Without friction, no shine: how dynamic managerial capabilities combine for family firms’ digital transformation

Abstract

Research shows that digital transformation (DT) of small and medium-sized family firms is a major challenge, where family dynamics introduce idiosyncrasies in how managers sense, seize, and orchestrate DT. In this study, we focus on those dynamic managerial capabilities that are closely related to individual cognitive traits - sensing and seizing – to understand how they operate at the individual level and how they interact at the team level in such a transformation process. We draw on an in-depth case study of the digital transformation of a family business, the largest independent fashion retailer in the Netherlands. Our microfoundational lens sheds light on the mechanisms through which familiness underpins dynamic managerial capabilities for DT. Specifically, we identify purposeful friction as an interpersonal capability that modifies individual managers’ sensing and contributes to the bridge between sensing and seizing. To complete the model, we identify collaborative value-based decision making and experimental implementation as team-level capabilities that underpin DT seizing. Our theoretical model contributes to the current literature by unraveling the microfoundations of how team-level interaction enhances individual managers’ sensing and seizing capabilities for digital transformation in the context of family firms.