Surviving disruptive change: The role of history in aligning strategy and identity in family businesses

Abstract

Surviving a constantly changing environment is one of the challenges for the longevity of family firms. We assume that navigating through disruptive environments is inextricably linked to strategy and/or identity adaptation, modification and change. From a strategy-identity nexus point of view, these changes bear the risk of discontinuous shifts in strategy and identity. In this paper, we offer three types of strategy-identity inconsistencies and assume an alignment in strategy and identity as key for business survival. To uncover how family businesses bring order into their strategy and identity orientations, we draw upon the literature on the use of organizational history. We conducted a qualitative in-depth and longitudinal case study of a 100-year old German family business, which managed to survive major changes in the clothing industry. By exploring distinctive strategy-identity inconsistencies, we found three modes of the use of history (‘adjusting history’, ‘inventing history and historical forgetting’ and ‘invoking history’) whereby the family business drew upon historical accounts to ensure that identity was continuously enacted and expressed via strategy, and inferred, modified and affirmed from strategy. Our insights have significant implications not only for understanding the strategy-identity nexus in family businesses but also for research on the use of history.