Innovation Cost Determination by Tracking Innovation in Maps

32 Pages Posted: 30 Sep 2016 Last revised: 4 Oct 2016

See all articles by Francisco M. Somohano

Francisco M. Somohano

University of Cantabria - Faculty of Business & Economics

Francisco J. Martinez Garcia

University of Cantabria - Department of Economics

José López-Fernández

University of Cantabria

Date Written: September 27, 2016

Abstract

This paper discusses how cost affects Management Control System (MCS) choices and effectiveness in creative contexts from a cost and benefit of information approach. We used Tessier and Otley’s (2012) conceptual development of Simons Levers’ control framework to propose an overhead cost allocation in a fashion textile company’s design department. This is a two-step action study. First, we analyse historic new design data using social network analysis software to introduce the concept of innovation maps or family design maps (designs networks). Second, we apply an allocation methodology based on these families’ costs. Several problems regarding an absence of data and the quality of data resulted in that some families were wrong defined, but the cost model was implemented with appropriate data fixing and data recording. This is an illustration of the importance of technical controls, which affect employee perceptions to induce a negative attitude. Typically, diagnostic versus interactive data or rewards versus punishments in terms of the use of controls are more often discussed by scholars that quality of data.

Keywords: LOC; Innovation; Cost; Ambidextrous; Network; Map

JEL Classification: M41; O32

Suggested Citation

Somohano, Francisco M. and Martinez Garcia, Francisco J. and López-Fernández, José, Innovation Cost Determination by Tracking Innovation in Maps (September 27, 2016). Available at SSRN: https://ssrn.com/abstract=2844259 or http://dx.doi.org/10.2139/ssrn.2844259

Francisco M. Somohano (Contact Author)

University of Cantabria - Faculty of Business & Economics ( email )

Santander 39005
Spain

Francisco J. Martinez Garcia

University of Cantabria - Department of Economics ( email )

Av. Los Castros s/n
Santander 39005, Cantabria 39005
Spain

José López-Fernández

University of Cantabria ( email )

Santander 39005
Spain

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