Dynamic tensions in the budgetary system of a family business and the duality of structure

Almeida, Dalci Mendes; Gasparetto, Valdirene

doi:10.1590/1808-057x202114110

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Brasil

Revista Contabilidade & Finanças

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Original Article • Rev. contab. finanç. 33 (89) • May-Aug 2022 • https://doi.org/10.1590/1808-057x202114110 copy

Dynamic tensions in the budgetary system of a family business and the duality of structure

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

This article aimed to understand the dynamic tensions in the budgetary system of a family business based on the duality of structure perspective. The research on dynamic tensions in the budgetary system of family businesses is inconclusive. Dynamic tensions are explored in light of traditional theories, and few studies use Simons’ (1995) four levers of control. Moreover, the management control systems (MCSs) of family businesses have particularities that need to be explored. These particularities of family businesses provide different explanations for the dynamic tensions in the budgetary system. Duality of structure enables an understanding of the interaction between the structure and agents’ actions in the production and reproduction of the social order of a family business, within a context of dynamic tensions in the budgetary system. The research revealed the dynamic tensions in the budgetary system of a family business in one budgetary cycle. The findings are relevant since, based on a duality of structure perspective, they present indications that these dynamic tensions are associated with positive forces (belief and interactive control systems) in interaction with negative forces (boundary and diagnostic control systems). This is a single case study in a medium-sized family business engaged in the production and sale of foods. The data were collected through semi-structured interviews, observations, and documents, and analyzed based on discursive textual analysis. The evidence suggests that the social order of the family business is produced and reproduced with the dynamic tensions that occur in the planning and control stages of the budgetary system. The study contributes to the literature on dynamic tensions in the budgetary system of a family business by addressing what they are and how these tensions occur based on the duality of structure perspective. It contributes to practice, as it enables an understanding and better management of these tensions and the achievement of budgetary goals and objectives.

Keywords:
management accounting; dynamic tensions; budgetary system; family business; duality of structure

Categories	Subcategories	Constitutive definition	Authors
Dynamic tensions in the budgetary system (planning and control)	Positive forces (belief and interactive control systems) and negative forces (boundary and diagnostic control systems)	Dilemmas inherent to the organizational environment generated by the combined use of belief and interactive control systems (positive forces) and boundary and diagnostic control systems (negative forces)	Acquaah (2013Acquaah, M. (2013). Management control systems, business strategy and performance: A comparative analysis of family and non-family businesses in a transition economy in sub-Saharan Africa. Journal of Family Business Strategy, 4(2), 131-146. https://doi.org/10.1016/j.jfbs.2013.03.002 https://doi.org/10.1016/j.jfbs.2013.03.0... ), Henri (2006Henri, J. F. (2006). Management control systems and strategy: A resource-based perspective. Accounting, Organizations and Society, 31(6), 529-558. https://doi.org/10.1016/j.aos.2005.07.001 https://doi.org/10.1016/j.aos.2005.07.00... ), Mundy (2010Mundy, J. (2010). Creating dynamic tensions through a balanced use of management control systems. Accounting, Organizations and Society, 35(5), 499-523. https://doi.org/ 10.1016/j.aos.2009.10.005 https://doi.org/ 10.1016/j.aos.2009.10.0... ), Simons (1995Simons, R. (1995). Levers of control: How managers use innovative control systems to drive strategic renewal. Harvard Business School.), Van der Stede (2001Van der Stede, W. A. (2001). Measuring “tight budgetary control”. Management Accounting Research, 12(1), 119-137. https://doi.org/10.1006/mare.2000.0149 https://doi.org/10.1006/mare.2000.0149... ), Widener (2007Widener, S. K. (2007). An empirical analysis of the levers of control framework. Accounting, Organizations and Society, 32(7-8), 757-788. https://doi.org/10.1016/j.aos.2007.01.001 https://doi.org/10.1016/j.aos.2007.01.00... )
Duality of structure	Structure (signification, domination, and legitimization); agency (communication, power, and sanction).	Production and reproduction of the systems through the interaction between structure (rules and resources) and agency (agents’ actions), constituting the duality of structure. Management control systems (MCSs) can be conceived as part of social systems and have three main properties: (i) structure - rules and resources; (ii) modality - means through which the structure produces action; (iii) interaction - actions taken by the members of the organization.	Chung and Parker (2008Chung, L. H., & Parker, L. D. (2008). Integrating hotel environmental strategies with management control: A structuration approach. Business Strategy and the Environment, 17(4), 272-286. https://doi.org/10.1002/bse.546 https://doi.org/10.1002/bse.546... ), Englund and Gerdin (2014Englund, H., & Gerdin, J. (2014). Structuration theory in accounting research: Applications and applicability. Critical Perspectives on Accounting, 25(2), 162-180. https://doi.org/10.1016/j.cpa.2012.10.001 https://doi.org/10.1016/j.cpa.2012.10.00... ), Englund et al. (2011Englund, H., Gerdin, J., & Burns, J. (2011). 25 years of Giddens in accounting research: Achievements, limitations and the future. Accounting, Organizations and Society, 36(8), 494-513. https://doi.org/10.1016/j.aos.2011.10.001 https://doi.org/10.1016/j.aos.2011.10.00... ), Giddens (1976Giddens, A. (1976). New rules of sociological method: A positive critique of interpretative sociologies. Hutchinson & CO., 2013), Gurd (2008Gurd, B. (2008). Structuration and middle-range theory - A case study of accounting during organizational change from different theoretical perspectives. Critical Perspectives on Accounting, 19(4), 523-543. https://doi.org/10.1016/j.cpa.2006.10.001 https://doi.org/10.1016/j.cpa.2006.10.00... ), Kilfoyle and Richardson (2011Kilfoyle, E., & Richardson, A. J. (2011). Agency and structure in budgeting: Thesis, antithesis and synthesis. Critical Perspectives on Accounting, 22(2), 183-199. https://doi.org/10.1016/j.cpa.2010.06.013 https://doi.org/10.1016/j.cpa.2010.06.01... ), Macintosh and Scapens (1991Macintosh, N. B., & Scapens, R. W. (1991). Management accounting and control systems: A structuration theory analysis. Journal of Management Accounting Research, 3, 131-158. , 1990)

Function	Family member	Activity sector	Time in the company (years)	Time in the role (years)	Duration of the interview (minutes)
Controller	Yes	Controllership	7	7	192
Payroll analyst	No	Human resources	29	19	92
Financial manager	No	Finance	16	16	85
Costs analyst	No	Production	1.8 months	1.8 months	92
Production manager	Yes	Production	21	16	66
Sales manager	Yes	Sales	40	18	74
Consultant	No	External consultancy	1.2 months	1.2 months	52
Financial administrative director	Yes	Senior management	41	33	34

Dynamic tensions	Levers of control	Empirical evidence
First: organizational values versus search for opportunities	Belief system and boundary system	Stated mission, vision, and values
		Standard operating procedures
		The controller’s guidance to managers
		Standard budget template
		Cost center structure template
		Limitation of resources
		Management characteristics of the second generation
Second: flexibility versus control	Interactive control system and diagnostic control system	Involvement of various levels of the organization in budgetary planning and control
		Routine discussion between superiors and subordinates about budgetary control
		Flexibility in placing demands and adjusting the goals
		Superior and subordinate being from the family
Third: emotive decisions versus rational decisions	Belief system, boundary system, interactive control system, and diagnostic control system	Second generation: intuitive, emotional, and organic management
Third: emotive decisions versus rational decisions		Third and fourth generations: they seek professionalization, with a greater balance between the four levers
Fourth: company perpetuity versus focus on short-term results	Belief system and diagnostic control system	Stated values
		Time of the company in the market
		Presence of the second, third, and fourth generations in management
		Short-term goals and objectives
Fifth: profit and growth versus risk	Interactive control system and diagnostic control system	Stimulating the search for growth opportunities, investment in new technologies, research and development, and new product lines
		Forecasts through the budgetary system
		Absence of monitoring and risk analysis

Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade, Departamento de Contabilidade e Atuária Av. Prof. Luciano Gualberto, 908 - prédio 3 - sala 118, 05508 - 010 São Paulo - SP - Brasil, Tel.: (55 11) 2648-6320, Tel.: (55 11) 2648-6321, Fax: (55 11) 3813-0120 - São Paulo - SP - Brazil
E-mail: recont@usp.br

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