Investigating the Effect of Strategic Improvement on Family Business Performance: The Mediating Role of Strategic Learning and the Moderating Role of Knowledge Sharing

Aim and Introduction: Strategic studies are shifting from a focus on external factors to an emphasis on internal resources within the business. This change reflects the intellectual contributions of prominent figures in strategic management, moving towards a more balanced approach. The midpoint of the pendulum represents the balance between focusing on external factors and internal considerations simultaneously. It involves making strategic decisions while keeping both aspects in mind. However, recent studies have challenged the traditional concept of strategy, which often focuses solely on future projections. These studies advocate for a more balanced approach that also considers the historical context of the industry and strategies rooted in history and tradition. The fundamental issue is that strategy often focuses solely on the future, neglecting the historical context and past business strategies. This oversight has significantly impacted business performance. The aforementioned issue has deprived business managers of a valuable resource known as business history, which has recently garnered the attention of strategy scholars. This highlights the importance of addressing past strategies, which are shaped by managers' evolving thought processes. These strategies can be effectively developed by focusing on the key success factors over time, ultimately enhancing the performance of businesses within the industry. In other words, the key factors for long-term success in an industry are identified, and the primary resources of the business are allocated toward achieving those objectives.
Considering the above, it is evident that an examination of Iranian studies in the field of family businesses, particularly within the carpet industry, reveals a significant lack of research regarding the strategies employed by these businesses. Consequently, the need to focus on these enterprises has become more critical than ever. It is important to recognize that the audience for this research includes business managers, policymakers, and strategists involved in the management of family businesses within the hand-woven carpet industry. Given this context, the primary question of this research is whether improvements in strategy have an impact on the performance of Iranian family businesses in the hand-woven carpet sector.
Methodology: Considering the focus of the current research, this study adopts a meta-positivist paradigm and employs a quantitative, inductive approach. Standard measures from previous studies were employed to assess the variables. These measures were adapted for the Iranian organizational context using the translation-back-translation method. The face and content validity of the final questionnaire were confirmed by soliciting the opinions of management experts. The validity of the questionnaire constructs, as well as the significance of the factor loadings for the items associated with these constructs, were assessed and validated using confirmatory factor analysis in Amos software. The sample size was calculated to be 385 using the Cochran formula for an infinite population; however, 391 questionnaires were confirmed and analyzed. In order to analyze the data, Pearson correlation analysis was conducted to calculate zero-order correlation coefficients, and the structural equation modeling method was employed to assess the fit of the structural equation model to the collected data.
Finding: Considering the focus of the current research, this study adopts a meta-positivist paradigm and employs a quantitative, inductive approach. Standard measures from previous studies were employed to assess the variables. These measures were adapted for the Iranian organizational context using the translation-back-translation method. The face and content validity of the final questionnaire were confirmed by soliciting the opinions of management experts. The validity of the questionnaire constructs, as well as the significance of the factor loadings for the items associated with these constructs, were assessed and validated using confirmatory factor analysis in Amos software. The sample size was calculated to be 385 using the Cochran formula for an infinite population; however, 391 questionnaires were confirmed and analyzed. In order to analyze the data, Pearson correlation analysis was conducted to calculate zero-order correlation coefficients, and the structural equation modeling method was employed to assess the fit of the structural equation model to the collected data.
Conclusion: The first hypothesis of the study examined the effect of strategic improvements on the performance of family businesses operating in the Iranian hand-woven carpet industry, and it was confirmed. The results indicated that focusing on the key success factors that are evolving within the industry can significantly impact the performance of family businesses. Confirmation of the second hypothesis indicated that strategy improvement significantly impacts the strategic learning of family businesses. The results indicate that family businesses, when considering their historical context, have developed strategic learning by responding to environmental demands and leveraging their organizational resources. The third hypothesis of the present study focused on the impact of strategic learning on the performance of family businesses, and this hypothesis was confirmed. Based on the results obtained, it is important to recognize that family businesses reach critical strategic milestones that significantly influence their industry over time, aided by the experience they accumulate. Furthermore, learning serves as the primary lever that enables these businesses to achieve and sustain optimal performance while distinguishing the organization from potential pitfalls.
The fourth hypothesis indicated that strategic learning mediates the relationship between strategy improvement and performance, a finding that was confirmed. According to the results of testing this hypothesis, it is concluded that family businesses develop unique strategies over their lifetimes, which serve as the fundamental principles for achieving key success factors within their industry. The fifth hypothesis of the research examined the moderating role of knowledge sharing in the causal relationship between strategy improvement and the performance of family businesses. The final, sixth hypothesis emphasized the moderating role of knowledge sharing in the relationship between strategic improvement and strategic learning within family businesses, which was confirmed. In other words, to activate the role of knowledge, it is essential for managers in family businesses to engage in knowledge sharing through interaction and strategic learning. The improvements in strategy that these managers implement by sharing the knowledge gained from their experiences will significantly enhance strategic learning. This research contributes to the literature in the fields of business and strategy in two key ways. First, it demonstrates that business managers can evaluate the balance between change and continuity in family business strategies. Second, family businesses can enhance their performance by taking into account environmental changes and aligning their internal resources with external success factors.