Accounting for improvement: Action research on local management support

Abstract This paper reports on two longitudinal field studies of attempts to transform front line operational units (cost centers) into centers of trust that actively use operational and accounting information to achieve improvement. In most large organizations, management control tools are remnants from an earlier Taylorist era in which coordination was achieved by central plan. This form of coordination is based on the assumption that all relevant information can be transported to the top of the organization. When this assumption is no longer valid, due to the accumulation of unique operational knowledge at the base of the organization, decentralization of control is undertaken. The differentiation that follows cannot be handled properly be central systems built on standardization of information. The next step is the establishment of a management control dialogue in which the operational units are trusted, responsible partners. In this dialogue, trust serves as a medium that opens the group to assume a learning attitude. This can be achieved through support for local self-management arrangements.