The nature and effectiveness of management control in small family businesses/

The link between the setting of goals and the controls necessary to accomplish those goals is especially interesting in the area of small family businesses where multiple, conflicting goals are believed to interfere with business control. The actual nature of goal·setting and control in the small family firm are matters for debate because the area is not well researched.

This study is an interdisciplinary effort, drawing upon existing work in accounting and business management, as well as kinship relations and group process (social psychology). It views the small family business owner-manager as a resource allocator who makes decisions within the field of family and business. Because field theory was developed to explain an individual's behavior in the context of surrounding groups, it is an especially appropriate research tool for investigating the behavior of the owner-manager in the small family business. Existing theories, specifically systems and contingency theories, are analyzed for possible strengths and weaknesses as theoretical frameworks for studying the problems that small family business owners encounter.

Systems theory may be unsatisfactory as a research tool because it assumes that the business and family structures are separate and a control system can be fabricated in which the owner-manager will become a passive participant. This separation may be artificial for some small family business owners who feel a sense of responsibility to their families or to families that. assist the business. Contingency theory may be unsatisfactory as a research tool because it merely explains the obvious: The outcomes of the business are dependent upon activities related to family processes.

The data were gathered by surveying approximately 900 members of the Blacksburg, Christiansburg, Radford, and Roanoke, Virginia, Chambers of Commerce. The evidence suggests that for a majority of firms field- theory is the appropriate orientation because resources are flowing in noneconomic exchanges between the businesses and families that operate them.