Legacy in Family Business: Exploring the “Dark Side” of Legacy Inspired Narratives

Legacy links past, present, and future in family firms, sustaining continuity through founder and family stories. Yet these narratives can also constrain renewal. Prior work largely treats legacy storytelling as constructive or neutral, leaving its dark side underexplored. Drawing on rhetorical history, we theorize legacy-driven storytelling as informal governance and ask when and how it shapes legitimacy, voice, and discretion. We analyze interviews with senior and next generation family members in family firms in Italy and India. Findings indicate that recurring legacy stories can operate as an unwritten rule system that canonizes particular interpretations, privileges authorized interpreters, and disciplines dissent, and attaches disloyalty costs to certain proposals, making some strategic options effectively unthinkable. These effects intensify when authority is concentrated and narrative plurality is low; and weaken when successors introduce counternarratives that reframe fidelity as adaptive renewal. The study offers a mechanism-based account of legacy storytelling’s constraining effects and practical levers to preserve continuity while protecting adaptability.