Management accounting in a learning environment

Abstract

Purpose The purpose of this paper is to report on the findings of a study designed to understand how management accounting changes when an organization evolves in a more network‐oriented direction, informed by an experiential or integrated approach to learning. Design/methodology/approach This paper draws on a longitudinal case study initiated by the findings from a previous action research study at a manufacturing plant, the Volvo Floby factory. Findings By introducing and elaborating on the concept of local management accounting system (LMAS), this paper contributes to the debate about how management accounting reacts to new organizational forms and technologies. Two types of management accounting information are identified: one corresponds to the accountability aspect of accounting – Type 1 information, while Type 2 information refers to problem solving and control. A LMAS is supportive of both local accountability, which draws on valuing skills, and of local problem solving, which relies on decision skills. Research limitations/implications One of the research implications of this study is that a LMAS may function as an important mechanism for innovation by explicitly integrating the holistic and the analytic dimensions of experiential learning. Practical implications The reported case illustrates how management accounting may facilitate process innovation in a practical setting. Originality/value By adopting an experiential learning methodology to develop new knowledge, the production plant studied has succeeded in creating an environment characterized by continuous innovation.

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