Value-based Management: considerations and implications on the role of social factors in management control practice

Purpose – The purpose of the paper is to investigate the role of Private Equity (PE) ownership and top management team (TMT) characteristics on Value-Based Management (VBM) diffusion. We respond to the call for more diffusion-theoretic work that investigates why management control practices vary across companies, analyzing how ownership and TMT affect the VBM multidimensional construct. Design/methodology/approach – Adopting case study approach, we develop our research analyzing two PE and two Italian-backed firms. Findings – The results of our analysis provide findings on how VBM is adopted by PE-backed firms, as well as valuable insights on the influence of ownership expertise and management background on VBM diffusion among companies. Originality/value – Our research contributes to the diffusion theory, by investigating the role of ownership and TMT characteristics in VBM. Furthermore, to the best of the authors’ knowledge, this is the first study to explore how PE designs VBM in private companies. Practical implications – This study offers new insights on the relevance of the ownership expertise in VBM, and on the way to implement VBM