Using stewardship and agency theory to explore key performance indicators of family businesses
Using stewardship and agency theory to explore key performance indicators of family businesses

Summary/Abstract: Throughout the life cycle in business, family businesses face significant management challenges, one of which is looking for a successor in the next generation or passing on management to managers. If an entrepreneur decides to hire an external manager, he has two options: stewardship or agency theory. The purpose of this article is to evaluate how the use of stewardship theory and agency theory could improve the use of key performance indicators in a family business. The proposals are based on a field survey of 323 business owners conducted in 2020, when the dominance of the stewardship theory was confirmed. Cluster analysis was used to identify factors, with the basic premise being to reinvest profits and identify common characteristics. In addition, a checklist of seven key performance indicators with weighting score lists was provided for evaluation. The most important areas were revealed to be the logistics system (43.89%), current assets related to liquidity (15.33%), and cost management (9.54%).

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