The purpose of this work is to determine with a modern statistical approach, which variables can indicate whether an arbitrary enterprise uses strategic management as basic business concept.
“Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly (i.e. regularly) to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.” (Lamb, 1984, ix)
In Austria 70% to 80% of all enterprises can be classified as family firms. In literature the empirically untested hypothesis can be found that family firms tend to have less formalised management accounting systems than non-family enterprises. But it is unknown whether the use of strategic management accounting systems is influenced more by the fact of structure (family or non-family) or by the effect of size.
Therefore the goal is to split up enterprises into two subgroups, namely strategists and non-strategists and to get information on the variables of influence (size, structure, branches, etc.). Two statistical approaches are used: On the one hand a classical cluster analysis is implemented to design two subgroups, and on the other hand a latent class model is built up for this problem. After a short description of the theoretical background both strategies are compared with example data and real data.
Bibliography:
Collins, L.M., Lanza S.T. (2010): Latent Class and Latent Transition Analysis, Wiley and Sons, Hoboken, New Jersey.
Everitt, B. S., Landau, S., Leese, M., Stahl, D. (2001): Cluster Analysis, 4th edition, Arnold, London.
Lamb, R. B. (1984): Competitive strategic management, Prentice-Hall, Englewood Cliffs, New Jersey.
Morris, M. H. et al. (1997): Correlates of Success in Family Business Transitions, Journal of Business Venturing, Vol. 12 (1997), Issue 5, pp. 385–401.
Keywords: Cluster analysis; Latent class analysis; Management accounting
Biography: Christine Duller studied technical mathematics, statistics, actuarial science as well as teacher-training (secondary school teacher in mathematics and history) at the Universities of Linz, Vienna and Salzburg. After two years of freelance activity at a financial consultant she took up employment at the institute for applied statistics (IFAS) at the Johannes Kepler University of Linz. She got her doctoral degree in 1999, since 2005 she is assistant professor at the IFAS. Her research interests are applied statistics and teaching statistics.