Innovation capacity, with prosocial leaders, increases family businesses’ performance¹

A capacidade de inovação, com líderes pró-sociais, incrementa o desempenho da empresa familiar

Abstract

Purpose:

This study explored the relationship between prosocial leadership, innovation capacity, and organizational performance in family businesses.

Originality/value:

The study presents a model resulting from the relationships between three theories in the context of family businesses. Studying prosocial leadership and innovation capacity enabled a systemic view of new perspectives that can better interpret the reality of family businesses. Regarding empirical and social contributions, we suggested lines of action for developing prosocial leaders and fostering innovation, thus contributing to organizational performance.

Design/methodology/approach:

The study had a quantitative approach with a descriptive nature, using the survey research method and statistical techniques for data analysis. The sample consisted of 502 professionals who hold leadership positions in member companies of the Association of Santa Catarina Distributors and Wholesalers.

Findings:

The hypotheses confirmed positive relationships between prosocial leadership and innovation capacity, prosocial leadership and organizational performance, and innovation capacity and organizational performance. We also state that innovation capacity partially moderates the relationship between prosocial leadership and performance.

Keywords
prosocial leadership; innovation; organizational performance; associativism; family businesses

Resumo

Objetivo:

O objetivo deste estudo foi explorar a relação entre liderança pró-social, capacidade de inovação e desempenho organizacional em empresas familiares.

Originalidade/valor:

O estudo apresenta um modelo, resultado das relações entre três diferentes teorias, no contexto das empresas familiares. Estudar a liderança pró-social e a capacidade de inovação permitiu uma visão sistêmica sobre novas perspectivas que possam interpretar melhor a realidade das empresas familiares. No que diz respeito às contribuições empíricas e sociais, foi possível sugerir linhas de ação para o desenvolvimento de líderes pró-sociais, fomentando a inovação e, consequentemente, contribuindo para o desempenho organizacional.

Design/metodologia/abordagem:

O estudo teve abordagem quantitativa com objetivo descritivo, utilizando o método de pesquisa survey e técnicas estatísticas para análise dos dados. A amostra foi composta por 502 profissionais que exercem cargos de liderança nas empresas membros da Associação de Distribuidores e Atacadistas Catarinenses.

Resultados:

As hipóteses confirmaram que há relações positivas entre liderança pró-social e capacidade de inovação; entre liderança pró-social e desempenho organizacional; entre capacidade de inovação e desempenho organizacional. Também foi possível afirmar que existe um efeito moderador parcial da capacidade de inovação sobre a relação entre liderança pró-social e desempenho.

Palavras-chave
liderança pró-social; inovação; desempenho organizacional; associativismo; empresas familiares

INTRODUCTION

Exploring the relationship between prosocial leadership ability, innovation capacity, and organizational performance in family businesses is justified by its potential empirical and theoretical contribution.

The family businesses that took part in the study are members of the Association of Wholesalers and Distributors of Santa Catarina (ADAC). The association’s main objective is to foster the development of the Wholesaler and Distributor trade, seeking continuous improvement through an ethical attitude in its relationships (ADAC, 2023). Therefore, investigating issues related to prosociality, innovation, and performance brought evidence on the factors that influence performance and are associated with managers’ skills and attitudes. Examining the relationship between the constructs led to suggestions for people’s development practices.

The study also presents theoretical contributions. The research field on family businesses has shown important evolution over the last decades (Molly et al., 2019). One of the big challenges is to analyze how behavioral phenomena occur in these organizations, especially regarding leadership (De Massis et al., 2016) and how they are developing their projects, designing processes and innovations (Volta et al., 2021).

Several studies approach leadership, among them the papers by Liu et al. (2015), Peltokorpi and Hasu (2015), Neil et al. (2016), Sousa and Van Dierendonck (2016), Garcia and Russo (2019), and Rengel and Ensslin (2020). These researchers concluded that a team’s performance is directly related to the leadership. The articles by Roche and Bedoya (2015), Rodríguez (2015), and Lucatelli et al. (2021), which discuss leadership in organizations and its impact on workers’ welfare, also stand out.

In prosocial leadership, the processes of positive influence generate a transcendental change without seeking extrinsic and material reward, favoring first the persons who are led (Bedoya, 2015). In this leadership style, the leader aims to safeguard people’s creativity, identity, autonomy, and initiative, empowering them in order to multiply that leadership in belonging groups, reference groups, and society.

Innovation, in turn, has been mentioned as a decisive element to enable companies’ competitiveness and continuity (Engelman et al., 2017). Innovation capacity continuously changes knowledge and ideas for new products, internal processes, and systems to benefit the firm and its strategic audience (Lawson & Samson, 2001).

Leadership assumes an essential role in the management of an organization because it allows for satisfactory organizational performance (Garcia & Russo, 2019). On the other hand, organizations’ innovative actions have long been recognized as a key element to achieve better performance. Le and Lei (2019) and Martínez-Román and Romero (2017) highlight that leadership and idea sharing can assist in fostering innovation. For the Oslo Manual (Organization for Economic Co-operation and Development [OECD], 2018), a firm innovates when it makes a change that affects its working methods, production factors, and/or productivity and performance outcomes.

Given this context, this study sought to answer the following question: what is the relationship between prosocial leadership, innovation capacity, and organizational performance in family businesses?

As theoretical basis of prosocial leadership, we used Bedoya’s study (2015), emphasizing the dimensions of communication with prosocial quality, prioritizing the common good, and assuming the complexity of human relationships. As for the construct of innovation capacity, the research was based on the work of Liao et al. (2007), composed of the dimensions “managerial innovation,” “product innovation,” and “process innovation.” Based on Gupta and Govindarajan’s model (1984), we collected data on performance, measured subjectively, and compared it to the closest competitor. The paper is structured in five sections, beginning with this introduction. The second section presents the theoretical review, followed by the methodological approach, data analysis, and discussion. In the fifth section, we present the final remarks.

THEORETICAL BACKGROUND

Leadership in organizations has undergone changes, considering the context of the 21st century. The characteristics and behaviors that emerge influence the behavior and the quality of the relationship between the leader and their followers, also affecting the emergence of new leaders (Rego et al., 2020).

Considering that around 57% of the persons in the Brazilian labor market are up to 39 years old (Brazil, 2020), it is important to consider the existence of prosocial characteristics in leaders who work with people of this age profile. These attributes are well-accepted among employed youth or young adults (Liu, 2021).

The leader is called “prosocial” not for his role but for the profile of prosociality, which is a differential, by knowing how to deal with people’s thoughts, feelings, attitudes, and actions (Cirera & Izquierdo, 2016). The elements that characterize an action as prosocial are the beneficiary’s satisfaction and creativity, in addition to aspects like the identity and self-esteem of the individuals or groups involved, including the action’s author (Roche, 1995).

In prosocial leadership, the leader’s personal ambitions and expectations are oriented toward a greater good (Liu, 2021). From this perspective, Ewest (2019) considers a prosocial leader someone who works with empathetic concern for others, acting altruistically. These leaders have positive intentions, visions, and goals and, in addition, create value (Liu, 2021).

The three factors that identify the prosocial leader are: 1. planning specific goals to improve the present and future of all those involved; 2. the leader’s goals are valuable and beneficial to a large social group; and 3. management decisions and practices are effective (Bedoya, 2015).

Prosocial leadership affects the working environment positively (Bedoya, 2015; Ewest, 2019). The prosocial leader seeks to generate consensual and participatory cultural changes, aiming to create collective models (Escotorín et al., 2014), thus searching for the development of followers who are collaborative members (Tintoré, 2019).

The most important recognition of a prosocial leader is based on the collective judgments of the people in their group about the depth of the positive impact and its range for serving the common good. Prosocial leadership can achieve a profound transformation, which in turn can foster employees to be multipliers of that change in different environments (Cirera, 2015; Bedoya, 2015). Tintoré (2019) confirms that the prosocial style is a dimension of transformational leadership.

Leaders who are able to promote changes also work towards innovation. After all, innovation is a process associated with change (Raghuvanshi et al., 2019; Schumpeter, 1934).

The ability to innovate, which drives companies to seek organizational excellence and operate in competitive sectors, is associated with people’s characteristics.

The concept of innovation is related to starting something new or significantly improving a product, service, or process (Schumpeter, 1934). Kiss et al. (2022) emphasize that innovation is a consequence of the individual characteristics of leaders and the organization’s performance.

Innovation depends on resources, routines, and management capacity, and while it is increasingly perceived as a way to build and sustain competitive advantage, it does not ensure that advantage separately (Kim et al., 2018; Vasconcelos et al., 2021).

Among the most cited models of innovation capacity in the management area, the present study used the dimensions of innovation capacity according to the model of Liao et al. (2007), based on the perceptions of leaders of family businesses associated with ADAC. According to these authors, few empirical studies have been conducted on innovation dynamic capability, and most focus on discussing technical aspects of innovation.

We chose this theoretical model due to how authors analyzed innovation, addressing technical aspects, previous studies, and its range of applications, including companies from different sectors (Liao et al., 2007). Innovation capacity can relate to the constructs of prosocial leadership, as these authors state that leaders in each department should adopt new approaches to assist employees in completing their tasks, encourage their teams, and provide well-being for them. Thus, we present the first hypothesis of the study:

• H_1a: Prosocial leadership is positively related to innovation capacity.

The increasingly important role of innovation in achieving and keeping high levels of firm competitiveness and performance and the recognized role of strategic leaders in this process (Raffaelli et al., 2019) have fostered studies that associate managers’ characteristics, such as leadership style, with organizational performance.

According to Neely et al. (2005), measuring performance is the process of quantifying actions. Organizations seek to combine tangible and intangible resources and competencies in order to design a strategic vision of leaders, capable of successively improving organizational performance (Martinho et al., 2016). Organizational performance includes better use of assets, a competitive position, and profits (Arora et al., 2016).

There are some reasons for companies to implement performance evaluation systems. They monitor or control activities or areas, establish and ensure a focus for action and leaders’ strategic decisions, and legitimize the firm before the market (Hourneaux et al., 2017). It is up to the leaders to develop indicators for gathering appropriate information on the performance they intend to measure (Chiareto et al., 2018).

In addition to influencing the choice of indicators, leaders are also responsible for influencing people to reach them. When the manager can share leadership, the relationship between leadership and performance becomes stronger and positive over time (D’Innocenzo et al., 2021). It is already known that one of the characteristics of prosocial leadership is developing new leaders (Bedoya, 2015).

The prosocial leader also tends to establish relationships beyond the organization’s walls. Making formal and informal connections with partners outside the organization and local and international organizations provides leaders with access to resources and insights on new technologies, markets, and products, which can be used to achieve results (Kraft & Bausch, 2018). Therefore, we designed the following hypothesis:

• H_1b: Prosocial leadership is positively related to organizational performance.

In addition to leadership, innovation capacity can relate to performance (Vasconcelos et al., 2021). Innovation enables firms to seek new knowledge and create new radical products that can increase their overall performance (Gedajlovic et al., 2012). Innovation generally has uncertain short-term returns but potential long-term benefits, including performance over time (Vagnani, 2015), experimenting with new markets, and developing opportunities (Lubatkin, 2006). Therefore:

• H₂: Innovation capacity relates positively to organizational performance.

Through innovation capacity, leaders are driven to build an extensive external network of contacts to access new sets of knowledge and relevant information, including information on local and foreign competitors (Foss et al., 2013). This is critical for innovation efforts because this information is broad and provides insights to leaders for increasing experimentation, avoiding dependence on standardized procedures, and finding new opportunities (Waren, 2020).

Leaders can also solve problems innovatively to seize opportunities by anticipating and imagining future conditions (Grant & Ashford, 2008), which allows them to assess courses of action and plan and implement potential answers to these scenarios (Kiss et al., 2022). These actions can make leaders adopt a system oriented toward alternative strategies and manage possible difficulties in achieving innovation goals (Kortmann, 2015).

In addition, openness to feedback from acquaintances and strangers contributes to the leader having elements to work towards performance. Feedback from different sources enables relevant insights and discoveries for innovation (Arunachalam et al., 2018), and innovation relates to performance (Kiss et al., 2022). Thus, we developed the following hypothesis:

• H₃: Innovation capacity exerts an indirect effect on the relationship between prosocial leadership and performance.

In order to examine the hypotheses, we present the conceptual model (Figure 1).

Figure 1
Research design

METHODOLOGY

Participating firms

For data collection, the research was classified as a survey, producing quantitative descriptions, and obtaining information from ADAC member companies. ADAC is a state civil association affiliated with ABAD (Brazilian Association of Wholesalers and Distributors), which gathers businessmen established all over the Brazilian territory, individually or collectively, with establishments of “Wholesale Trade” and “Distribution” of industrialized basic consumer goods.

Data collection instrument

The research was cross-sectional since data collection took place over three months, from May to July 2020, using a self-filling questionnaire.

The variables used to measure the prosocial leadership construct are those of Bedoya’s model (2015), adapted to the Brazilian context. The model comprises 35 indicators divided into seven dimensions: prosocial conviction (CPS); consistency of thought, word, and action (PPA); metacognitive capacity (CMC); prosocial commitment, considering individual differences (CDI); communication with prosocial quality (CQP); prioritizing the common good (PBC); and assuming the complexity of human relations (CRH). Quantification was done using a 5-point Likert-type scale, where score 1 represented “never” and score 5 “always.”

The innovation capacity construct was based on the conceptual model and the scale by Liao et al. (2007) for operationalization and measurement of the variables related to innovation capacity, where we made specific adaptions regarding the study object. We used the Likert-type scale of 5 points for the 18 statements distributed between the dimensions “managerial innovation,” “product innovation,” and “process innovation,” with 1 representing “strongly disagree” and 5 “strongly agree.” The model by Liao et al. (2007) was adopted because it confirms that innovation dynamic capability helps companies achieve an advantage compared to competitors in complex and dynamic markets by developing technical and managerial aspects of innovation.

Based on Gupta and Govindarajan’s (1984) model, we collected data on performance, measured subjectively, and compared it to the nearest competitor. In the third block, all data refer to the year 2019. We used a 5-point agreement scale, where 1 represents “totally unsatisfied” and 5 “totally satisfied,” with items addressing the perception of profitability, sales growth, customer attraction, customer retention, monthly income, and overall performance. The scale validated in the Brazilian context (Lizote & Verdinelli, 2013) was a feasible alternative, given the lack of access to reliable secondary data (Perin & Sampaio, 1999) or their absence (Hoque, 2005).

Data collection procedure

The research universe is comprised of professionals with leadership positions in ADAC member companies. The final sample included 144 firms that agreed to participate in the study. There were 795 survey respondents who were contacted at least twice by cell phone, WhatsApp, landline phone, or e-mail. We achieved 63.15% of valid responses, resulting in a sample of 502 respondents.

Data analysis procedure

We used structural equation modeling (SEM) to explain the relationship between the multiple variables. The estimation by partial least squares (Hair et al., 2014) confirmed the hypotheses. We chose this method because the research was exploratory and had many items per latent variable (Chin & Newted, 1999). Specification, estimation, evaluation, and data reporting stages were carried out to adjust the model to our sample (Ringle et al., 2014; Bido, 2018). We made adjustments by first evaluating the measurement model and, finally, the path model (Henseler et al., 2009; Ringle et al., 2014).

RESULTS

The first analysis strategy used with SEM was to apply the covariance-based model. The result showed that it was not possible to validate the proposed theoretical model using instrument dimensions as first-order variables and constructs as second-order variables. Therefore, we developed a second strategy using SEM with partial least squares estimation, which waives factor analysis (Bido & Silva, 2019). Moreover, considering that the prosocial leadership construct is recent and still under development, so we decided to adopt another criterion, with an analysis approach that used the items associated with the constructs and kept the structural model. This procedure had been used before (Santos et al., 2020). The result showed a valid model, where the hypotheses were confirmed.

The first step consisted in eliminating the low factor loadings of construct items; the final model resulted in six items of three dimensions for the prosocial leadership construct, ten items of three dimensions for innovation capacity, and all six items related to organizational performance. Only three items of the innovation capacity construct showed loadings close to 0.70, and all others were equal to or higher.

The result of the suitability test of the reflexive variables and the composite models showed a result of SRMR = 0.0551; this value follows what Henseler et al. (2014) recommended for assessing if the overall model fit is suitable from a saturated structural model that seeks discrepancy between the variance-covariance matrix of the empirical and implicit indicators in the model.

The results of internal consistency reliability and convergent and discriminant validities were achieved (Henseler et al., 2009; Cruz et al., 2015; Bido & Silva, 2019).

The indices regarding construct reliability and convergent validity can be seen in Table 1. We presented three construct reliability indices in response to an ongoing discussion on the validity of Cronbach’s alpha index to conduct such measurements (Benitez et al., 2020). The three indicators used show construct reliability. The assessment of the variance shared in the indicators that explain the underlying latent variable represents the convergent validity criterion (AVE), where values should be > 0.5 to ensure that more than 50% of the indicators’ variance is explained.

Table 1
Reliability of constructs and convergent validity of the model

Construct	ρA	ρc	α	AVE
Performance	0.90	0.92	0.89	0.66
Innovation Capacity	0.91	0.92	0.91	0.55
Prosocial leadership	0.82	0.86	0.81	0.51

_Ac

Two procedures were used to assess discriminant validity. The first consisted of calculating the Heterotrait-Monotrait Ratio of Correlations (HTMT). This indicator determines if two latent variables are statistically different; if the difference is achieved with HTMT values < 0.85, the factors have discriminant validity (Benitez et al., 2020). The values can be seen in the upper right quadrant of Table 2.

Table 2
Model’s discriminant validity

Construct	1	2	3
1 Performance	0.66	0.65*	0.41*
2 Innovation capacity	0.35	0.55	0.45*
3 Prosocial Leadership	0.13	0.15	0.51

Note. Fornell-Larcker criteria. Square correlation and AVE on diagonal.
• ^*
  HTMT.

The second procedure was the Fornell-Larcker (1981) criterion, which states that the values obtained in the squared correlations between the constructs should be lower than those obtained in the convergent validity indicator AVE. In both procedures, we conclude that the final model shows discriminant validity.

An assessment of the emergent variables generated by the items was done through loadings, weights, and multicollinearity indicators. The item’s loading indicates the absolute contribution of the indicator to the construct, and values above 0.7 represent a high contribution (Benitez et al., 2020). The model showed 19 loadings above this value and four with values very close to this threshold. The weights of the indicators show the relative contribution of each to the construct they belong to. It is possible to compare items with each other to identify which one has a higher relative contribution within the emergent variable (Benitez et al., 2020). The variance factor (VIF) that indicates multicollinearity between items showed values < 0.3.

Cross-loadings between the items in the model were also checked (Hair et al., 2014). In the prosocial leadership construct, the internal cross-loadings are higher than 0.68; in the other two constructs, they are less than 0.40. Internal loadings are greater than 0.66 in the innovation capacity constructs, while in the other two constructs, they are less than 0.49. In the performance construct, internal loadings are higher than 0.70, while in the other constructs, they are less than 0.53. Based on these results, we observed that the values on the ascending diagonal exceeded those in the other constructs, which shows the validity of the measurement model.

The correlations between the constructs show that the highest value achieved was between organizational performance and innovation capacity (0.59), followed by the relationship between innovation capacity and prosocial leadership (0.39) and between prosocial leadership and performance (0.36). This lower relationship suggests the existence of a mediating effect since all correlations were significant at p < 0.001.

Once the measurement model analysis was completed, the process of structural model evaluation began. The results were organized by presenting first the direct effects, then the indirect effects, and, finally, the total effects exposed the final model hypotheses.

The overall model fit was estimated at SRMR = 0.05, which provides empirical evidence. Hence, we went on to consider the path coefficients’ estimates and their significance levels. The standardized regression coefficients (β) are interpreted as a change in the standard deviation of the dependent variable if one independent variable is increased by one standard deviation while all other independent variables in the equation remain constant. Thus, they determine if the effect of the independent variables on the dependent variables is statistically significant or not (Benitez et al., 2020). Table 3 shows the results obtained for the direct and indirect effects.

Table 3
Inference of the direct and indirect effects

Direct effects	β	m	se	t-value	p-value
Innovation capacity → Performance	0.53	0.53	0.04	12.88	0.00
Prosocial leadership → Performance	0.15	0.15	0.04	3.49	0.00
Prosocial leadership → Innovation capacity	0.39	0.40	0.04	10.13	0.00
Indirect effect	β	m	se	t-value	p-value
Prosocial leadership → Performance	0.21	0.21	0.02	8.26	0.00

Note. β: original coefficient; m: mean; se: standard error.

The direct relationships proposed in the structural model proved significant. There is a direct effect between innovation capacity and performance (β = 0.53, p < 0.00); there is a direct effect between prosocial leadership and performance (β = 0.15, p < 0.00); and there is a direct effect between prosocial leadership and innovation capacity (β = 0.39, p < 0.00). Also significant, the indicators confirm the existence of the effect (β = 0.21, p < 0.00). This indirect effect points to a potential mediating action in the model.

The final model for evaluating the proposed theoretical framework can be seen in Table 4. Besides observing the path coefficients, we also note the results of the explained variance of the dependent variables (R²) and the effect size (f ²). The indicator of explained variance shows the degree of the strength of an effect - whether direct, indirect, or combined. When a phenomenon is already known to scholars, higher values of R² are expected, although low values of R² may be acceptable when the phenomenon is not well known yet (Benitez et al., 2020).

Table 4
Final model (total effects)

Effect	β	m	se	t-value	R2 adj.	p-value	f 2	Hypothesis
Innovation capacity → Performance	0.53	0.53	0.04	12.88	0.36	0.00	0.37	Confirmed
Prosocial leadership → Performance	0.36	0.36	0.04	8.68		0.00	0.03	Confirmed
Prosocial leadership → Innovation capacity	0.39	0.40	0.04	10.13	0.15	0.00	0.18	Confirmed

²²

The measure of the effect size is independent of the sample size and indicates the practical relevance of an effect, that is, an effect’s strength. As a reference, it is suggested that f ² < 0.02 is considered as the absence of a substantial effect, values between 0.02 ≤ f ² < 0.15 are regarded as a weak effect, between 0.15 ≤ f ² < 0.35 as an average effect, and values of f ² ≥ 0.35 as a large effect (Cohen, 1998).

DISCUSSION

Prosocial leadership is positively related to innovation capacity (H_1a). The original coefficient has a positive direction, the coefficient of determination indicates that the relationship holds for 15.27% of the sample, the relationship is significant (p < 0.00), and the achieved effect size has an average degree (f ² = 0.18). Prosocial leaders have positive intentions, visions, and goals and tend to create value for companies (Liu, 2021). For part of the sample, this value is represented by innovation capacity. Therefore, at ADAC, leading participatory change and creating collective solution models (Escotorín et al., 2014; Tintoré, 2019) for their products or processes (Kahn, 2018; OECD, 2018) have a potential positive impact on innovation capacity.

Prosocial leadership is positively related to organizational performance (H_1b); the original coefficient was positive and significant (β = 0.15, p < 0.00). We found that leaders with prosocial characteristics collaborate to achieve performance in the investigated association, formed by family businesses. Beyond the influence of these leaders in the subjective definition and evaluation of performance indicators (Chiareto et al., 2018), prosociality allows people to perceive that the defined goals are effective and have the potential to improve the present and future of all those involved (Bedoya, 2015). Therefore, providing opportunities to develop prosocial skills to the leaders of family businesses may represent an interesting gain for ADAC in promoting better performance rates.

Innovation capacity is positively related to organizational performance (H₂). The original coefficient was positive and significant (β = 0.53, p < 0.00), the coefficient of determination of the construct “performance” was representative of 36.38% of the sample, and the effect size was large. The more managers develop innovation skills, seeking knowledge and new products or processes (Gedajlovic et al., 2012), the greater the chances of improving the performance of family businesses. Therefore, ADAC can contribute to member companies by providing opportunities to enhance technical knowledge, establishing partnerships with universities and consulting firms, as well as organizing knowledge experiences, such as technical visits.

Innovation capacity exerts an indirect effect on the relationship between prosocial leadership and performance (H₃). The indirect effect showed a positive and significant original coefficient (β = 0.21, p < 0.00), although with a small effect size (f ² = 0.03). The indication of a mediating effect led to designing a direct model between prosocial leadership and performance to assess if inserting the innovation capacity construct would decrease the initial relationship. We found a decrease in relationship strength; however, the initial strength did not show a sufficient degree (> 0.70) to determine the existence of full mediation. However, since the relations obtained in the model were significant, according to Hair et al. (2014) and Bido and Silva (2019), we concluded that there is a partial mediating effect of innovation capacity on the relationship between prosocial leadership and organizational performance.

This result shows that the innovation capacity of family businesses in our sample plays an important role for leaders’ prosociality to generate effective results. Building networks of local and foreign contacts (Foss et al., 2013), being exposed to feedbacks (Arunachalam et al., 2018), or to experiences that bring insights and new opportunities (Waren, 2020), as well as to exercise problem-solving (Grant & Ashford, 2008) and seek alternative strategies for challenges (Kiss et al., 2022; Kortmann, 2015), are suggested practices for developing managers in the associated family businesses; however, they mainly occur if the company has innovative capacity.

Looking at Figure 2, the final model resulted in six items of three dimensions for the prosocial leadership construct, which are communication with prosocial quality, priority for the common good, and assuming the complexity of human relationships.

Figure 2
Graphic representation of the achieved model

As there is a recent movement in the field of studies on prosocial leadership, especially in Brazil, and considering that it is a new concept, we sought confirmation of the hypotheses in the management area, as suggested by Bedoya (2015). The concept of prosociality is widely used in education and psychology, and the Laboratorio de Investigación Prosocial Aplicada (LIPA) creates training processes on prosocial leadership skills for students and teachers (LIPA, 2020).

Bedoya (2015) suggested reapplying the questionnaire in a version for managers and employees, with items to assess the result variables “efficiency” and “job satisfaction” for both leaders and workers and even carrying out a validation of the questionnaire, with a larger population, to confirm the dimensions of prosocial leadership. Maybe the dimensions and variables used by that author do not apply to the business environment but only to the areas of Education or Psychology. Or that the professionals with leadership positions in the companies of our sample did not consider important or predominant the variables disregarded in our results. Moreover, Cirera and Izquierdo (2016) also recommend a better understanding of the prosocial patterns of activities in organizations and suggest further studies.

Regarding the construct for innovation capacity, it resulted in ten items of the three dimensions: managerial innovation, product and service innovation, and process innovation. We believe that, by being wholesalers, distributors, and service providers, ADAC members do not confirm some items of the dimensions, actually because they do not see these statements in the company’s sector of operation. We think that professionals who hold leadership positions in those companies do not have a macro view of the firm, considering only sales, because they are too involved with this area, and most respondents are commercial leaders. Or even because of the cultural characteristics or beliefs associated with the business itself (buying merchandise, selling, and delivering).

A practical example is the statement, “The vast majority of the company’s profit is generated by the new products and services it develops,” or, “The new products or services developed by the company always arouse imitation by its competitors.” ADAC members are in the middle of the business chain, between industry and retail, and do not make new products. Distributors and wholesalers distribute goods from industry to retailers. They purchase large amounts and resell in batches. They do not sell to individuals but to legal entities of any size, from snack cart owners or flower shops to markets and supermarkets.

The challenge is to manage relational capacity, involving the activities of creation, sharing, and commercialization of knowledge and technologies, as well as cooperative relationships (Costa et al., 2013). Firms will increasingly have to check the possibility of cooperatively innovating when defining their business strategies. Currently, the innovation paradigm is not only concentrated on the generation of innovative products and processes, but also on service provision, creation, and renewal of solutions and business models by sharing ideas.

In addition, all six items related to organizational performance were considered - profitability, sales growth, customer attraction, customer retention, monthly income, and overall performance. Participants expressed their opinion that the company they worked for had a better performance than its competitors, considering the year 2019. For Lizote and Verdinelli (2013), performance evaluation aims to analyze a strategy adopted by an organization since it allows for the confrontation of results with established goals. The prevailing characteristics of research participants, primarily salespeople, were especially evident for these items. Professionals involved in the daily attraction of new customers and their retention, seeking to achieve their goals through sales growth, reaching the monthly turnover, and, consequently, business profitability.

Professionals who hold leadership positions in these firms still do not observe or disregard dimensions such as prosocial conviction, metacognitive ability, and prosocial commitment, considering individual differences. We believe that, given the line of business, specifically “wholesalers/distributors,” some statements of the mentioned dimensions were not considered.

Although all of the dimensions of innovation capacity were confirmed, most of the items of the “managerial innovation” dimension were not considered by the participants. We believe these assertions do not make sense for many professionals who are leaders in ADAC member companies. These firms are in the middle of the production chain, only receiving demands from industry and passing them on to their clients, who are traders. Even actions related to training and qualification of their employees have a professional and technical nature, which is required by industries and suggests opportunities for developing behavioral competencies.

CONCLUSIONS

There is a relationship between prosocial leadership, innovation capacity, and performance in ADAC family businesses. All relationships are positive and significant, and innovation capacity has a partial moderating effect on the relationship between prosocial leadership and organizational performance.

Empirically, the results contribute to guide the development practices of the managers of the associated family businesses, especially focused on the improvement of prosociality in leadership and innovation capacity. Theoretically, the study contributes to the study of behavioral phenomena, especially leadership (De Massis et al., 2016) and innovation (Volta et al., 2021), with a focus on searching for better performances (OECD, 2018) but emphasizing common gain (Bedoya, 2015).

Among the study’s limitations, we mention the participation of just one Association and only with family businesses as members. For future studies, we suggest extending it to other types of companies to validate the instrument that the model suggests as suitable for the population we addressed. Another additional research can also be carried out to feel the perception of employees, to identify prosocial behaviors regarding innovation capacity and organizational performance, highlighting demographic data such as age, time of service, gender, position, and education, among other data that help define the characteristics of those surveyed (the group or individual performances).

Prosocial leadership is no longer just a need for company directors but for all employees who make up an organization, especially for those in leadership positions. Particularly in family businesses, people are expected to develop the dimensions of prosociality as a daily practice, which can lead to developing innovation capacity, reflecting on organizational performance.

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Edited by

EDITORIAL BOARD

Editor-in-chief

Fellipe Silva Martins

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Almir Martins Vieira

Edited by

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Irina Migliari (Bardo Editorial)

Publication Dates

• Publication in this collection
  01 July 2024
• Date of issue
  2024

History

• Received
  08 June 2022
• Accepted
  23 May 2023