Pragmatic learning in family SMEs : a qualitative study of functional overload among family SME owner-managers

Purpose: Learning in organizations is well-recognized as a key determinant of innovation and success in competitive markets, and a rich literature examines learning mechanisms in large-sized and professionally-run organizations. Relatively little is known about the learning processes in family-run firms, most of whom are small- and medium-sized enterprises (SMEs) led by a single family SME owner-manager connected in a family network. Therefore, the purpose of this study is to investigate how family SME owner-managers engage in learning and how those learning processes are affected by family SME-specific characteristics. Design/methodology/approach: Using pragmatic learning theory as an interpretive lens, this study conducts a qualitative multi-case study involving 61 interviews in family SMEs with family SME owner-managers, family members, employees and customers. Findings: The within- and cross-case analysis helps identify the mechanisms, barriers and enablers of learning and innovation in family SMEs. The study develops and pinpoints the family owner managers’ “functional overload” as a major barrier to learning and employee empowerment, family-members’ support and customer feedback as critical resources in overcoming such functional overload. Yet, these resources turn out to be major amplifiers of functional overload in later phases of the learning process, thus impeding learning and innovation. Originality/value: The study provides novel insights into learning processes and innovation within family SMEs, outlines the double-edged involvement of family members, employees and customers for learning processes, and provides nuance to pragmatic learning theory.