Digitalization of small and medium-sized family enterprises: The key role of succession

Abstract

Family small and medium-sized enterprises (SMEs) represent a peculiar context for investigating digitalization since the vital link between the family and the business turns into distinctive approaches to innovation relative to nonfamily firms. Although extant literature acknowledges that all firms are increasingly required to respond to the challenges of the digital economy, the current knowledge about how family SMEs pursue digital innovation and how it impacts the organization is still limited. Similarly, understanding if and how succession plays a role in innovation and digital change development in family firms is a topic that needs further investigation. A qualitative study of six Italian family SMEs currently undergoing their digitalization journeys detected three types of digitalization (molt, turmoil, and clear-cut) that are deeply connected with different succession experiences, different levels of business family support, and various levels of strategic planning. The findings highlight the central role of succession and intergenerational dialogue in fostering digitalization in family firms. The paper contributes to the general literature about digital innovation in family SMEs and mainly speaks to that literature focused on the relationship between technological innovation and succession, offering new and deeper insights into the relationship between the family, the person who is in charge of managing digitalization in these firms and the whole digitalization process. Contributions to practice are also outlined: the three types of digitalization represent a valuable tool to sustain consultants and family firms’ owners in digitalizing these organizations.