Abstract

Since the reform and opening up, China’s family enterprises have developed rapidly and some family enterprises have entered the period of intergenerational inheritance which may experience some organizational turbulence and face great uncertainty. Meanwhile, more and more CEOs of Chinese enterprises realize that innovation has become the driving force for the transformation and upgrading of SMEs. So, during the intergenerational inheritance and afterwards, whether CEOs of family enterprises make the same decision on innovation strategy as CEOs of non-family enterprises? Whether the second generation CEOs of family enterprises make the same decision on innovation strategy as the founders of family enterprises? It’s worthy of examining the role of family ownership and the regulatory focus of CEOs. Using the multi case study and grounded theory, this study selects 7 Chinese SEMs to explore the relationship between CEOs and innovation strategies of family and non-family SMEs. Through the interviews, field observation, and the archived information, a large number of data has been collected, which provided a multiple evidence basis for the formation of concepts and the development of theories. We find that different ownership influences the decision-making on innovation, and the different regulatory focus of CEOs mediates the relationship between CEOs’ social identity and their preference on innovation strategy.