Impact of wise leadership, workplace friendships on open innovation in family firms: a developing country perspective

Purpose: This study draws upon the hybrid approach of the resource-based view and social capital theory, and aims to develop and empirically validate a model that examines the relationship amongst wise leadership, workplace friendships and open innovation (OI) in family firms (FFs). Design/methodology/approach: An online survey was conducted to collect data from a sample of 381 firms from a developing country. Additionally, this study used AMOS software and structural equation model to empirically test the proposed hypotheses of the theoretical model. Findings: Findings show that wise leadership has a significant, positive indirect effect on stimulating OI in FFs via its influence on building workplace friendships and overcoming knowledge–strategic and collaboration–organisational challenges. Practical implications: To improve OI, top management teams of family businesses should encourage wise, intelligent, well-informed and strong leaders who drive change. Moreover, they should establish small group, “smart-world” networks for specialised innovation to facilitate friendship based on trust and competence, and develop the coordinating role of family leaders in these networks. Originality/value: This study complements and advances previous research on OI in many ways. Firstly, the current study proposes a conceptual model that demonstrates the interrelationships amongst the main variables in Iraqi FFs. Secondly, this research explores the crucial mediating role of workplace friendship, which capitalises on the principles of friendship in the context of the acquisition, accumulation and exchange of knowledge, thereby overcoming the challenges associated with innovation.