The problematization of IC indicators in action

Even though academics and practitioners have developed several IC Measurement Systems (ICMSs) over the past two decades, their actual use in practice is still limited. The purpose of this paper is to contribute to understanding the levers and the barriers to the use of ICMSs and, as a consequence, to the spread of IC management practices. The paper presents a single in-depth case study of a medium-sized Italian company which has been measuring its IC for several years. The actual research project was conducted using an interventionist approach. In the case company, many IC measurement tools have been proposed to fulfill the General Manager’s information needs, which evolved over time. However, this series of attempts has not led to the actual use of the IC information for managerial purposes. More specifically, the case shows that the problematization of IC indicators and measurement tools did not succeed in transitioning from indicating to acting because some barriers arose. In particular, it emerges that the mindset used to understand and interpret IC measurement tools can play a central role in hindering or enabling their use in practice. “Traditional” management accounting indicators present some qualities (conciseness, precision, accuracy, reliability, rigor, timeliness) and clear rules to be followed for their calculation. As a consequence, “reading” IC information with these “lenses” can hinder its use and can be an obstacle for acting upon IC. Other kinds of lenses have to be used to interpret IC, i.e. the lenses of processes, local knowledge and operational details. Therefore, a “skillful” interpretation of the information provided by the ICMS is needed. Even though the use of a single case study provides in-depth and rich data, it also limits the generalizability of the observations to other companies. Moreover, the results obtained can be influenced by the model adopted. The paper contributes to narrowing the gap between IC theory and practice and offers new insights on some hindering or enabling factors which may influence the transition from indicating to acting. The findings can support companies to enable IC management practices, by creating the conditions to overcome the barriers to the use of IC information provided by the measurement system.