Management Accounting Systems and Open Innovation

Abstract

Management controls systems have been used in companies for decades in small, medium or big companies. The first control systems were based on the most basic way of keep the accounts of a company. From that moment on, management control systems evolved dramatically from that basic way of accounting until the complex computed systems of now a day. While society evolves, the markets, products and services offered to the end consumers also evolved to fulfill their needs. In the same way as societies evolved to adapt to their current needs, companies also have to adapt their products and be able to offer competitive products with more value added than their competitors. To be able to innovate with new products, technologies and ways of doing things, companies need to do research and innovate. R&D investment can be very high in the case of some companies and the outcome and benefits obtained from the innovation sometimes do not fulfill the expectations of return on investment. Companies sometimes have a problem of innovations that lack value to the company, consequently those innovations become unused. Companies found that one way to overcome that problem was to start selling these innovations to companies that seemed to be interested on them. On the same way, companies started buying innovation that was using the so-called open innovation paradigm. The problem with innovation according to some authors is that if it has too many constraints, then the imagination of researchers can be lost, consequently, there is a huge community of people that claims that innovation cannot be controlled. On the other hand, when innovation is properly controlled, especially in environments like the open innovation paradigm, where different stakeholders come to play, it is extremely important to define who does what. This thesis conducts a review on papers which support the idea on how management control systems can successfully support open innovation. Moreover, the thesis proposes a new framework to map how the different management control systems support different sources of innovation on companies with different business strategies.