The Mediating Role of Innovation between Family Culture and Business Performance

Due to increasing specialization, outsourcing and competition from the globalization process, family businesses are under more pressure than ever to innovate and improve performance Error! Reference source not found.. The innovation side of family business is critical to businesses' survival and growth. Yet, to date, scant attention has been given to innovation in the world dominant form of business - family business. This study seeks to fill these gaps by exploring the links between family culture, innovation and business performance. The study was undertaken in the Malaysian context using a sample of 174 public listed family businesses. The data were obtained through questionnaire survey conducted over a period of six months. The results show that innovation is significantly related to business performance and positively mediated the family culture-business performance. This demonstrates that management should foster a strong culture among family members who are involved in the business in order to enhance both business innovation and performance. (C) 2016 Published by Future Academy www.FutureAcademy.org.uk