Family-controlled business and shareholder value orientation: customization of management control practices

This paper explores how the notions of shareholder orientation (SHO) shapes management control practices in an Italian family firm. In particu-lar, the paper examines how the influence of the SHO on managerial prac-tices takes the form of a protracted framing process where an emerging SHO-focused frame interacted with the extant frame embedded by socio-emotional wealth (SEW) objectives of the family business. To achieve this purpose, we draw on a case study analysis in order to examine the social processes developed within the firm. Although we consider the case study as a “typical” case of application of a financial control system in a medium-size family control business, findings show that the framing of control prac-tices inspired by the shareholder-focused ideology was reconciled with the extant frame. In the longer term, extant frame continued to dominate within the firm, but shareholder value orientation imbued control practices with a stronger sense of shareholder orientation. These evidences permit to shed light on the process underlying the diffusion of practice grounded on the idea of shareholder wealth maximization.