Challenges of Applying Artificial Intelligence in Family Business

Artificial intelligence (AI) can be best described as the ability of a computer or computer controlled robot to simulate the functioning of the human brain and human intelligence in order to perform routine tasks, including processes such as learning, reasoning, decision making, problem solving, and perceiving the best possible solutions. AI has found its application in a large number of areas so far, so family entrepreneurship is no an exception. However, although modern AI tools offer family businesses significant potential for improving their business operations, decision- making, fostering innovation, increasing business eficiency and engaging consumers, their implementation in these firms is still limited due to high implementation costs, lack of IT talent, possible biases, problems with transparency and data privacy, and resistance to change shown by family business owners. This article deals with the identification of some potentially significant areas where AI has already found its practical application in family enterprises, as well as with the limitations and obstacles they face with in their daily practice. Family companies are usually characterized by their conservatism, established tradition, fear of the unknown, cautious approach to risk, lack of adequate knowledge and IT resources, as well as by nurturing tradition, family values and culture, all of which make them less ready to tackle inevitable technological changes. Nevertheless, the article concludes that modern family firms should perceive advanced technologies as their key strategic assets in order to encourage their further growth and development, while any delay in implementing new technological solutions can increase the technological gap among them and their competitors.