Authors: Evangelia Pappa

Title: Implementing strategy in the Greek food manufacturing companies. The managerial tool of internal audit

Abstract

The aim of the research is to estimate the management strategies in the food manufacturing industry. At the centre of sound management is the implementation of internal audit function. Internal audit activity, especially in food companies, adds significant value by providing objective assurance, improving processes, reducing enterprise risks through food safety and quality requirements, recommending waste reduction cost opportunities and preventing food fraud. The conceptual framework of the research is grounded on the Stakeholder theory. The most representative management theory that integrates ‘demand-side’ and ‘supply-side’ of a company. Thus, internal audit, as an effective managerial tool, aims to balance companies’ need for achieving sustainable competitive advantage with fulfilling the interest of suppliers, sub-contractors and consumers. The sample consists of two groups of food companies. The first one consists of those are listed in the Athens Stock Exchange and follow the Corporate Governance rules and the second group includes those are not publicly listed and do not compulsory have internal audit units. Secondary data are retrieved from financial statements and available annual reports covering the pre- and post-Covid-19 period and especially years 2013 to 2021. Using probit regression analysis in GRETL software the estimated results demonstrate direct managerial implications of applying internal audit function within the organizational structure of a food company. Last but not least, future research directions are also discussed.

Keywords: Strategic Management, Firm Strategy, Food Industry, Internal Audit, Greece.

JEL Classifications: M1, L1, L66, M42.