In the familiness literature it is assumed that family businesses control idiosyncratic resources thanks to the interaction between family and business. These resources are a source of sustainable competitive advantage, as they are difficult to imitate. One such resource is “the family business identity”. At the same time are family business often accused of being stuck in historical path-dependent routes, preventing them from renewal. This tension between path-dependent resources creating family-specific advantages and path-dependent resources as an obstacle to entrepreneurship is in focus in this paper.

Reviewing the history of a Swedish family firm MoDo, We discuss how a family business identity with entrepreneurial elements developed over time. From the case we theorize on the inherent paradox between change and stability embedded in this family business identity and argue that the apparent paradox is resolved when institutions at two analytical levels (the company and the industry) are combined.