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Introduction of accounting practices in small family businesses

Introduction of accounting practices in small family businesses PurposeThis research investigates the introduction of accounting practices into small family businesses, based on socioemotional wealth theory.Design/methodology/approachA multiple-case study was conducted gathering data through interviews and documents (proprietary and public). The sample included six businesses (five Mexican and one American) from different manufacturing and service industries.FindingsIt was found that, although owners control the implementation of accounting practices, others (including family employees, non-family employees and external experts) at times propose practices. The owner’s control can be relaxed, or even eliminated, as the result of proposals from some family employees. However, the degree of influence of family employees is not linked to the closeness of the family relationship, but rather to the owners’ perceived competence of the family employee, indicating an interaction between competence and experience on one side, and family ties on the other.Research limitations/implicationsFirst, the owners chose which documentary data to provide and who was accessible for interviews, potentially biasing findings. Second, the degree of influence family employees can exert might change over time. Third, the study included a limited number of interviews, which can increase the risk of bias. Finally, all firms studied were still managed by the founder. It is possible that small family businesses that have undergone a succession process might incorporate accounting practices differently.Practical implicationsOrganizations promoting the implementation of managerial accounting practices should be aware that, in addition to the owner, some family employees and external experts could influence business practices. Accountants already providing accounting services to small family business are also a good source for proposing managerial accounting practicesOriginality/valueThis study contributes to theory in four ways. First, it expands socioemotional theory to include the perceived competence of the family employee as a potential moderator in the decision-making process. Second, it categorizes the actors who can influence managerial accounting practices in small family businesses. Third, it further refines the role of these actors, based on their degree of influence. Fourth, it proposes a model that describes the introduction of managerial accounting practices in small family business. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Qualitative Research in Accounting & Management Emerald Publishing

Introduction of accounting practices in small family businesses

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1176-6093
DOI
10.1108/QRAM-01-2015-0008
Publisher site
See Article on Publisher Site

Abstract

PurposeThis research investigates the introduction of accounting practices into small family businesses, based on socioemotional wealth theory.Design/methodology/approachA multiple-case study was conducted gathering data through interviews and documents (proprietary and public). The sample included six businesses (five Mexican and one American) from different manufacturing and service industries.FindingsIt was found that, although owners control the implementation of accounting practices, others (including family employees, non-family employees and external experts) at times propose practices. The owner’s control can be relaxed, or even eliminated, as the result of proposals from some family employees. However, the degree of influence of family employees is not linked to the closeness of the family relationship, but rather to the owners’ perceived competence of the family employee, indicating an interaction between competence and experience on one side, and family ties on the other.Research limitations/implicationsFirst, the owners chose which documentary data to provide and who was accessible for interviews, potentially biasing findings. Second, the degree of influence family employees can exert might change over time. Third, the study included a limited number of interviews, which can increase the risk of bias. Finally, all firms studied were still managed by the founder. It is possible that small family businesses that have undergone a succession process might incorporate accounting practices differently.Practical implicationsOrganizations promoting the implementation of managerial accounting practices should be aware that, in addition to the owner, some family employees and external experts could influence business practices. Accountants already providing accounting services to small family business are also a good source for proposing managerial accounting practicesOriginality/valueThis study contributes to theory in four ways. First, it expands socioemotional theory to include the perceived competence of the family employee as a potential moderator in the decision-making process. Second, it categorizes the actors who can influence managerial accounting practices in small family businesses. Third, it further refines the role of these actors, based on their degree of influence. Fourth, it proposes a model that describes the introduction of managerial accounting practices in small family business.

Journal

Qualitative Research in Accounting & ManagementEmerald Publishing

Published: Jun 19, 2017

References