Dynamic capabilities at the digital-succession nexus : how family firms navigate dual transformation through three developmental pathways

Mihotić, Lucija (author), Pfajfar, Gregor (author)

While digital transformation is crucial for the sustainability of family businesses, existing frameworks inade- quately explain how digitalization capabilities develop during succession, particularly in emerging markets. Through a qualitative comparative case study of six Croatian family firms undergoing simultaneous first-time succession and digitalization, this study examines how founder engagement influences the development of dy- namic capabilities (DC). Drawing on DCs framework, this study identified three patterns: (1) actively supportive founders enable comprehensive capabilities (sensing, seizing, and transforming) through structured efforts, facilitating successful transitions (2) traditional control with selective permission (i.e., passive support by founders); yields moderate capabilities for partial adaptation; and (3) founders' resistance, despite successors’ enthusiasm, limits firms to basic sensing. These manifest through three pathways: technological adaptation fosters integrative capabilities, external knowledge integration builds absorptive capacity, and internal devel- opment enhances organizational learning, each shaped by founder-successor dynamics. This research advances theory by revealing how family relationships can override market forces in capability building, thereby chal- lenging assumptions about the inevitability of digital technology. Findings emphasize that success requires aligned intergenerational support, with founder attitudes as critical gatekeepers. The Croatian con- text—characterized by institutional voids and cultural tensions—makes these dynamics particularly visible for emerging economies.

• Language: English
• Keywords: family business, digitalization, artificial intelligence, resilience, digital transformation, succession, dynamic capabilities, digital intrapreneurship, organizational resilience, turbulent environments, emerging economies, Croatia
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: EF - School of Economics and Business
• Publication status: Published
• Publication version: Author Accepted Manuscript
• Year: 2026
• Number of pages: 16 str.
• Numbering: Vol. 152, article no. ǂ103484
• PID: 20.500.12556/RUL-181649
• UDC: 005.3
• ISSN on article: 0166-4972
• DOI: 10.1016/j.technovation.2026.103484
• COBISS.SI-ID: 266511619
• Publication date in RUL: 10.04.2026

Record is a part of a journal

• Title: Technovation
• Shortened title: Technovation
• Publisher: Elsevier
• ISSN: 0166-4972
• COBISS.SI-ID: 29223425

Licences

• License: CC BY-NC-ND 4.0, Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
• Link: http://creativecommons.org/licenses/by-nc-nd/4.0/
• Description: The most restrictive Creative Commons license. This only allows people to download and share the work for no commercial gain and for no other purposes.

Secondary language

• Language: Slovenian
• Keywords: družinsko podjetje, digitalizacija, umetna inteligenca, odpornost

Projects

• Funder: ARIS - Slovenian Research and Innovation Agency
• Project number: P5-0177
• Name: Slovenija in njeni akterji v mednarodnih odnosih in evropskih integracijah