Cognitive Mechanisms of Strategic Renewal in Transgenerational Family Firms: An Integrative Perspective Through the Lens of Sensemaking Theory

Abstract

The longevity of family firms rests on a dynamic balance between preserving the heritage that constitutes their identity and their capacity to renew their strategic trajectories in response to environmental changes. Generational succession constitutes, in this respect, a key moment in the reconfiguration of this balance, placing successors at the center of competing organizational objectives, through which the boundaries between what should be preserved, what can be transformed, and what must be reinvented are redefined. Although the literature has extensively documented the factors underlying successful succession and the dimensions of strategic renewal, it remains insufficiently attentive to the cognitive processes mobilized by successors. This dimension is nevertheless central, as strategic trajectories cannot be derived mechanically from environmental constraints alone, but also depend on how successors apprehend the tensions facing the firm and shape the strategic responses that follow.

Against this backdrop, this article draws on Weick’s (1995) sensemaking theory as an integrative theoretical framework for conceptualizing the role of cognitive processes in the strategic renewal of transgenerational family firms. This approach makes it possible to view renewal as a dynamic process of sense construction and evolving representations, through which successors mobilize different cognitive mechanisms, including the selection and interpretation of information from their environment, the confrontation of new situations with their existing frames of reference, and the reassessment of their representations, in order to progressively develop an understanding capable of guiding strategic action. Building on this theoretical articulation, this theoretical contribution enriches the literature on strategic renewal in family firms by shifting the focus from the “why” and the “what” to the “how” of its construction. In doing so, the article opens new avenues for future empirical research into the strategic dynamics at work during generational transitions.

Classification JEL: M19

Paper type: Theoretical Research