Paradoxes and Innovation in Family Firms: The Role of Paradoxical Thinking

Scholars stress that family firms are inherently paradoxical, and that tensions, such as tradition versus change, family liquidity versus business growth, and founder control versus successor autonomy, can both inhibit and foster innovation. Further, theorists propose that firms led by paradoxical thinkers are more likely to manage these tensions and fuel innovative behavior. Leveraging family business and organizational paradox literatures, this multi-stage exploratory study develops measures of paradoxical tensions and paradoxical thinking in family firms, and tests these propositions. Findings indicate that paradoxical tensions may stymie innovative behavior, but that leaders' paradoxical thinking is positively related to innovative behavior.