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The Impact of the Management Control System on the Family Business’ Intention to Maintain the Organization for Future Generations

Author

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  • Fábio Frezatti

    (Universidade de São Paulo (FEA/USP), Av. Prof. Luciano Gualberto, Cidade Universitária)

  • Diógenes Souza Bido

    (Universidade Presbiteriana Mackenzie (MACKENZIE))

  • Daniel Magalhães Mucci

    (Universidade de São Paulo (FEA/USP), Av. Prof. Luciano Gualberto, Cidade Universitária)

  • Franciele Beck

    (Universidade Regional de Blumenau (FURB))

  • Ana Paula Capuano Cruz

    (Universidade Federal Do Rio Grande (FURG))

Abstract

The intention to continue as a family business in the long run is part of what defines such firms. However, this should be treated as a challenge in the relationship between the family and organization instead of an assumption. This research captured data through a survey and addresses the association between four dimensions of socioemotional wealth (SEW) and the management control structure, as well as the impact on a fifth dimension of SEW, which is the intention to maintain the organization for future generations. The main research gap addressed is the lack of studies on the impact of management controls on the expectation that the family business will be maintained for future generations. Such controls are a very important mechanism for preserving the accumulated knowledge for these generations. Our conceptual contribution lies in integrating the SEW approach with the management control model, indicating the impact on the intention to continue as a family business. This work highlights the importance of using an interactive control system as a mechanism to strengthen the propensity for the organization to continue being controlled by the family. Interactive systems involve pure knowledge and depend on the use of business diagnostic mechanisms, which could be hindered by the intensity of the family’s presence, control, and influence.

Suggested Citation

  • Fábio Frezatti & Diógenes Souza Bido & Daniel Magalhães Mucci & Franciele Beck & Ana Paula Capuano Cruz, 2023. "The Impact of the Management Control System on the Family Business’ Intention to Maintain the Organization for Future Generations," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 1145-1176, June.
    • Handle: RePEc:spr:jknowl:v:14:y:2023:i:2:d:10.1007_s13132-022-00918-x
    DOI: 10.1007/s13132-022-00918-x
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