Bridging Generations: How Conflict Management, Shared Goals, and Trust Drive Family Firm Innovation

What is it about?

This conceptual study explores how intergenerational strategy involvement—that is, when multiple generations of family members jointly engage in strategic decision-making—shapes family firms’ pursuit of innovation. While having multiple generations involved in strategy brings diverse perspectives and experiences, it also introduces potential friction and differences in priorities. The paper argues that whether such involvement enhances or hinders innovation depends heavily on how families manage conflict and build trust and goal alignment across generations. Drawing on family business and social capital research, the article proposes that cooperative conflict management—where family members handle disagreements constructively—strengthens the positive link between intergenerational involvement and innovation. In contrast, competitive conflict management marked by dominance and power struggles weakens it. The model also highlights the dual role of social capital: shared goals and trust enhance collaboration and innovation, but excessive cohesion may suppress debate and limit creative tension. By integrating conflict management and social capital into a single framework, the paper highlights that innovation in family firms is not only about generational diversity but also about how families communicate, negotiate, and collaborate. The argument is grounded in Mexican family firms, where collectivist values and family cohesion amplify both the promise and the challenge of multigenerational innovation.

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Photo by John on Unsplash

Photo by John on Unsplash

Why is it important?

This study integrates two underexplored aspects—conflict management and social capital—to explain when intergenerational involvement drives innovation in family firms. Moving beyond seeing generational diversity as purely beneficial or harmful, the model argues that outcomes hinge on how families manage disagreements and use relational resources like shared goals and honesty. By linking cooperative and competitive conflict styles with goal congruence and trust, it highlights relational balance as the key to transforming generational diversity into creativity rather than stagnation. This study is timely in examining how family firms adapt to rapid technological and market changes while maintaining continuity across generations. Set in the Mexican context—where familiness, loyalty, and collectivist values shape collaboration—the model broadens the global relevance of family business theory. As succession pressures and innovation demands converge, it offers a framework showing how constructive conflict management and shared relational foundations can turn intergenerational tension into creative energy, positioning innovation as a product of collaboration across generations.