Why family firms do or do not use controlling tools

You ever wondered whether family firms differ in their use of controlling tools? And how and why? Mateja Andric, one of our excellent bachelor students, found some answers to those questions.

In her work, she surveyed 101 Swiss family SMEs on their firm characteristics, goals, and their use of controlling tools. Using a mediation-analysis, she finds that:

  • Less than 20% of the surveyed firms actually have employees dedicated to planning and controlling.
  • In those cases that have staff dedicated to planning and controlling, on average 1.25 employees work on this topic.
  • Planning and controlling is seen as matter for the boss, as also the graphic shows: In most cases, the CEO or advisory board takes care of planning and controlling tasks.
  • The more the family influences the company (in terms of voting rights and family members in management positions), the less the firm uses strategic planning and controlling because of (a) lack of controlling knowledge and (b) lack of general appreciation of controlling.
  • The more the family influences the company, the less the firm uses operative planning and controlling because of (a) an increased focus on non-financial goals and (b) a focus on informal instead of formal structures.

 

Controlling responsibilities (from Andric, 2015)
Controlling responsibilities (from Andric, 2015)
Model of controlling in family firms (Andric, 2015)
Model of controlling in family firms (Andric, 2015)

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