Navigating tradition and modernity: Digital accounting and financial integration in family-owned enterprises in the Arab Gulf

Abstract

This paper explores the use and effect of digital accounting and financial tools within Arab Gulf region family-owned businesses (FOBs), focusing on the contribution of such tools toward financial management transformation. The paper compares the trends of adoption between non-family businesses and FOBs and explores the impact of cultural values, generational forces, and the presence of regional differences on the rate of adoption. A sample of 746 people from the Gulf Cooperation Council countries were studied by Partial Least Squares Structural Equation Modeling (PLS-SEM) and Multi-Group Analysis (MGA). The study demonstrates that utilization of financial tools by FOBs falls short due to conservative financial culture, cybersecurity concerns, and different generations' resistance. However, upon implementation of the tools, they highly enhance financial efficiency, governance, and transparency at times more effectively compared to non-Family Businesses. The study further unearths the pivotal role of the younger generations in driving digital transformation and the cultural constraints underpinning seamless adoption. The study stresses the imperatives of aligning traditional governance structures with modern financial technologies in an attempt to drive long-term sustainability and competitiveness in Gulf FOBs.

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