Strategic Change in Family Firms: The Influence of Familiness on the Strategic Change Process

Abstract

The temporal development of family firms is a key research area owing to the longevity and transgenerational vision of the family. Throughout their development, firms transition through strategic change episodes with potentially significant impact on their performance and survival. In this article, we combine family firm with strategic change research to show how familiness supports or limits mechanisms along the strategic change process. More specifically, we identify three tendencies from specific strengths of family firms that turn against them in radical change contexts. First, familiness creates an overemphasis on the cognition of gradual change triggers, which limits the cognition of radical change triggers. Second, familiness creates a tendency to inappropriately scope and dimension strategic change in the context of radical change triggers in order to protect the value of legacy resources. Finally, familiness supports endurance during strategic change implementation but also creates a tendency of being too slow or stubborn when implementing an insufficient change decision. Falling victim to either of these tendencies may have a negative impact on firm performance and survival.