Does risk-taking propensity drive mindfulness toward digital transformation in family SMEs? The influence of governance mechanisms

Purpose Family SMEs are increasingly forced to manage the challenges associated with digital transformations. Although it has been recognized that digital transformation is associated with significant risk, the extent to which risk-taking behavior by management in family SMEs stimulates digital transformation is unknown. Therefore, this study uncovers the relationship between management risk-taking propensity and organizational mindfulness toward digital transformation in family SMEs, while also exploring whether two governance mechanisms, the boards of directors and the family council, exert a moderating impact. Design/methodology/approach Drawing on risk behavior theory, the resource-based view and stewardship theory, the theoretical contentions are tested using global survey data comprising a sample of 1,286 family SMEs, analyzed through ordinary least square regressions with moderation and bootstrapping techniques. Findings The findings show that management’s risk-taking propensity is positively associated with organizational mindfulness toward digital transformation. Furthermore, this study sends a clear message to family SMEs without a board of directors, as boards offer valuable resources supporting management risk-taking in ways that strengthen organizational mindfulness toward digital transformation. However, the family council is a governance mechanism that does not deliver the same benefits. Originality/value The study contributes to a nuanced understanding of the role played by different governance mechanisms and provides guidance for family SMEs in dealing with the complexities surrounding risk-taking and digital transformation.