Purpose - This paper presents findings from an SME case study situated in the computer games industry, the youngest and fastest growing of the new digital industries. The study examines changing people management practices as the case company undergoes industry-typical strategic change to embark on explorative innovation and argues that maintaining an organisational context conducive to innovatin over time risks turning into a contest between management and employees as both parties interpret organisational pressures from their different perspectives.

Design/methodology/approach - A single case study design is used as the appropriate methdology to generate indepth qualitative data from multiple organisational member perspectives.

Findings - Findings indicate that management and worker perspectives on innovation as strategic change and the central people management practices required to support this differ significantly, resulting in tensions and organisational strain. As the company moves to the production of IP work, the need for more effective duality management arises.

Research limitations/implications - The single case study has limitations in terms of generalisability. Multiple data collection and triangulation were used to migitate against the limitations.

Practical implications - The study highlights the importance of building up change management capability in the small businesses typical for this sector, an as yet neglected focus in the academic literature concerned with the industry and in support initatives.

Originality/value - Few qualitative studies have examined people management practices in the industry in the context of organisational/strategic change, and few have adopted a process perspective.