Evaluating Industry 4.0 investments: Beyond the old wine in new bottles

Journal title MANAGEMENT CONTROL
Author/s Riccardo Giannetti, Lino Cinquini, Mario Rapaccini
Publishing Year 2021 Issue 2021/suppl. 2
Language Italian Pages 26 P. 65-90 File size 301 KB
DOI 10.3280/MACO2021-002-S1004
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

Industry 4.0 technologies significantly impact business models, competitive strategies and the configuration of production systems. The evaluation of the economic and financial impacts is problematic since these technologies are complex and heterogeneous. Furthermore, these technologies can be combined in various manners, generating unpredictable effects that bring about a great deal of uncertainty in the evaluation process. There is a need to assess both the monetary and non-monetary aspects of introducing these technologies, especially in the context of small and medium-sized enterprises (SMEs) that frequently have less sophisticated management accounting systems. This article presents an evaluation model and examines how this model has been developed in collaboration with different stakeholders, shedding light on various tangible and intangible aspects under assessment and the computational aspects of the evaluation. The results show that to conceive a model with a satisfactory degree of fit, its structure must be aligned with the specific context, particularly with the cultural and technical profile of the user.

  1. Busco C., Quattrone P. (2018), In Search of the “Perfect One”: How accounting as a maieutic machinesustains inventions through generative ‘in-tensions’, Management Accounting Research, 39, 1-16.
  2. Brignall S. (1997), A contingent rationale for cost system design in services, Management Accounting Research, 8(3), pp. 325-346.
  3. Caylar P.L., Noterdaeme O., Naik K. (2016), Digital in industry: From buzzword to value creation, McKinsey&Company, Digital McKinsey, 2.
  4. Chiucchi M.S., Gatti M. (2020), Back to reality. Il gap tra teoria e prassi negli studi di controllo di gestione: quali prospettive?, Management Control, Suppl. 1, pp. 5-10. DOI: 10.3280/MACO2020-001-S1001
  5. Cinquini L. (2018), L’Activity-Based Management: costing e performance per la gestione dei processi, in Cinquini L., Giannetti R., Marelli A., Tenucci A., Cost Management Vol. II, Torino, Giappicchelli.
  6. Clancy D.K., Collins D. (2014), Capital budgeting research and practice: the state of the art, Advances in Management Accounting, 24, pp. 117-161.
  7. Cooper D.J., Ezzamel M., Qu S.Q. (2017), Popularizing a Management Accounting Idea: The Case of the Balanced Scorecard, Contemporary Accounting Research, 34(2) (Summer), pp. 991-1025.
  8. David R., Strang D. (2006), When fashion is fleeting: Transitory collective beliefs and the dynamics of TQM consulting, Academy of Management Journal, 49, pp. 215-233.
  9. Davila T. (2000), An empirical study on the drivers of management control systems’ design in new product development, Accounting Organizations and Society, 25, pp. 383-409.
  10. DiMaggio P., Powell W.W. (1983), The iron cage revisited: Institutional isomorphism and collective rationality inorganizational fields, American Sociological Review, 48, pp. 147-160.
  11. Dallocchio M., Salvi A. (2004), Finanza aziendale, Seconda edizione, Milano, Egea.
  12. Davila T., Epstein M., Shelton R. (2006), Making Innovation work. How to manage it, measure it, and profit from IT. By Pearson education Inc, Publishing as Wharton School Publishing, New Jersey, Upper Saddle River.
  13. Donna (1999), La creazione di valore nella gestione dell’impresa, Roma, Carocci.
  14. Donna (2003), L’impresa multibusiness. La diversificazione crea o distrugge valore?, Milano, Egea.
  15. Gebauer H., Fleisch E.C., Wortmann L.F. (2020), Growth paths for overcoming the digitalization paradox, Business Horizons, 63 (3) pp. 313-323.
  16. Giannetti R. (2013), Dal reddito al valore. Analisi degli indicatori di creazione di valore basati sul reddito residuale, Seconda edizione, Milano, Giuffrè.
  17. Harris P., Hendricks M., Logan E.A., Juras P. (2018), A reality Check for today’s C-suite on Industry 4.0. KPMG International, Industry 4.0 report.
  18. Jansen E.P. (2018), Bridging the gap between theory and practice in management accounting
  19. Reviewing the literature to shape interventions, Accounting, Auditing & Accountability Journal, 31(5), pp. 1486-1509.
  20. Jönsson S., Lukka K. (2007), There and Back Again: Doing Interventionist Research in Management Accounting, Handbooks of Management Accounting Research, 1(06), pp. 373-397.
  21. Joppen R., Lipsmeier A., Tewes C., Kuhn A., Dumitrescu R. (2019), Evaluation of investments in the digitalization of a production, 52nd CIRP Conference on Manufacturing Systems, pp. 411-416.
  22. Kang H.S., Lee J.Y., Choi S., Kim H., Park J.H., Son J.Y., Do Noh S. (2016), Smart manufacturing: Past research, present findings, and future directions, International journal of precision engineering and manufacturing-green technology, 3(1), pp. 111-128.
  23. Kennedy M.T., Fiss P.C. (2009), Institutionalization, framing, and the logic of TQM adoption and implementation decisions among U.S. hospitals. Academy of Management Journal, 52, pp. 897-918.
  24. Kowalkowski C., Gebauer H., Kamp B., Parry G. (2017), Servitization and deservitization: Overview, concepts, and definitions, Industrial Marketing Management, 60, pp. 4-10.
  25. Irani Z., Ghoneim A., Love P. E. D. (2006), Evaluating cost taxonomies for information systems management. European Journal of Operational Research, 173(3), pp. 1103-1122.
  26. Liebrecht C., Jacob A., Kuhnle A., Lanza G. (2017), Multi-Criteria Evaluation of Manufacturing Systems 4.0 under uncertainty. 50th CIRP Conference on Manufacturing Systems.
  27. Lukka K. (2000), The Key Issues of Applying the Constructive Approach to Field Research. In Reponen T., Ed., Management Expertise in the New Millennium: In Commemoration of the 50th Anniversary of Turku School of Economics and Business Administration, Series A-1:2000, Publications of Turku School of Economics and Business Administration, Turku, pp. 113-128.
  28. Malmi T., Järvinen P., Lillrank P. (2004), A Collaborative Approach for Managing Project Cost of Poor Quality, European Accounting Review, 13(2), pp. 293-317.
  29. Matlin G. (1979), What is the value of investment in information systems?. MIS Q, 3: pp. 5-34.
  30. Moll J. (2015), Special issue on innovation and product development, Management Accounting Research, 28, pp. 2-11.
  31. Oesterreich T.D., Teuteberg F. (2018), Why one big picture is worth a thousand numbers: measuring intangible benefits of investments in augmented reality based assistive technology using utility effect chains and system dynamics, Inf Syst E-Bus Manage 16, pp. 407-441.
  32. Rogers E.M. (1995), The diffusion of innovations (4th ed.), New York, Free Press.
  33. Sassone P.G, Schaffer W.A. (1978), Cost-benefit analysis: a handbook. Academic Press, London.
  34. Schneider P. (2018), Managerial challenges of Industry 4.0: an empirically backed research agenda for a nascent field, Review of Managerial Science, 12(3), pp. 803-848.
  35. Sgrò F., Palazzi F., Ciambotti M., Gelsomini L. (2020), Factors promoting and hindering the adoption of management accounting tools. Evidence from Italian manufacturing SMEs, Management Control, Suppl. 1, pp. 19-38. DOI: 10.3280/MACO2020-001-S1003
  36. Skoog M. (2020), Management Control Theory and Practice Integration - Challenges and Possibilities, Management Control, Suppl. 1, pp. 11-17. DOI: 10.3280/MACO2020-001-S1002
  37. Solomons D. (1973), Il controllo nelle aziende multidivisionali, Milano, Isedi, (ed. or. 1965: Divisional Performance: Measurement and Control, Homewood, Illinois R. D. Irwin, Inc.)
  38. Strang D., Macy M.W. (2001), In search of excellence: Fads, success stories, and adaptive emulation, American Journal of Sociology, 107, pp. 147-182.
  39. Suomala P., Lyly-Yrjänäinen J., Lukka K. (2014), Battlefield around interventions: A reflective analysis of conducting interventionist research in management accounting, Management Accounting Research, 25(4), pp. 304-314.
  40. Wee D., Kelly R., Cattel J., Breunig M. (2015), Industry 4.0-how to navigate digitization of the manufacturing sector, McKinsey & Company, 58.
  41. Whitten P., Collins B. (1997), The diffusion of telemedicine. Science Communication, 19, pp. 21-40.
  42. Yang C., Modell S. (2015), Shareholder orientation and the framing of management control practices: a field study in a Chinese state-owned enterprise, Accounting, Organizations and Society, 45, pp. 1-23.
  43. Ansari S. M., Fiss P. C., Zajac E. J. (2010), Made to Fit: How Practices Vary as They Diffuse, Academy of Management Review, January 1, 35 (1), pp. 67-92.
  44. Ahrens T., Chapman C.S. (2007), Management accounting as practice, Accounting, Organizations and Society, 32, pp. 1-27.
  45. Arnold G.C., Hatzopoulos P.D. (2000), The Theory-Practice Gap in Capital Budgeting: Evidence from the United Kingdom, Journal of Business Finance & Accounting, 27(5) & (6), June/July, pp. 603-626.
  46. Baard V.C., Dumay J. (2020). Interventionist research in accounting: reflections on the good, the bad and the ugly. Accounting & Finance, 60, pp. 1979-2006.
  47. Baines T.S., Lightfoot H.W., Benedettini O., Kay J.M. (2009), The servitization of manufacturing: a review of literature and reflection on future challenges, Journal of Manufacturing Technology Management, 20, pp. 547-567.
  48. Baines T., Lightfoot W.H. (2014), Servitization of the manufacturing firm: Exploring the operations practices and technologies that deliver advanced services, International Journal of Operations Production Management, 34(1), pp. 2-35.
  49. Baxter J., Chua W.F. (2003), Alternative management accounting research-whence and whither, Accounting, Organizations and Society, 28(2-3), pp. 97-126.
  50. Burchell S., Colin C., Hopwood A., Hughes J., Nahapiet J. (1980), The Role of Accounting in Organizations and Society, Accounting, Organizations and Society, 5(1), pp. 5-27.
  51. Burns J., Vaivio J. (2001), Management accounting change. Management Accounting Research, 12(4), pp. 389-402.
  52. Busco C., Quattrone P. (2015), Exploring how the balanced scorecard engages andunfolds: articulating the visual power of accounting inscriptions, Contemporary Accountiing Research, 32, pp. 1236-1262.

  • The impact of digitalisation on professional football clubs Fabio Nappo, Alessandra Lardo, Maria Teresa Bianchi, Federico Schimperna, in MANAGEMENT CONTROL 2/2023 pp.117
    DOI: 10.3280/MACO2023-002006
  • L'implementazione di tecnologie 4.0 nelle piccole imprese: analisi di un caso di successo Paolo Bogarelli, Nicola Castellano, in MANAGEMENT CONTROL 2/2023 pp.137
    DOI: 10.3280/MACO2023-002007

Riccardo Giannetti, Lino Cinquini, Mario Rapaccini, La valutazione degli investimenti in industria 4.0: oltre l’old wine in new bottles in "MANAGEMENT CONTROL" suppl. 2/2021, pp 65-90, DOI: 10.3280/MACO2021-002-S1004