The institutionalization of management control systems in a family firm

Abstract

Purpose

This study aims to understand how family values, family managers and non-family managers influence the institutionalization of management control systems in family firms.

Design/methodology/approach

A case study was conducted in a family business group that underwent a process of adoption and transformation of its management control system.

Findings

The results indicate that several non-family managers, besides the controller, played crucial roles in harmonizing the logic of a generalized practice (quality control management) with the existing rationalities of the family firm. The authors also observed that the ISO 9001/quality control management logic together with the family values of professionalism, meritocracy and an emphasis on the business’s identity rather than the family identity have laid the groundwork for the formalization of the business group’s management controls.

Practical implications

This study shows that quality control management is an accessible source of guidance for the formalization of managerial activities within an organization.

Originality/value

This paper contributes to the literature by clarifying the role performed by non-family managers during the formalization of management control in family firms. It also shows how the family values of professionalism, meritocracy and an emphasis on the business’s identity rather than family identity can influence the way control is exercised within family firms.

Citation

Pagliarussi, M.S. and Leme, M.A. (2020), "The institutionalization of management control systems in a family firm", Qualitative Research in Accounting & Management, Vol. 17 No. 4, pp. 649-673. https://doi.org/10.1108/QRAM-12-2019-0128