Innovation takes place in the family businesses when there persists a comparison with the global corporations. The business seeks to develop innovative strategies so as to remain competitive (Zhou, 2014). But this motivation is enforced and not seen as something intentional. Hence, this makes the attitude of the business towards the idea of innovation more fragile or weak. Considering the example of Toyota, the family tradition is treasured and hence, they ensure that they take the accountability of the mistakes or errors committed by them so as to secure their image among the consumers and the market (Richter, 2000). This approach has enabled the Chinese firms to get absorbed in the Chinese societies and hence, they are accepted well due to their approach of seeing the consumers as not mere profit generation tools but as family members (Nieto, Santamaria & Fernandez, 2015). The essence of being competitive in the market and competes with the global corporations has led the family firms to stir a new wave of doing their business which is appealing for the new generation who would invest their time, money and effort in pursuing the family business. The benefits of being innovative are that the organization are enabled to focus on the quality of the products to retain their loyal consumers, build an internal infrastructure in an intellectual manner, and work upon the enhancement of the knowledge of the business person’s capabilities (Simons, 2013). This practice provides the firms an opportunity to develop themselves over the hostile and intense competition in the market and also lessen the chances of vanishing from the business world (Parsons, 2013).
In the study conducted by Shi (2014), it is stated that the lack of innovation sometimes can be detrimental for the business and also projects lack of superior knowledge possessed by the business persons. This happens when there is lack of inclusion of the capabilities which would have been acquired if exposed to the global pool of talent. Other issues which may contribute to this situation in a business are inability to recruit the skilled workforce, higher rate of attrition, instability in the performance of the employees and so on (O’Hara, 2004). However, in the study conducted by Liu and Chen (2014), the current situation of the family businesses in China is the fastest growing element in the Chinese community and this enables the businesses to compete globally with the multinational companies and produce good quality of products and services. Therefore, the future of these family businesses in China is decided with the assistance of the heritage and the political urge to sustain the business environment in China (Brunero, 2015).