Family firms, management control and digitalization effect
Abstract
Purpose
This study investigates the association between family firm status and the maturity level of management control systems (MCSs) by considering the moderating effect of process digitalization.
Design/methodology/approach
The authors conducted an empirical analysis on a sample of 106 Italian firms, utilizing both ordinary least squares and ordered logistic regression in this study.
Findings
By resorting to the MCS maturity model proposed by Marx et al. (2012), the empirical findings reveal that family firms do not differ from their nonfamily counterparts regarding MCS maturity. Furthermore, the degree of process digitalization is positively associated with the probability of adopting IT-related technologies in MCSs. Digitalization negatively moderates the relationship between family firm status and MCS maturity, resulting in family firms exhibiting a lower MCS maturity level than their nonfamily counterparts.
Research limitations/implications
Despite similar efforts in the digitalization process, family firms lag behind in the adoption of IT-enabled MCSs, which suggests that reduced agency issues in family firms constrain the MCS maturity level.
Practical implications
This study can assist practitioners in implementing a more mature MCS by considering the interplay between internal digitalization processes and family status of the firm, thereby enhancing the decision-making process.
Originality/value
This study adds novelty to an underexplored area at the intersection of MCSs, family firms and digitalization.
Keywords
Acknowledgements
The authors are grateful to the editor and the anonymous referees for their critical and constructive comments. The authors also benefited from the valuable suggestions and comments received from participants at the Manufacturing and Service Accounting Research (MSAR) Conference (Pisa, Italy, June 29th - July 1st, 2022) and the Società Italiana dei Docenti di Ragioneria e di Economia Aziendale (SIDREA) Conference (Lucca, Italy, October 20-21, 2022).
Since submission of this article, the following author(s) have updated their affiliation(s): Stefano Amato is at the Department of Economics and Management, University of Trento, Trento, Italy.
Citation
Amato, S., Broccardo, L. and Tenucci, A. (2024), "Family firms, management control and digitalization effect", Management Decision, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MD-03-2023-0347
Publisher
:Emerald Publishing Limited
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