Managing the Liability of Legacy in Family Firms

Our study examines legacy liability in family firms. Using longitudinal data from seven case studies, we identify situations where legacies shift from being perceived positively to negatively. We uncover the mechanisms through which family firm decision-makers negotiate legacy liability, such as initiating dialogue, convening a “war cabinet,” and introducing new voices; and mechanisms used to respond to perceived negative legacies, including embracing, de-emphasizing, and partitioning. Our study offers valuable insights for family firm researchers to better understand the dynamic nature of legacy, and provides practical guidance for family firms in managing their inherited—and at times constraining—legacies.