Title: Key financial performance indicators in German family firms: findings of an empirical study

Authors: Odile Barbe; Bernd Britzelmaier; Fabian List; Lars Andraschko

Addresses: CEREN EA 7477, Burgundy School of Business, Université Bourgogne Franche-Comté, France ' Business School, Pforzheim University, Tiefenbronner Str. 65, 75175 Pforzheim, Germany ' Ebner Stolz Management Consultants GmbH, Kronenstraße 30, 70174 Stuttgart, Germany ' Business School, Pforzheim University, Tiefenbronner Str. 65, 75175 Pforzheim, Germany

Abstract: Family firms contribute significantly to the German economy since approximately 92% of all companies in Germany are family owned. In contrast to their economic relevance there is only limited research about management control in family firms in Germany. This gap led to the research question: 'Which leading financial performance indicators are used by German family firms operating in the industrial sector and which factors have an influence on this selection?' Based on a literature review a questionnaire was developed and an online based survey was conducted. The results show that the participating companies still prefer traditional performance indicators. The analysis of influencing factors shows that the family influence is an important aspect that affects the selection of the respective financial indicator. Moreover, the age of the family firm is also an important aspect. Two other important factors for the usage of traditional performance indicators instead of modern value-based ones are the easy way to calculate them and that they can easily be understood by employees. Future research could focus on the further development of key financial performance indicators in German family firms and try to compare the results with other countries.

Keywords: family business; small and midsized enterprises; SME; traditional performance indicators; value-based management; performance measurement; KPI; return on sale; return on equity; return on investment.

DOI: 10.1504/IJBG.2020.104963

International Journal of Business and Globalisation, 2020 Vol.24 No.1, pp.105 - 122

Received: 27 Nov 2017
Accepted: 10 Dec 2017

Published online: 10 Feb 2020 *

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