Management accounting in the family business: tipping the balance for survival

Abstract

Purpose

This article presents the family business-specific benefits of taking a proactive approach to using management accounting practices and information.

Design/methodology/approach

The (scarce) literature on management accounting in family businesses is used to discuss the obstacles and benefits of management accounting in family businesses. The benefits are presented using the three-circle model, which displays the family business system consisting of the three subsystems ownership, business and family.

Findings

For family businesses, the main benefits of (increasingly) using management accounting should lie in codifying tacit knowledge, preparing for family and non-family succession, facilitating more fact-based decision-making and alleviating the production of proper information of non-family investors and creditors.

Practical implications

Family business owners, as well as non-family managers in family businesses, might find helpful food for thought regarding how to establish or develop further the management accounting system in a family business.

Originality/value

This article is among the first to discuss the benefits of management accounting for family businesses.

Citation

R.W. Hiebl, M. (2013), "Management accounting in the family business: tipping the balance for survival", Journal of Business Strategy, Vol. 34 No. 6, pp. 19-25. https://doi.org/10.1108/JBS-07-2013-0052