Unpacking Saudi Family Firm Performance Benefits of Entrepreneurial Orientation, Digitalization, Ambidexterity, and Involvements

This study aims to enhance family firm research by introducing contemporary concepts such as entrepreneurial orientation, digitalization, and ambidexterity. It develops hypotheses to examine their impacts on family firm performance, while also exploring the influence of family and generational involvements on the relationship between entrepreneurial orientation and family firm performance. Furthermore, the study investigates the mediating role of innovation ambidexterity in the relationship between entrepreneurial orientation and performance. Using a quantitative approach, this study analyzed data from 256 Saudi family firms through structural equation modeling (SEM). The findings indicate that both firm digitalization and entrepreneurial orientation significantly affect innovation ambidexterity. Additionally, entrepreneurial orientation and innovation ambidexterity have significant impacts on family firm performance. However, firm digitalization does not demonstrate a significant effect on family firm performance. Moreover, innovation ambidexterity mediates the relationship between digitalization (fully) and entrepreneurial orientation (partially) with family firm performance. This research highlights the importance for family firms seeking to combine entrepreneurial orientation with a high degree of digitalization to explore and leverage innovative practices, especially when family involvement holds greater significance than generational involvement. These findings reinforce the notion of revitalizing entrepreneurial orientations by involving new, well-educated generations. The study also calls for further empirical research on the potential of Saudi family firms and their generations to engage in entrepreneurial behaviors, ensuring their sustainability and modernization in the digital era.