Management Control for Innovation in Developing SME: Balancing Inspirational and Constraining Controls:Paper for presentation at the ENROAC Conference in Tartu Estonia 10-12. June 2025

Accounting has traditionally been conceived as a constraining force in organizational development, strategic renewal and innovation. But recent development in management accounting and control (MAC) research has pointed towards the strong and many faceted relations between design and use of MACs and organizational change. SME’s do often experience multiple changes in their organiza-tional processes, especially during growth but also during succession of leadership between genera-tions in family-owned SME’s that can put special demands on such processes. The case study in this paper utilizes longitudinal interventionistic action research in a Japanese family-owned SME produc-tion company to make a case of how accounting change has developed the organization and the busi-ness and how the MAC has changed to accommodate and utilize tensions from challenged institu-tional logics. Challenges come among others from digitalization clashing with craftmanship and dif-ferent logics between market demands and efficiency demands from lean production.