Teemu Laine, Jari Paranko and Petri Suomala
The purpose of this paper is twofold. First, it aims at defining the concept of the downstream shift in the context of the machinery manufacturers. The second aim of the paper is…
Abstract
Purpose
The purpose of this paper is twofold. First, it aims at defining the concept of the downstream shift in the context of the machinery manufacturers. The second aim of the paper is to analyze the potentially enabling role of remote technologies in that shift.
Design/methodology/approach
Besides examining the development of the supply chains based on the literature and a case company, the paper refers to the case of the remote technologies developed and used by the case company for the years of 2003‐2008.
Findings
The key finding of this paper is that no consensus exists on the favourable scope and content of the downstream shift aimed at by the machinery manufacturers. Respectively, the potential role of the technologies in the shift can also vary on a case‐by‐case basis. Based on the case study, instead of new sources of service revenues, the information processed with the help of the remote technologies may provide an opportunity for the machinery manufacturer to learn from its customers, thus offering a sound basis for various R&D and sales and marketing activities.
Research limitations/implications
This paper can be considered as a pre‐study towards understanding about the true drivers of the downstream shift and their success factors. Technologies constitute one enabler in the shift, and its potential roles, together with the context specific factors, require further attention.
Practical implications
The paper offers valuable insights into the development of the supply chains. Moreover, it takes a critical perspective on the positive expectations connected with the downstream shifts by the machinery manufacturers.
Originality/value
The longitudinal perspective to the case environment provides a sound basis for analyzing the development of the supply chain at hand.
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Teemu Laine, Jari Paranko and Petri Suomala
The purpose of this paper is to analyse the potentially supportive roles of management accounting (MA) in the servitisation of manufacturers.
Abstract
Purpose
The purpose of this paper is to analyse the potentially supportive roles of management accounting (MA) in the servitisation of manufacturers.
Design/methodology/approach
The paper is a conceptual analysis supported by empirical examples.
Findings
The potentially supporting roles of MA are here connected to the process of justifying, defining, and controlling servitisation. The potential units of analysis for MA in such a process are explored by going through the different viewpoints regarding service. The actual roles of MA within the process are examined both conceptually and in light of empirical experience. The paper acknowledges MA as a social phenomenon, taking multiple roles in supporting decision making. Essentially, MA can be used as a source of restricting and enabling, and the roles of MA may range from that of “answer machine” to the subjective and interactive use of MA information.
Research limitations/implications
The paper represents a starting point for studying the variety of roles of MA in the servitisation process and it also outlines an agenda for further research.
Practical implications
The paper examines a variety of roles of MA in servitisation. The discussion of the choice and enactment of the relevant accounting objects holds practical value.
Originality/value
The roles of MA in servitisation are discussed in more detail in light of the existing literature. Moreover, treating MA as a social phenomenon sheds light on the unaddressed sides of the control in the servitisation context. This supplements the existing service literature, which is dominated by mechanistic cost‐system considerations.
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Teemu Laine, Jari Paranko and Petri Suomala
The purpose of this paper is to examine the potential benefits of a business game on customers’ business in enhancing servitization. The concept is proposed to be helpful in the…
Abstract
Purpose
The purpose of this paper is to examine the potential benefits of a business game on customers’ business in enhancing servitization. The concept is proposed to be helpful in the phases of defining the servitization initiative and gaining shared understanding about it at a manufacturer.
Design/methodology/approach
The paper is based on a longitudinal case study at a manufacturer (2003‐2008), with a focus on the business game concept on customers’ business. The researchers and approximately 140 company representatives contributed to both early and later phases of the development of the concept.
Findings
The business game concept appeared to serve the purpose of generating and sharing ideas about the customers’ business and the desired role of the OEM in it, as a potential outcome of servitization. The concept synthesizes the previously fragmented customer awareness across the business units and provides useful information for various stakeholders. The presence of personnel across the different business units and from a key customer company in the game events enabled new types of discussion related to the servitization initiative.
Research limitations/implications
The concept presented in this paper represents a potential tool for enhancing a servitization initiative. Due to the limitations of the case, the findings are tentative and primarily transferrable to contexts where a manufacturer provides machinery for industrial production. Moreover, the ability of the concept to capture real‐life customer values is critical for success and thus should be carefully examined.
Originality/value
The case study enables an in‐depth view of the phenomena under examination. Moreover, due to the researchers’ interventions in developing and using the concept, they observed actual processes of overcoming the challenges of servitization.
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Petri Suomala, Tommi Lahikainen, Jouni Lyly‐Yrjänäinen and Jari Paranko
In spite of the increased research activity on inter‐organizational cost management (IOCM) and open‐book accounting (OBA), detailed evidence on the application of these tools in…
Abstract
Purpose
In spite of the increased research activity on inter‐organizational cost management (IOCM) and open‐book accounting (OBA), detailed evidence on the application of these tools in real‐life settings is still relatively sparse. Increased outsourcing and supplier responsibilities call for more thorough understanding on the possibilities and variations of supply chain cost management. As a research avenue, in‐depth case studies have been invited to elaborate the cost management interaction between companies. This paper aims to address these issues.
Design/methodology/approach
This paper is based on an interventionist research within two supply networks. By making research interventions on the development of cost management practices among the suppliers, the researchers have set the ground for implementation of OBA, which, then, has provided a box seat to observe the process of OBA and its associations with the different forms of control. Within these two networks, this paper focuses on two OBA episodes portraying different facets of openness in IOCM.
Findings
This paper presents OBA as an accounting template with a seemingly flexible character. By relying on the empirical study, the paper shows how OBA might be used for mitigating the component's price increasing pressures and, thus, controlling the costs of the end product in hybrids resembling very much market conditions. However, the very similar OBA procedures can be applied for achieving the long‐term goals of partnering in hybrids resembling to a great extent hierarchical structures. As the paper shows, the best corresponding control archetype for a given OBA application largely depends on the purpose defined for the IOCM activity by participating stakeholders.
Originality/value
Thus, far, there are no interventionist studies on OBA and, hence, the research setting provides an interesting new element to the extant literature on OBA and IOCM. However, the research method does not have intrinsic value. Thus, the contribution, and therefore also the originality, of this paper is based on new aspects provided to the theory on OBA.
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Stephen L. Vargo, Robert F. Lusch, Melissa Archpru Akaka and Yi He
Sinikka Lepistö, Justyna Dobroszek, Lauri Lepistö and Ewelina Zarzycka
This paper aims to explore controls within an inter-organisational relationship involving outsourced management accounting services from the contractor’s perspective.
Abstract
Purpose
This paper aims to explore controls within an inter-organisational relationship involving outsourced management accounting services from the contractor’s perspective.
Design/methodology/approach
Qualitative data from within the relationship are analysed in a legitimacy-theory framework, illustrating how controls within the relationship are intended to build the contractor’s legitimacy and what kinds of implications the controls have in relation to conflicts between interests inherent in the relationship.
Findings
The legitimacy perspective clarifies that while controls are aimed at ensuring efficiency for the client, they may also provide symbolic displays of the appropriateness of the contractor’s actions both at an inter-organisational level for the client and at an individual level for the contractor’s employees. While the contractor intends to build legitimacy with the client by demonstrating utility in the form of efficiency, the process also gives the client influence and allows the disposition in terms of shared values to be demonstrated. However, this process has some negative consequences for the contractor’s employees as it is insufficient for serving the boundary-spanning employees’ interests connected with the nature of their work. Hence, the same controls need to yield benefits and fair outcomes for employees. The controls simultaneously foster interconnections that contribute to permanence and formalise the outsourcing of complex services, thereby rendering such processes comprehensible and transferable to other settings, which can be seen to serve the contractor’s continuity interests.
Originality/value
The paper contributes to academic research by illustrating how controls within inter-organisational relationships not only steer boundary-spanners’ work to conform to a client’s needs but may also help to build legitimacy via symbolic properties in the presence of conflicting interests at both an inter-organisational and individual level. It specifically highlights the important role of boundary-spanners lower in the organisational structure, who both affect and are influenced by the intentions to build legitimacy with the client.
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Jo Bramham, Bart MacCarthy and Jane Guinery
Manufacturers across many sectors increasingly operate in high variety environments. Research evidence suggests that variety has a negative impact on performance. However, the…
Abstract
Purpose
Manufacturers across many sectors increasingly operate in high variety environments. Research evidence suggests that variety has a negative impact on performance. However, the research literature is limited on the enablers that allow variety to be managed effectively and efficiently at the “front‐end” of an organisation and in quotation processes in particular.
Design/methodology/approach
This paper presents case analysis of the quotation processes from manufacturers operating in high‐variety environments. Qualitative process modelling tools have been developed to allow representation of process complexities and informal process elements.
Findings
Findings are presented on generic mechanisms for absorbing and mitigating the impact of variety on quotation processes. A generic quotation process model is presented comprising four key decisions centres: customization request initiation and information gathering on customer needs, classification of requests, resource control, and identification of information for reuse.
Practical implications
The implications of the study for the automation of quotation processes in high variety and mass customization environments are discussed and it is speculated that different decision centres will dominate in different environments.
Originality/value
The generic model developed by this research offers insight into the functioning of the core process elements of the quotation system. Reviewing an organisation's structure and the information systems infrastructure supporting these decision centres should lead to the identification of potential system or reorganisation improvements.