Strategic tensions and adaptive equilibrium in family firms: A middle-range theory of sustainable transformation

Nawar Muneer J. Algthami and Bala Salisu
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Nawar Muneer J. Algthami: Taif University
Bala Salisu: Federal Polytechnic Damaturu

Transformations and Sustainability, 2026, vol. 2, issue 3, 217-246

Abstract: Family firms often display a persistent coexistence of recognizable governance stability and highly variable transformation trajectories, yet existing theories explain this pattern only partially. This paper develops a middle-range theory of sustainable transformation by reconceptualizing family firm transformation as movement across equilibrium configurations shaped by persistent strategic tensions rather than progression through linear stages. The theory centers on three tensions (i.e., legacy–professionalization, tradition–innovation, and control–growth) and specifies a causal logic linking persistent tensions, tension gradients, adaptive equilibrium, and movement trajectories. From this logic, the paper derives four equilibrium configurations and explains repositioning across them through succession, institutional change, innovation pressures, and socioemotional wealth, including nonlinear pathways such as oscillation, regression, and leapfrogging. The paper makes three contributions. First, it develops a strategic tension theory of transformation. Second, it explains movement across configurations through equilibrium dynamics and tension gradients. Third, it reframes sustainability as adaptive equilibrium, defined as maintaining viability through repositioning under persistent strategic pressures. Linking tensions, equilibrium, and movement into a unified explanatory framework, the paper offers a conceptually disciplined alternative to linear models of family firm evolution and establishes an agenda for future empirical research.

Keywords: Family business transformation; Strategic tensions; Adaptive equilibrium; Organizational configurations; Socioemotional wealth (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:dbj:trasus:v:2:y:2026:i:3:p:217-246

DOI: 10.63775/0k3daa23

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