Introduction

In times of economic turbulence, an organization’s ability to learn from its environment and adopt innovations enhances its competitive advantage as well as its ability to improve its performance. This book focuses specifically on the contribution learning and innovation in management accounting can make to the success of the organization. However, all management accounting innovations may not be successful. The success of an innovation is contingent upon whether the learning and implementation processes have been properly integrated. When they are not, an innovation that has been successful in one organization may fail in another.

Framework for Studying Management Accounting Innovations

An integrative framework is developed for studying management accounting process innovations. The framework draws on theories from organizational sociology. It focuses on the impact of the innovation on the organization along two important dimensions. First, extent: to what degree does the innovation alter the organization’s management accounting system. Second, scope: what portion of the organization is affected by the change. These dimensions are classified on a continuum ranging from high to low, resulting in a 2x2 contingency framework.

Analysis of Innovation Adoption

The book examines each of the resulting four situations using both Argyris’s typology of single and double loop learning as well as various theories used to explain the adoption or failure to adopt a particular innovation, such as those by Rogers and Sandberg. Recent management accounting innovations, such as Activity Based Costing (ABC) and Balanced Scorecard (BSC), are used to illustrate the concepts and examples drawn from organizational practices.

Examples and Success Factors

ABC and BSC are used as examples of management accounting innovations to demonstrate why they are more successful in some organizations but not in others.