higher level of abstraction, which will lead to the construction of a conceptual model (Eisenhardt, 1989). This research will try to find an answer to the research question:
What do we know about storytelling in relation to the innovation behaviour of retail family businesses?
o What is the role of the organisational culture? 3.2 Research design
Firstly, existing theories are analysed to narrow down and direct the gathering and analysis of data. This is performed to be aware of elements that otherwise could have left behind or overlooked (Locke, 2001). Second, multiple forms of data are gathered to find an answer to the research question.
20 All family businesses will be preferably small- and medium-sized enterprises and the family business has to be owned by the family for 100%. Firms are considered as small- and medium-sized enterprises when they have 249 or less employees (Eurostat, business statistics, 2016). This is because of the influence of other factors on innovation behaviour in large family businesses. The bigger the family businesses become the more the businesses are influenced by non-family members and the external environment (Schjoedt et al., 2013). The retail-sector is described as a business that sells goods or services via traditional stores or/and online-channels (Verhoef et al., 2015). Another important criterium is that each retail family firm chosen, has shown innovative behaviour over the last year. Innovative behaviour is defined by the family members itself. By every case selected is asked whether they thought they have shown innovative behaviour. Innovative behaviour was therefore not defined, but determined by the family businesses. If they answered yes, the case was selected for the interviews. Innovative behaviour is important. Without having innovative behaviour, it is impossible to find if there was an influence of storytelling.
To find out if there is a difference between organisational cultures, it is chosen to use the national culture of countries as an indicator for different organisational cultures of retail family businesses. The reason for this is that research has shown that organisational cultures are adapted versions of broader cultural paradigms which is the national culture (Schein, 1984). Only one specific national culture characteristic is considered for making the selection about countries and family businesses used. The dimension Uncertainty Avoidance is chosen because this dimension has an influence on innovation behaviour (Nam et al., 2014).
Belgium and Netherlands are the countries that have been compared. A relevant difference in their Uncertainty Avoidance levels is found (Table 3) (Hofstede, 2004). Belgium has one of the highest uncertainty avoidance levels around the world, whereas the Netherlands belongs to one of the lower countries regarding their level of Uncertainty Avoidance (Clearly Cultural, 2009; Hofstede, 2010). These numbers are based on the national culture. Other cultural dimensions of both countries are relatively similar which makes it possible to compare this specific aspect better (Hofstede, 2010). Beugelsdijk, Maseland and Hoorn (2015) have shown that the scores of the different cultural dimensions from countries will change over time. This occurs due to the fact that countries become richer and the culture of countries changes. But the relative difference between countries over the scores stays approximately the same and stable.
The Netherlands Belgium
Level of Uncertainty Avoidance
53 94Table 3: The level of uncertainty avoidance (source: www.geert-hofstede.nl)
21 (Zikmund, Babin and Carr, 2010; Eisenhardt and Graebner, 2007). This theoretical sampling method is often used as the sampling-method for an inductive analysis. Theoretical sampling allows the selection of cases which are likely to extend the emergent theory (Eisenhardt, 1989). To select the right cases, selection-criteria are set-up (Blumberg et al., 2014). Multiple-cases are used to find the differences and similarities among the different family businesses. This makes it possible to deepen the understanding and explanation from the phenomenon researched, which leads to an in-depth understanding of the outcomes (Miles and Huberman, 1994; Eisenhardt, 1989).
Within this inductive research strategy, the abbreviated grounded theory is used. The grounded theory was invented by Glaser and Strauss (1967). This approach helps with their distinctive methodology of analysis to generate an inductive theory about a new substantive area, by analysing data that have been obtained and analysed systematically (Glaser, 1992; Strauss and Corbin, 1990; Glaser and Strauss, 1967). This method is ideal for the exploration of relationships and behaviour of different family businesses where little exploration has been done before. All individual topics are covered in the literature review, but there is no research found that covers the integrated overview from the different topics.
3.3 Data collection
Multiple forms of data are used to operationalize the topic investigated. This multi-method approach of Brewer and Hunter (1989) focuses on the development of theoretical insights by using multiple types of data. The following steps are completed in this multi-method approach.
Step one, a retail-industry expert consultant with a background in family businesses was asked to share his vision regarding family businesses and the influence of storytelling on innovative behaviour. The set-up of the retail industry expert-interview was based on the literature review. This helped to adapt the questions asked within the interview protocol and to make sure all important aspects are covered in the interview-protocol. The data was also used to underpin the findings with more data.
22 All cases had to meet these criteria up to a certain extent. The following criteria are used to pick the right retail family business:
The company is preferable a small or medium-sized retail family business. The family business has to be owned by the family by 100%.
It is preferable that the first and second generation are still active within the organisation.
At least one family member has to be in the board of directors or management of the family business. The firms have adopted an idea or behaviour, whether a system, policy, program, device, process, product or service, that is new to the organisation over the last year and this had been judged by the family members themselves.
The family business has to be located in Belgium or the Netherlands.
Before the interviews are carried out, the interview-protocol was checked during a pre-interview. This was done with a first generation retail family business owner. This interview is used to make sure that the right questions are asked, the questions were understood in the right way and asked in the right order (Baarda, Goede and Meer-Middelburg, 1996). The last step involved the interviews which are carried out at the family businesses selected.
The process of data-gathering involved the following. Firstly, one family member from the older generation is interviewed individually on his perspective on the topics. Afterwards, the younger generation family member is interviewed on the same topics. Finally, the two of them are set together in a group setting and asked some final questions regarding the phenomenon researched. These three interviews will be executed with every case selected. The interviews will be carried out in Dutch and therefore the interview protocol is translated into Dutch. The reason for this is that the family-members are more comfortable with sharing their thoughts, feelings, experiences and ideas in their native language.
The interviews will be recorded and afterwards transcribed into Dutch, which makes an in-depth analysis of the interviews possible. Each transcript is checked by the interviewee to make sure that there was no misunderstanding during the interview. The time constraint did not allow the researcher to transcribe the interviews into English.
3.3.1 Interview protocol
23 during the interviews. This allows us to add important and interesting insights which could arise during the interviews and gives the opportunity to probe furthers questions (Myers, 2009). Five sensitising concepts are determined by the literature review and were the starting point used for the interview protocol (Böhm, 2004) (Appendix C; Appendix D).
a. Interview with Retail Industry Expert:
The interview with the retail industry expert took place before the data gathering process started with the selected family businesses. The interview with the retail industry expert was step one of the data analysis process. Appendix A shows the overview of the questions asked. The transcription of the interview is included in Appendix F. What is learned and seen as important from the interview by the retail industry expert can also be found in Appendix G. The retail industry expert interview showed that a few things had to be added to the interview protocol. These topics are mentioned in Appendix G by the translated quotes. These are the elements used for further elaboration within the case-interviews. By having acknowledged the important information, this is used for further elaboration in the interviews and concerned during the data analysis.
b. Test of the interview protocol:
Before the individual interview and groups interviews took place the interview protocol was tested with a retail family business owner from the first generation. The interview was not transcribed and audiotaped because this family business owner was a family relative of the researcher. Therefore, it has been decided not to add the transcript of the data, since it could bias the data and the outcome. The family business owner already knew too much about the topic investigated, having been regularly involved in discussing the topic.
The focus was on the logical order and the understanding of the questions. Based on the pre-interview the following is concluded and therefore adapted in the pre-interview. The order of the pre-interviews was illogical. Firstly, after the general introduction it was proposed to start the interview with asking the family members about their thoughts and ideas regarding the five themes established and drawing this on the table. However, by having this tested it turned out to be in the wrong order. It is hard for practically experienced business owners to imagine given theoretical relationships before having thought about the themes. Therefore, the order was changed. The final set-up of the interview protocol is explained in the following paragraph.
3.3.1.2 Individual interviews
24 understand and create a feeling about the family business, the organisational culture and to get to know some general information about the chosen retail family business and family members. After the introduction questions, the second part included semi-structured prepared questions. For each theme found in the literature some more detailed questions are prepared which are related to the topic investigated. As shown in the interview protocol the articles from the literature are used to specify the focus points of the questions, they gave direction to the questions.
The interview-protocol focusses on the five sensitizing concepts that have been found in the literature. These concepts are seen as concepts that play a role within this research. However, how these concepts are playing a role and what kind of relationship exists is not clear yet. This is something that will be further investigated within the third part of the interview. The interviewer put five cards on the table and asked the family members about their associations with the five themes (Figure 3). The associations in words of the interviewee are written down on memo-papers and added to the cards on the table. By having the cards on the tables it will make it more visible to share his ideas and to show the relationships. The final part after this arrows are added to the table and the interviewee is asked to draw his view on how he thinks the relationship is between the given sensitising concepts.
This visual representation is used because the concepts investigated are broad and abstract phenomena and the boundaries are not yet clear. The visual representation helps in keeping an open mind and trying to understand each potential explanation and helps into unfolding potential answers or aspects that could have been overlooked in the first part of the interview (Ewenstein and Whyte, 2009). By having the visual representation less things are taken for granted and it is assured that all important aspects are covered (Manney, 2010). At the end of the interview pictures are taken from the image created by the interviewee. This will be part of the data that has to be analysed, in order to find out how the respondents think that the sensitising are related with each other.
Figure 3: Sensitising concepts interview
The interview ends with the question if the interviewee thinks that each theme has been discussed enough, what they thought about the interview and if they have any further questions.
25 3.3.1.3 Focus group
Each family business case ends the interviews with a small focus group or group interview. This is to briefly discuss the answers given within the individual interviews and to ask them together about some general topics. The model created by each family member in the third part of the individual interview is discussed. What are the differences, similarities and do they agree with each other’s view on the relationship between the five themes? When there is enough time for further questions, some general questions are prepared (Appendix D). These questions are not directly related to the topic investigated, but are used to see how the different generations interact with each other, the interpersonal communication process within the interview. Storytelling itself is simulated within these focus groups. 3.4 Data analysis
The data-analysis involves multiple forms of data. Data exists of the transcripts of the interviews, focus groups, the associations and visual representation of the sensitising concepts by the interviewees. Multiple methodologies of analysing the data are needed since this enhances the qualitative rigor during the inductive analysis, and it involves triangulation of the data which will enhances the outcome of the data and the validity (Gioia, Corley and Hamilton, 2013).
The abbreviated version of the grounded theory is chosen as a method for the analysis of the interviews and focus groups (Willig, 2013). The grounded theory is a methodology that allows researchers to have a look under the surface of the information investigated. By doing an in-depth analysis, it allows us to create a deeper understanding of the phenomena researched (Charmaz, 2006). The reason for using an abbreviated version is that there are time constraints. It is impossible, within the given time-span of this dissertation, to implement the full version of grounded theory, therefore the grounded theory was implemented on a smaller scale. This research will not go back and forth between the literature review and data until theoretical saturation occurs, similarly as what happens in the full grounded theory methodology (Willig, 2013; Glaser and Strauss, 1967).
Within the abbreviated version of the grounded theory the theoretical sensitive coding method is used for analysing the transcribed interviews. This is a method that analyses the data in an inductive manner (Bowen, 2006). The method generates theoretically strong concepts from the data to explain the phenomena researched (Glaser, 1992). Within this method it is not possible to have a definite theory before starting with gathering the data. The literature review shows it is not possible to make the relations, logical links and influence clear. The patterns that exist will be described after the data analysis. Therefore, the conceptual model is used as an outcome afterwards (Green, 2014).
26 insights of each individual case. Based on this understanding, patterns can be searched for among the different cases. This occurs in the second type of data analysis. Cross-case analysis is used during the third step of the data analysis. Hereby, all data is put together and patterns are searched for by the comparison of the different cases (Eisenhardt, 1989; Yin, 2011). The findings show the similarities and differences which lead to the set-up of the theory.
Firstly, open coding is used to find the codes within the different interviews. The interviews will be analysed on the meaning of the data and to categorise the data given on a low level of abstraction. This leads to an open and unfocused stage of data analysis (Moghaddam, 2006). During this first step, the data is reduced to a smaller set of concepts. Every interview is analysed open mindedly. This ensures that all possible interpretations are considered (Moghaddam, 2006). Potential theoretical codes which are found in the literature review are avoided within this step. This could limit our view towards interpretations and will lead to new insights (Böhm, 2004). The first-order codes help in the next steps of the data analysis process.
By having the first codes set, the second step involved making connections between all the codes given and trying to integrate the codes with each other (Glaser and Strauss, 1967; Böhm, 2004). This leads to a further categorization of the data. The codes are classified into more theoretical constructs or often called coding family or which could be events, facts or causes (Böhm, 2004). By doing this, it helped to create common names and themes within the data and to get the diverse concepts more integrated. A coding list which includes the coding family and first concepts found is made to give an overview of the connections made within each individual case (Appendix J). Within this step each case is analysed on the individual level, the outcomes from the individual cases are discussed in the beginning of the findings.
The third and last step during the data-analysis process is selective coding which is executed in the cross-case analysis. During the last step the core categories are searched by comparing all the data together (Böhm, 2004; Glaser and Straus 1967). The cross-case analysis is executed in the following order. First, the retail industry expert interview is analysed and afterwards the interviews of the different cases are analysed for a second time. The third and fourth stages involved the analysis of the associations given to the sensitising concepts and the visual representations of each of the family members (Appendix
H and Appendix I). The core concepts found are shown in table 5. These are the key characteristics
27 3.5 Transparency and ethics
To keep the data-gathering and data analysis process transparent and to prevent this research from any ethical issues, the following decisions have been made. All participants from the different family businesses have signed an interview consent form before participating in the interview. The reason for this form is to make sure that the participants agree to their involvement of sharing content and understanding the aim of the research (Appendix B) (Brinkmann and Kvale, 2015). All family businesses and family members selected are informed about the set-up before the start of the interview and this is again clearly explained at the start of the interview. By signing the interview consent form, they agreed to participate in the research project and corresponding procedures, however they still have the right to quit at any moment.
28
4. Family members’ thoughts on Storytelling, Innovative
Behaviour and Retail Family Businesses
4.1 Case overviewOur research used four different cases of family businesses and a retail industry expert for the gathering of the data. Each family business selected fits as much as possible into our criteria. Table 4 gives an overview of each family business showing which level they fit in the selected criteria. A more extensive introduction to the family businesses can be found in the Appendix E.
Family Business Employees Family ownership Active generations Family Board members Innovative
behaviour Location Type of store
Case 1 120 100% 1st and 2nd 1 Yes Netherlands Supermarket
Case 2 650 100% 1st and 2nd 2 Yes Netherlands DIY
Case 3 50 100% 3rd and 4th 2 Yes Belgium DIY
Case 4 9 100% 2nd and 3rd 3 Yes Belgium DIY
Table 4: Overview selected cases
The process of analysing the data has shown interesting insights into each of the cases. By having each case analysed individually the following section will give an overview of the within-case analysis. The descriptions below show the sensitising concepts including the second order themes found during the data analysis that can be found in Appendix J.
4.2 Within-case analysis 4.2.1 Case 1
This family business is an organisation whereby the atmosphere itself has proven that the relationship between the family members is really good. They have
strong social ties. The son of the founder entered the
organisation with clear goals and ambitions. Using experience gained in other family businesses they set-up clear agreements where the separation of roles was
determined. The younger generation has the lead in the organisation nowadays but more family members are involved. This could be seen as high family involvement. It is an organisation whereby all generations are learning by doing, the daily practical experience leads to the organisation moving forward quickly.
The organisational culture can be characterized as flat, they have an open culture and everything can be said. Dedication to their work is what they ask from all concerned, even though changing behaviour is not always that easy. By speaking to both generations they have shown that people
are the key players in their organisation and this is where they care about. They are having a progressive
approach towards innovation, through which they are trying to distinct themselves from competitors. Quote younger generation: “I noticed that I was doing things in a different way. Therefore was it clever and wise to have a lot of contact with my father. That was not always easy and fun.. But it was necessary to learn and create shared agreements”
29 The innovative behaviour assures continued movement forwards. The organisation characterised by a preference for Innovation > Standardization, the family owners are always taking the
initiative to implement new activities, but they never take decisions before they are well-considered
The retail sector has for them negative and positive aspects. The use of information technology
increases the progress of the family business. On the other side, the value chain slows down the progress of the family business.
Storytelling is really important for them to create shared agreements. They do not have fixed settings where storytelling takes place, but by having thought about it they both confirmed that
storytelling is unconsciously always there. There are no demarcation lines, everything is negotiable. 4.2.2 Case 2
The second organisation is a family business that has grown steadily over the last years. By now, they are a medium-sized enterprise. This family business is characterised as one with strong social ties. The family members speak a unique family language whereby they understand each other without saying a single word. The
family members involved are entrepreneurs with a lot of practical experience, they are learning by doing and the involvement of family members is high. The second generation is preparing himself for a future take-over of the family business. However, the founder still has the lead in the organisation. This is one of the examples whereby it is shown, that there is a clear separation of the roles.
The organisational culture can be seen as more hierarchical then in the first case. There is a high dependency on the management and the family business is larger which leads to the communication lines being longer. People are also key in this organisation, this is shown by the trust in people which is of high importance. They are not risk-takers and are always making informed decisions.
They show innovative behaviour only when they see the urgency in it. Therefore they prefer
standardization > innovation. Both owners said that innovation is not their core business, they are
following their franchise organisation in it.
The retail sector has for this family business also negative and positive aspects. The use of
information technology increases the progress of the family business, whereby the external pressure
assures the alteration in the industry which is needed. One of the downsides is also here that the value
chain slows down the progress of the family business. The big franchise organisation cannot make the
desired changes as quickly as they would like to.
Quote older generation: “It is something that belongs to your DNA. When your father has given
30 Lastly, storytelling is something that occurs non-stop and there are no fixed settings where it takes place. Storytelling opens discussions, by which the urgency for innovation is strengthened. However this organisation has clear demarcation lines, it is clear who has the lead in decisions and on which moments things can be discussed.
4.2.3 Case 3
The third case is the only family business whom does not belong to a franchise organisation. This family business can be described an organisation which is quite similar compared to the previous two cases. The owners
have a clear role distinction, father cares more about the commercial side of the organisation and the son is heavily concerned with the marketing and online activities of the family business. The family relationship is unique and functions as a social bond, whereby the strong social ties are also confirmed. The family members are never obliged to enter the family business, but by stepping in this has shown
high the family involvement and commitment is. This organisation is also characterised by the words learning by doing. By being involved in the organisation for a long time, the family members have
learned about the organisation.
The organisational culture can be described as flat, where those concerned are dedicated to doing what they are doing. They want to offer high service levels. The service quality is key in this organisation, they have clear long-term vision for the future where they want to achieve high service levels.
The innovative behaviour is different than in the first two cases shown, this family business is also taking a lot of initiatives and new technologies are taking a bigger role in the organisation. However this was the only family business whom explicitly mentioned the external help they have for the implementation of new activities. In the past they have been sceptical to innovation and by having well
considered the advantages and disadvantages this had lead to a high level of innovative behaviour
shown.
The retail sector has for this family business exactly the same influencing aspects. The use of
information technology increases the progress of the family business and the value chain slows down the progress of the family business. But for this organisation it is it not the franchise organisation that
slows down the process but their suppliers.
Storytelling is unconsciously always present, their unique family language is spoken even on holidays with the family. Therefore, they have no fixed settings where storytelling takes place. This form of communication strengthens the urgency for innovation. By complaining and pushing towards innovation the younger generation does convince the older generation.
Quote younger generation: “I need external people to show and prove that an alternation is needed”.
31 4.2.4 Case 4
The last case differs the most from the other cases. This family business is characterised as an organisation with weak social ties. By having a cousin and uncle involved it was shown that stronger ties probably exist more between
fathers and their children. Another difference is the low family involvement. The current owner has the lead and he preferred low family involvement. This is due to events in the past where heated discussions and arguments have taken place. Among the different generations there was not a clear role distinction, it was more a hierarchical distinction. The current owner determines everything. The current owner was
not clear about the future, they are considering whether to sell the business.
The organisational culture can be described by the following words: money is the key. Profit is the most important aspect. They are reserved towards innovation and they have a wait-and-see attitude. This organisation is hierarchical. There is low involvement of the other employees and the owner (older generation) has a dominant influence over the family business.
This family business has no urgency for innovative behaviour, there is no reason for changes and they will continue with old processes and standards. Therefore there are no initiatives for innovation, this relates to the wait-and-see culture of the organisation. The retail-sector slows down the progress
of the family business by their value chain. They have a problem with finding the right employees.
There is not a lot of contact between the family members, the younger generation has the lead in the daily operations and the older generation makes the major decisions. They have contact on fixed moments at fixed settings, this is where storytelling occurs. This shows a low frequency of storytelling. Only in times of problem solving are there more contact moments.
4.3 Cross-case analysis to give substance to the sensitising concepts
The above section has shown the individual outcomes of each of the family businesses involved. However, this research involved multiple forms of data. By intertwining them all together, the core categories, relationships and differences are found. The outcomes are discussed in the coming section. In general it was shown that there were clear similarities and differences within the cases considered. The concept-book in Appendix K shows the definition and example quotes where the information was coming from. This gives a clear overview on the exact meaning of each of the sensitised concepts.
Quote older generation: “I do not interfere with the personnel-planning, I care about the profits”.
32 Based on this analysis three of the sensitising concepts
have changed slightly. The sensitising concept, family business has changed to the uniqueness of family businesses. The reason for this change is that this word uniqueness in the concept characterises more why family business are different from any other type of organisations. The uniqueness is strengthened by the concepts given in Table 5.
The second change in the sensitising concepts is retail, this has changed to retail-industry. During the interviews it has been said multiple times that retail is only seen as the industry where they are active in, some family members even said that they do not have any knowledge about retail. This suggested that the description of retail-industry fits better to the definition found in the data.
The last change in the sensitising concepts is the change of innovation behaviour to Innovative Behaviour. Based on the analysis it has been found that innovation behaviour is not the right sensitising concept to use. Innovation behaviour is more concerned about the tangible activities and implementation of innovation. A better sensitising concept to use is innovative behaviour, this sensitising concept describes the conduct of family members towards innovation. This shows how each of the family members has a high regard for innovation. Each of the sensitising concepts have corresponding concepts to describe (Figure 5). Based on these the relationships have been found, these are described in the coming subparagraphs.
Quote- retail-industry: “I do not have a lot of knowledge about retail. Especially not in respect to the content of this industry”. (Case 2,
