Paradoxical Tensions in Chinese Family Firms: The Role of Institutional Context

This paper explores how latent paradoxical tensions become salient in Chinese family firms. Through the narrative analysis of four Chinese family firms’ leaders, we found that the liquidity-growth paradox was latent until the increasing family involvement rendered it salient; however, such organizational condition was only impactful when institutional changes occurred. The latent industry-family reputation paradox was rendered salient through leaders’ sense-making of how to respond to ambiguous formal institutions. Our findings contribute to the theoretical and empirical development of the paradox perspective with a focus on family businesses by revealing the latency and salience of paradoxical tensions in organizations through multi-level interactions of environmental conditions at institutional, organizational and individual levels.