Next-Generation Digital Leadership in Family-Owned SMEs: AnIntegrative Review and Research Agenda

At the nexus of intergenerational renewal and the digital age, family-owned small and medium-sized enterprises (SMEs) are making their mark. One might be inclined to think that “familiness” is an impediment to change, yet the data tells a different story: it is the very attributes of the family firm – in how ownership goals, governance and resource trade-offs are configured – that set the terms for digital transformation (DT). In this study we put forward an integrative and systematic review of the literature from 2016 to 2026 to examine what happens when Generation Z makes its way into the family SME. These digital natives come with value systems of their own. Our synthesis shows that “familiness”, with its emotional ties and long-term view, can be as much a catalyst for going digital as it is a barrier to outside knowledge. And while Gen Z leaders bring the kind of entrepreneurial agility and digital fluency that serves the firm well in the long run, their insistence on a culture that is purpose-driven and tech-enabled tends to rattle the established Socioemotional Wealth (SEW) frameworks. Applying both SEW and Upper Echelons Theory, we find that digital leadership, in the form of transformational styles and innovativeness, is what allows Gen Z potential to be reconciled with the family legacy. There are tensions to be had; the stability afforded by tight family control can see multigenerational management teams stifle the risk necessary for digital projects. By way of a holistic framework, our work sheds light on how these next-generation leaders manage the “willingness/ability” paradox. We end with some managerial advice on building a digital-first culture and a research agenda to fill in the blanks on Gen Z and digital succession.