What is it about?
We used an organizational transformation framework to see how organizational strategy, organizational structure, organizational culture, the extent of use of lean practices in operations, and management accounting and performance measurement affect operational and financial performance in facilities engaged in lean transformations. The organizational transformation framework proposed bi-directional relationships. Positive changes can create a positive reinforcement and continuous improvement throughout the system, while negative changes can stall improvement or even create a negative spiral. We were only able to test relationships in a single direction using our survey data. Based on prior studies, we chose strategy (top management's decision to support lean practices) and used of lean practices and tools in operations as starting points to drive a lean transformation. We also found that greater employee empowerment, changes in organizational structure to support lean, the use of lean process performance measures, and use of lean accounting practices were driven primarily by lean strategy (top management supporting lean), and secondarily by use of lean practices and tools in operations. Changes to organizational culture supporting lean, however, was driven by use of lean practices and tools in operations. Retaining a traditional organization structure was the chief obstacle to improved operational and financial performance in our sample of facilities engaged in lean transformations.
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Why is it important?
It is widely held that top management support is critical to a successful lean transformation. Top management can enable changes in organizational structure and accounting practices to support lean, increase employee empowerment and encourage lean practices. Creating a lean culture is also critical to sustaining a lean transformation. Our study suggests that lean culture arises organically from practice. It cannot be imposed by top management
Perspectives
Many research studies focus on the relationships between a few variable in isolation. We believe organizational strategy, sturucture, culture, operations, and information and performance measurement are all interrelated and affect each other in the pursuit of organizational performance. In this study we examined those interrelationships. While our study was restricted to examining one-way paths between what I believe are bi-directional relationships. I think the study yielded important insights for companies engaged in lean transformations, and for researchers studying organizational change.
Lawrence Grasso
Central Connecticut State University
Read the Original
This page is a summary of: The Association between Management Accounting Practices, Organizational Characteristics, and Facility Performance, October 2021, Emerald,
DOI: 10.1108/s1474-787120210000033002.
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