Embracing Paradox in the Age of Generative AI: The Role of Emotional Attachment in Driving Innovation Performance

Abstract

This study examines the cognitive, strategic, and emotional factors that influence the adoption of Generative Artificial Intelligence (GenAI) and how it affects innovation performance in Family Business SMEs in Pakistan. The study uses Paradox Theory as the primary theoretical perspective and Socio-Emotional Wealth (SEW) Theory as the secondary perspective to explore the moderating effect of emotional attachment on the relationship between paradox mindset and GenAI adoption intensity. The study had a quantitative, cross-sectional survey design and the primary data were gathered from family-owned SMEs' executives, owners, and representatives using an online and face-to-face questionnaire. The study uses Smart PLS software to test the hypothesised relationship using structural equation modelling. The results showed a significant relationship between paradox mindset and innovation performance, and that GenAI also significantly mediates the relationship between paradox mindset and innovation performance. Meanwhile, emotional attachment also showed a strong effect as a moderator. So, the outcomes can be used as recommendations to improve innovation performance in culturally rich and resource-limited contexts, which will lead to sustainable competitive advantage and long-term growth of the organization.