An Examination of Factors Influencing the Adoption of Management Accounting by Family-Owned SME Owner-managers: Focusing on Familiness

Abstract

This paper, using a case study approach, discusses the factors that influence the decision by SME owner-managers to introduce management accounting. Previous studies have examined factors such as firm attributes, owners’ educational background, and the influence of accounting professionals. On the other hand, I focus on the fact that most SMEs are family-owned. More specifically, we support the concept of “familiness,” which considers the values and philosophies shared in the family relations of the owner-managers as a bundle of resources, and argue that it is a major influential factor in their decision to introduce management accounting. In the case of a family-owned SME discussed in this paper, the familiness the owner inherited from his father, who was the previous owner-manager, led to the introduction of cost management after his experience of temporary transfer to another company and encounter with an accounting system.