The role of accounting for managing innovation processes when relationships matter

Abstract

Purpose

This paper studies how accounting information is used by actors in an innovation process. It investigates how accounting information influences and is influenced by the different actors. The purpose of this paper is to develop a more thorough understanding of the role of accounting in making the choices that form temporary solutions.

Design/methodology/approach

An in-depth case study of the development of a standard software release within the telecom industry.

Findings

This study has shown that accounting was a key ingredient when temporary solutions were formed in the innovation processes. Actors used accounting to stabilize the content of the release in the formation of the gate documents and used accounting to destabilize the content between the temporary solutions. It is difficult to evaluate whether the use of accounting improved or harmed the innovation. Further, the study also revealed that the use of accounting influenced and was influenced by previous and prospective future deals. This put new challenges on the use of accounting because it involved negotiation processes that influenced the accounting figures.

Practical implications

The findings provide insights into the procedures for finding temporary solutions in the innovation process and the role of accounting in these procedures.

Originality/value

This paper contributes by providing a more thorough understanding of the role of accounting regarding the choices that comprise the temporary solutions within the innovation process. In addition, it shows how accounting has a critical role both for settling on and modifying temporary solutions. Hence, the research demonstrated how studies of the role of accounting in innovation processes can contribute to the industrial network approach by giving a more thorough understanding of network dynamics and the process of attaining stability and instability in business networks.

Citation

Lind, J. (2017), "The role of accounting for managing innovation processes when relationships matter", IMP Journal, Vol. 11 No. 1, pp. 7-24. https://doi.org/10.1108/IMP-09-2015-0054