Exploring the Three Forms of Family Business as Tradition: Received, Enacted, and to Be Transmitted

This study explores the multifaceted role of tradition in family businesses by addressing the often-overlooked tension between tradition and innovation. While innovation is widely recognized as essential for organizational longevity, tradition plays an equally critical role by providing continuity, identity, and unique resources that shape strategic decision-making processes. Drawing on classical theories in social sciences and case vignettes from the Grand Hotel Cravat – a century-old family-owned hotel in Luxembourg – this chapter develops a nuanced conceptualization of tradition as comprising three forms: received, enacted, and to-be-transmitted traditions. These forms are examined as constraints and resources, highlighting how family businesses leverage tradition to foster stability while enabling adaptability in dynamic environments. Challenging the dichotomous view of tradition as merely a resource or constraint for innovation, this study underscores its deeper historical, cultural, and strategic significance, thus revealing how tradition and innovation coexist and mutually enable each other. By advancing a balanced perspective on this duality, this chapter contributes to the strategic management field by emphasizing how family firms navigate the multiple meanings of tradition in shaping their strategic orientation.