Entrepreneurial Innovation: Shifting from Family Tradition

This study focuses on the challenges faced by VANDEPUTTE OLEOCHEMICALS, a Belgium-based company producing linseed oil and plant-based polymers. Lack of experienced employees, market analysis, and financial guarantors hindered the company's growth. Possible solutions include stakeholder engagement, market analysis, and legal policy revision.

Running head: ENTREPRENEURIAL INNOVATION
Entrepreneurial innovation
Name of the student
University name
Author’s note

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Executive summary
The current study focuses on various business aspects which generally influences the
success of a firm. In the current study, we have been focussing upon company
VANDEPUTTE OLEOCHEMICALS which a west Belgium based company concerned with
the production of linseed oil as well as using the linseed for the designing of plant based
polymers. However, the company had started out as a family based enterprise and is operated
by the fourth generation members. However, the company had been facing a number of
organizational disputes which prevented the attaining of sole objectives by the company.
Some of these challenges were lack of sufficient experience employees, lack of market
analyst as well as lack of sufficient financial guarantors. These factors challenged the growth
of the business in the international market. Some of these have been discussed in more details
in the following sections.

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Table of Contents
Executive summary....................................................................................................................2
Description of the situation........................................................................................................2
Issues at stake.............................................................................................................................3
Focusing upon the relevant information....................................................................................4
Possible options to solve the relevant problem..........................................................................5
Conclusion..................................................................................................................................6
References..................................................................................................................................7

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Description of the situation
The current assignment focuses on the issues faced by the fourth generation owners of
the VANDEPUTTE Company. The company is located in a small town in the west of
Belgium and uses linseed as the raw material for the production of a range of products such
as linseed oil, soap and liquid detergents (vandeputte.com, 2018). The company is a world-
class leader on the production of linseed oil is well reputed across Europe. In the year 200,
the company decided to expand its business venture by the creation of a new company
VANDEPUTTE OLEOCHEMICALS (OLEO). The company wanted to produce plant based
polymers from linseed oil. However, the OLEO group of companies suffered from a number
of challenges such as shifting from a low tech industrial business to marketing and
development of innovative and technological products. The company got a kick start when
they were approached by PEUGOT. The company was into manufacturing carpets and was
looking forward to replacing their petrol-based PVC carpets with plant-based carpets made
from linseed seed. The VANDEPUTTE OLEOCHEMICALS were happy at the prospect of
the merger and had put up a new factory for production of the plant based carpets. Tests and
researchers conducted in this regard further supported the findings of the research that linseed
that excellent polymerization properties. However, at a later stage they had found that the
manufacturing equipments were specifically designed to work with PVC polymers.
Therefore, the entire construction design turned out to be faulty and led to a huge failure in
the expansion business (De Massis, Frattini, Kotlar, Petruzzelli & Wright, 2016). However,
one of the major loopholes in the merger contract signed by the company was that no clause
was mentioned in the contract for the provision of compensation in terms of breach of
contract. Therefore, the company lacked the proper legal rules and guidelines which resulted
in the company facing huge number of losses.

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Thesis statement- “Shifting from family tradition to entrepreneurial innovation”
Issues at stake
The VANDEPUTTE OLECHEMICALS had faced massive failure during merger
with the PEUGOT group of companies due to the lack of required business infrastructure.
However, the company believed that it has sufficient brand name and excellent product
quality that could provide the company with a competitive advantage over others in the
similar market domain. However, there were a number of internal loopholes faced by the
company, which hindered the success of the company in the large scale market. The
OLECHEMICALS lacked an adequate number of sales and marketing consultants, which
made interacting and engaging with the potential client bases difficult for the company
(vandeputte.com., 2018). As stated by Christian, one of the board members of the company
the organization was unable to recruit the right kind of employees, who possessed knowledge
regarding both the technological aspects of linseed oil as well as possessed the required
amount of business interpersonal skills such as communication and persuasion abilities.
Additionally, OLEO did not conduct any market research which could result in gap in
understanding and analysis of the current market trends. As explained by Luc , one of the
directors of OLEO there was no need for any marketing analysis as he could simply trust
his instincts for identifying the pattern of customer demands. However, there was a need to
analyse the physical chemical properties of linseed oil through sufficient lab tests, which
could help in determining the extent to which it could replace some of the synthetic polymers
dominating the market (Garcés-Galdeano, Larraza-Kintana, García-Olaverri & Makri, 2016).
Focusing upon the relevant information
Thus, focusing upon the current situation of the organization a number of issues were
found such as recruitment challenges faced by the company. As stated by one of the directors

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of the company, they were unable to recruit employees with the right qualifications. The lack
of skills could be coped up by providing sufficient training to the employees (Leitch &
Harrison, 2016). Additionally, organizational dispute further affects the decision making a
process of the business venture (Burton, Sørensen & Dobrev, 2016). Christian was of the
opinion that conducting a market analysis could help the company in understanding the
changing dynamics. This view was however contradicted by Luc who thought that recruiting
an experienced marketing lead could help in coping up with the gaps within the
organizational process. Additionally, in order to cope up with the losses suffered due to the
merger with the PEUGOT group the company needed additional support from partnering
agencies. However, the organization was also dropped by some of its trusted financial
partners. In order to pay the salaries, loans, repayments the OLEO group needed an annual
production of 9,000 tonnes (vandeputte.com., 2018). However, the company in its initial
stage hardly managed to produce 4,000 tonnes which were not sufficient to meet the demand
of the growing demand and supply chain (De Massis, Frattini, Pizzurno & Cassia, 2015).
Possible options to solve the relevant problem
In this respect, a number of options could be used to solve the problems faced by the
OLEO group of companies. Some of these were attaining sufficient stakeholders for the
company. The company was also dropped down from the list of priority based client by some
of the banks and financial institutions, which had been sponsoring the company ever since
inception owing to the lack of financial guarantors. Therefore, integration with some of the
business partners could help the organization in getting sufficient profits (Ingram, Lewis,
Barton & Gartner, 2016). However as argued by Kickul & Lyons (2016), putting excess
power in the hands of the partnering agencies can result in power disputes.

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Additionally, the organization also suffered from hindrances offered by a number of
marketing channels due to the some of the erroneous reports generated during the research
trial and error methods regarding the ill effects of linseed oil. In this respect, the company
could conduct a detailed research and the papers should be published to the concerned
agencies. However, the lack of an effective legal practising guideline can also result in the
sufficient losses being incurred in the part of the company (Jaskiewicz, Combs & Rau, 2015).
Additionally, the company receives 80% of its raw materials from Canada and the rest from
other countries such as Ukraine, UK and Germany. However, instated of depending upon the
additional number of distribution channels the company can manufacture its products near to
its raw materials source, which will help the company in cutting the additional costs
generated (Kammerlander, Dessi, Bird, Floris & Murru, 2015). The company also needs to
revise its legal policies which can help the company in avoiding any future breach of action.
Some of the criteria which could be used for choosing the future options are conducting a
marketing analysis which could help in predicting the future returns as well as ensure that a
promising growth of the company. Additionally, choosing such an option would also help in
understanding the market risks.
Conclusion
The current assignment focuses upon the issues faced by a company owing to its
transformation from a family based enterprise to an organization of international stature.
However, the company faces a number of issues due to lack of experienced staffs who could
engage potential clients.
Additionally, the company was also suffering from the lack of sufficient financers
which could help the company recover the additional costs. In this respect, the company was

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also dropped down by some of its potential investors. In this respect, engaging with
additional stakeholders can also help in gaining sufficient guarantors for the business.

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References
Burton, M. D., Sørensen, J. B., & Dobrev, S. D. (2016). A careers perspective on
entrepreneurship. Entrepreneurship Theory and Practice, 40(2), 237-247.
De Massis, A., Frattini, F., Kotlar, J., Petruzzelli, A. M., & Wright, M. (2016). Innovation
through tradition: lessons from innovative family businesses and directions for future
research. The Academy of Management Perspectives, 30(1), 93-116.
De Massis, A., Frattini, F., Pizzurno, E., & Cassia, L. (2015). Product innovation in family
versus nonfamily firms: An exploratory analysis. Journal of Small Business
Management, 53(1), 1-36.
Garcés-Galdeano, L., Larraza-Kintana, M., García-Olaverri, C., & Makri, M. (2016).
Entrepreneurial orientation in family firms: the moderating role of technological
intensity and performance. International Entrepreneurship and Management
Journal, 12(1), 27-45.
Ingram, A. E., Lewis, M. W., Barton, S., & Gartner, W. B. (2016). Paradoxes and innovation
in family firms: The role of paradoxical thinking. Entrepreneurship Theory and
Practice, 40(1), 161-176.
Jaskiewicz, P., Combs, J. G., & Rau, S. B. (2015). Entrepreneurial legacy: Toward a theory
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Business Venturing, 30(1), 29-49.
Kammerlander, N., Dessi, C., Bird, M., Floris, M., & Murru, A. (2015). The impact of shared
stories on family firm innovation: A multicase study. Family Business Review, 28(4),
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Kickul, J., & Lyons, T. S. (2016). Understanding social entrepreneurship: The relentless
pursuit of mission in an ever changing world. Routledge.
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vandeputte.com. (2018). vandeputte.com. Retrieved 11 February 2018,
http://www.vandeputte.com/en/oleochemicals-linseed.htm