Dynamics between Lean Service and Management Accounting Practices and the effect on motivation

Mathias Møller Laugesen

Student thesis: Master thesis


Lean has been one of the most prominent buzzword and influential ideas of business operations and business development for the last 20 year. The application to service operations is a significant new direction in operating a service in the 21st century. The Lean philosophy is not limited to operation, but is to be regarded as a holistic business strategy, where the Management Accounting Practices, MAP, play an important role in order to optimally reap the benefits from Lean Service operation. The dynamics between the Lean Service and MAP is therefore more interesting than ever. The findings of the thesis show that misalignment between Lean Service operation and MAP has a negative effect on motivation in an organization with knowledge‐intensive employees. Delivering good quality service and a feeling of competence and autonomy are essential to intrinsically motivating knowledge‐intensive employees. It is inhibited by several factors in the dynamics; a vertical orientation of the MAP inhibits the transverse flow Lean Service operation, higher targets than the value stream and competitive evaluation system and reward structures that inhibits cooperation, use of key performance indicators, KPI’s, for process improvement at the expense of the professional insight of employees. The positive elements, which increase the motivation, are the common understanding of KPI’s and decision‐making through visual performance measurement, which is used for organizing workload and prioritizing. The case study is built in the empirical case of KMD implementing the Lean Service initiative, KMD 2.0. KMD is a Danish IT‐company, which has implemented this Lean Service program, KMD 2.0. The main purpose is not providing generic applicable findings, but rather single case study with reflections and suggestions, which can be subject to further investigation. The point of departure is literature reviews of the motivational theories, Traditional MAP theory and Lean theory, covering Lean Service and Lean MAP. The literature reviews are used for identifying gaps in the existing knowledge, which is be addressed in this thesis and is point of departure for the investigation. In general the thesis has contributed to the theoretical research field by combining Lean Service, Lean MAP and Motivational theories. The thesis extents and connects the three areas of knowledge. The practical implications are addressed in terms of suggestions for improvements initiatives, which can align the MAP with the Lean Service operation in KMD. It would not only result in improved motivation of the employee, but also entail improved performance.

EducationsMSc in Management of Innovation and Business Development, (Graduate Programme) Final Thesis
Publication date2015
Number of pages96