Organizational inertia, resource constraints, and innovation resistance in Brazilian family firms

Purpose This study investigates internal organizational barriers to innovation in Brazilian family businesses (FBs), drawing on Rumelt’s (1995) theory of organizational inertia. It examines how family conflict, resource and capability management, and decision-making processes influence perceived innovation capacity in an emerging-economy context. Design/methodology/approach A cross-sectional survey was conducted with 96 employees of Brazilian FBs. Data were analyzed using structural equation modeling and multigroup analysis, complemented by exploratory textual analysis of open-ended responses. The research instrument was based on Rumelt’s inertia framework and adapted to the dynamics of FBs to ensure theoretical and contextual relevance. Findings Results demonstrate that conflicts in resource and capability management constitute the most salient source of perceived inertia, whereas family conflict and decision-making structures do not significantly predict perceived innovation. Multigroup analysis highlights intraorganizational heterogeneity, with perceptual differences across generational stages, family affiliation, and organizational roles. Communication, succession planning, and HR practices emerged as relevant factors associated with organizational justice and innovation readiness. Practical implications Findings emphasize the importance of professionalized HR practices, professionalized governance mechanisms, and external advisory boards in mitigating inertial forces and fostering innovation capacity in FBs. More broadly, the results suggest that overcoming resource and capability barriers can enhance innovation readiness by improving talent allocation, legitimacy of decision-making, and engagement of non-family employees, particularly in emerging-market family firms facing institutional constraints. Social implications By addressing internal barriers, FBs can enhance their resilience, competitiveness, and contribution to sustainable development, aligning with UN Sustainable Development Goal 9. Originality/value This study advances the literature on innovation in family firms by showing how barriers commonly treated as external constraints become consequential through internally mediated mechanisms of organizational inertia. It identifies resource and capability management as the most salient source of perceived innovation inertia and highlights substantial heterogeneity in how innovation barriers are perceived across family-firm subgroups.