The Effect Of Management Control On Family Firms

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Recently, family firms have been the talk of various studies across different fields such as accounting, finance, and management. This is most probably due to the fact that family firms account for the majority of business and employment worldwide (Tharawat, 2014). At the same time, most family firms have specific characteristics and practices that studies have yet to dwell on. While these and other considerations have recently led to more research on management accounting and management control in family firms, research on this topic is only recently becoming an independent field of study on developing countries that are actually affected by it more than other countries (Barnato, 2014). Thus, this study aims to shed more light on…show more content…
For the purpose of this study, type of ownership, intergenerational transfers, and percentage of decision-making rights will define family firms.
Family firms face similar challenges that also concern SMEs in general. Because these firms are not only faced with both business and family issues, some challenges affect family firms more specifically while others are exclusive to them. Usually, these challenges stem from the environment in which firms operate. However, this study will focus on challenges related to internal matters to contribute new findings to the ever- growing literature regarding family firms and management control systems.
Studies related to the use of management accounting by family firms normally tackle on their appreciation of management techniques and reliance on management control systems as they mature or include nonfamily members in governing the firm (Filbeck and Lee, 2000; Moores and Mula, 2000). Moreover, Duller et al. (2012) also concluded that the level of family influence in medium-sized firms affects their utilization of management accounting systems. As it has been usual for family firms to ignore management accounting, Hiebl (2013) conducted a study that aims to enumerate the advantages of proactively using the practices and information derived from management accounting. Benefits in applying management accounting of family firms were given from three different perspectives as a conclusion of this
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