Melco Management Accounting Research
Discussion Paper Series
No.MDP2020-004

Enhancing Organizational Learning by Communicating Accounting
Metrics in Strategy Formulation: A Case from a Japanese SME
Under Life-Long Employment
November 2020

Kosuma Shinohara *Associate Professor, Faculty of Commerce Department of Business Management
Fukuoka University
8-19-1 Nanakuma, Jonan-ku, Fukuoka-city, 814-0180, Japane-mail: shinohara@fukuoka-u.ac.jp
Hiroshi Adachi
Associate Professor, Department of Regional Development Department of Management,
Hiroshima Prefectural University*Corresponding author

The Melco Foundation
Nagoya, Japan
Discussion Paper Series of the Melco Management Accounting Research, in order to promote
the study of management accounting, has published this unfinished paper onto the Web. Pleaseobtain the permission of the author when citing this paper.

Enhancing Organizational Learning by Communicating Accounting
Metrics in Strategy Formulation: A Case from a Japanese SME Under
Life-Long Employment

Kosuma Shinohara1
Fukuoka University, Japan

Hiroshi Adachi2
Hiroshima Prefectural University

Abstract
This study aims to show the indirect effect of communicating accounting metrics
to each employee, through organizational learning, during the strategy crafting process.
We aim to contribute to the literature on strategizing and accounting, employee
participation, and the relationship between organizational learning and accounting. We
focus on how employees learn to acquire and translate information on “the future” as afurther step in the participation process –before the strategy is realized – and clarify how
accounting mechanisms contribute to this. To reveal these mechanisms in which peopleinterpret their intentions and words, we consider their rationale and perspectives in detailby investigating a Japanese SME providing IT services. Our data suggest that strategy
development requires employee learning, including accounting skills. The case firms
established mechanisms to help frontline employees learn to explore the strategic
information they needed from external and internal information, so that they could
recognize the discrepancy between the planned strategy and their work in the field andturn their attention to strategic initiatives. In this context, the accounting calculations
connected the future with the present and the past, encouraging employees to be
exploratory.
Keywords: strategizing, long range planning, employee participation, temporal work,organizational learning, case study
This paper is based on a presentation at ENROAC and MCA Joint conference 2019.

1
2

E-mail address: shinohara@fukuoka-u.ac.jp, corresponding author
E-mail address: adachi@pu-hiroshima.ac.jp1

1.

Introduction

This research aims to show the indirect effect of communicating accounting metrics
to each employee, through organizational learning, during the strategy crafting process.
We aim to contribute to the literature on strategizing and accounting, employee
participation, and the relationship between organizational learning and accounting. The
role of accounting in strategies has been discussed in the past decade (Ahrens & Chapman,
2005; Jørgensen & Messner, 2010; Nixon & Burns, 2012; Carlsson-Wall et al., 2015).
These studies suggest that strategies proceed by combining accounting information andnon-accounting information such as strategic objectives. For example, Ahrens andChapman (2005) discussed that management control information offers a way of gauging
the effects of different strategic designs and pursuing different degrees of flexibility
enjoyed by restaurants that operate within that overall design (Ahrens & Chapman, 2005;
p. 120). Jørgenssen and Messner (2009) observed how to use accounting metrics andinformation from daily activities to analyze the relationship between accounting andstrategizing in the process of new product development. They concluded that accounting
information “enters the picture as a general understanding that guides actors’ strategizing
efforts by reminding them of the ultimate importance of financial numbers” (Jørgensen& Messner, 2010, p. 184). The process of crafting strategy through communication indaily activities using management accounting systems, such as balanced score cards andmiddle range plans, is gradually revealed by these studies. In a similar discussion, Kaplan
and Olikowski (2013) consider “temporal work” – in which data are translated – in thestrategic planning process. They explored the process in which “data are interpreted,translated, and reconceived in light of past histories and present concerns as actors
reimagine the future.” (Kaplan and Orlikowski, 2013, p. 990) This discussion implies thatpeople’s ability and the way they encapsulate information about the future affect thestrategizing process. Management may not only have to install management accounting
systems for implementing strategy in the organization, but also enhance organizational
and individual learning to effectively use the system, thereby fostering the ability of
individuals to obtain information in the future. However, there is scant research on how
accounting information functions as members of organizations learn to “predict“ withinthese mechanisms (Jansen, 2015, p. 46).
Some studies have examined the relationship between organizational learning andmanagement accounting. Kloot (1997), who understood the concept of organizational
learning as a correspondence process within the environment, examined the situation on
the premise of the relationship between the features of management control andcomponents of organizational learning from a recursive standpoint (Simons, 1990, 1995,
2

1991; Gray, 1990). Kloot (1997) discussed how management control systems aredesigned to include features that fit four major constructs – knowledge acquisition,
information distribution, information interpretation, and organizational memory –thereby promoting organizational learning. Cobb et al. (1995), who understoodorganizational learning as the organizational response to environmental change,
examined the case of a bank. The results indicated that internal factors, in addition to
those of the environment, have an impact on changes, and that individuals – acting aschange agents – play a major role in coordinating and absorbing changes. Batac andCarassus (2009) observed that cultural and bureaucratic controls, as previous studies havesuggested, impede organizational learning and require lateral links in management toavoid it. The control systems that encourage organizational learning are influenced byinformation that is created using a purely business rationale. However, this is limited tosituations where learning takes place based on the nature of administrative, political, andpublic activities. These prior studies discuss management controls in general and leaveroom for more detailed analyses of how accounting information is acquired and utilized
by members of the organization. A study examining the interaction of organization
learning focusing on accounting information by Jansen (2015), focuses on therelationship between participation and accounting and other information that is employedin the learning process, based on the hypothesis that participation by lower level managers
and employees influences the learning process. He observed the kinds of effort being
made in the field to realize the new vision of “long-lasting relationships with customers”
versus “short-termism” (Jansen, 2015, p. 48). He analyzed the level of participation andcommunication among junior managers and employees, indicating that informal
communications supplement accounting information with fine-grained information,
providing learning to realize the vision (Jansen, 2015, p. 59), but fails to addresses how
the learning process is integrated into this process. In this study, we focus on how
employees learn to acquire and translate information on “the future” as a further step inthe participation process before the strategy is realized, and clarify how accounting
mechanisms contribute to this.

2.

Research Framework

In this study, we examine the relationship between the organizational learning
process and accounting systems in the formulation of strategy. Consequently, a detailed
discussion of the various concepts used in the analysis is provided here. We discuss theconcepts of strategizing and organizational learning, followed by how to separate
accounting information from other information.
2.1

Strategy formulation and accounting metrics
3

Whittington proposed that research on strategy is investigating the achievementsof “highly skilled workers such as senior and middle management strategic planners,
organization development experts, management consultants, communications specialists,and even lawyers and investment bankers.” (2003, p. 117) He explores: (1) where andhow strategizing and organizing work is done; (2) who does this work; (3) what skills are
required for this work and how they are acquired; (4) what tools and techniques arecommon; (5) how the work itself is organized; and (6) how the products of strategizing
and organizing are communicated and consumed.
Following prior studies, our research on accounting has focused on these questions
using Simons’ (1994) framework. Specifically, we analyze hierarchical and horizontal
communications (Simons, 2005) that occur in managerial meetings – in which strategicplans are formed – and shop floor level meetings in which the planned strategy is sharedand further information gathered to test the hypothesis of the plan. We consider
strategizing through accounting communication in which organizational members adopt
a long-term view even when performing daily activities that are necessary to achieve
short-term business objectives. We use a “temporal work” perspective (Kaplan and
Orlikowski, 2010) to analyze the relationship between management accounting and time
recognition by organizational members. Kaplan & Orlikowski (2010) argued thatorganizational members interpret, translate, and reconceived data in the light of their pasthistory and present concerns as they imagine the future (Kaplan & Orlikowski, 2010, p.
990).
We consider our data from this perspective and question how accounting practices
enhance or impede the long-range view of organizational members; how accounting isused to interpret past information, translate present concerns, and reimagine the future.
We also consider how members acquire a long-term perspective through temporal work.
More concretely, we analyze sites of communication such as management meetings,
workshops in the company, and corporate social network systems where strategic plans
and future visions are used. To understand these questions, we should investigate theorganizational learning process (Argyris, 1977, 1990). When organizational members
assume temporal work, their ability to perform such work affects the outcomes. In thisstudy, we thus investigate individual learning to do “temporal work” and organizational
schemes that will enhance individual learning into the future.
2.2

Research questions and research design
This study seeks to address the following research questions:
Q1. How does management encourage organizational members to obtain4

information from within and outside the company that will affect the strategic planning
process?
Q2. How does accounting practice affect the construction of accounting “temporal
work” to reinterpret the past, recognize the present, and review the future vision?
Q3. How is the process designed to capture this information?
Q4. What types of learning is designed by organizations to enable individual
employees to obtain such information?
We conducted case-based qualitative research to discuss the “how” and “why” byfocusing on the process (Yin, 1994). To reveal these mechanisms in which peopleinterpret their intentions and words, we consider their rationale and perspectives in detail.
We investigated a Japanese SME providing IT services (GSCo) with 36 employees. Theirbusiness and organizational members are growing. We conducted several participatory
observations and interviews with the president and selected managers (see Appendix 1).
We recorded the meeting observations and interviews and transcribed the data into
Japanese. We supplemented this with data obtained through text messaging with the
General Manager of Corporate Planning, including presentation materials. Although thesurvey is still ongoing, the data used in this study were collected between November 2013
and May 2016.
All employees are employed under comprehensive employment contracts, as iscommon in Japanese companies, and lifetime employment is an implicit premise. To
execute these employment contracts, the company needed to establish a long-term plan
to educate employees and prepare their career paths.

3.
3.1

The Case Study

Introducing GSCo
GSCo was founded in 2005, and its software products are mainly for small

constructors. Their business domain is software planning, development, sales, after sales
support, and consulting services. GSCo develops and sells crowd software, which is addon to the general crowd network service for business. This software is used to share daily
reports, which include the status of the construction site with administration and is also
used to communicate among the constructors, customers, and administrators. The salesof this crowd software constitutes 60% of GSCo total sales.
Constructors, through generating daily site reports, are required to inform
administrators whether the construction has progressed as planned and whether thequality of the work meets the required standards. Thus, GSCo recognizes both5

constructors and administrators as customers, and sales staff investigate market
information from not only the constructors who implement their software, but also fromadministrators of the construction site.
GSCo compete on the functionality of their software together with the efficiency
and smoothness of its implementation and the process of generating reports. GSCo aims
to provide business improvement services such as system installations, online help, andmaintenance.
3.2

Rise of the Strategic plan of GSCo

GSCo began compiling their middle range strategic plan in 2014 to achieve thegoal of securing long-term employment and developing human resources that contributeto the local economy. The strategic meeting among the management team, termed the“Dream Meeting”, was held to decide the outline and objectives of the plan. The plan wasthen detailed in several management meetings, culminating in the “Dream Plan” that was
released and shared at the launch meeting to which all the members of GSCo and otherstakeholders and observers were invited.
In the first Dream Meeting, the CEO called for ideas about the middle range
direction and the scenarios comprising the vision and strategy of management members.
The participants of that meeting were the CEO and divisional managers from sales,
support, and planning. A draft proposal for further discussion, which was prepared by thedivisional planning manager and CEO, was presented at the beginning of the meeting.
The draft was used to develop business direction for the next five years, showing the
SWOT analysis and forecasted income statement of the business. The CEO firstmentioned the objectives of this meeting when introducing this draft.
In this Dream meeting, we will talk about the dream and what should I do toachieve it. This is the “Dream” Meeting 2014. This material describes us
after 5 years. This is my intention. The numbers are decided because nothing
will advance if I as a CEO do not decide the numbers. (CEO: 2014.01.25)
He emphasized that the meeting was for drawing up a “dream”. Before he talked
about the detailed meaning of the dream, he presented the numbers and plans to achievethis. He explained to the participants the importance of how to achieve the dream andwhy understanding accounting is necessary to avoid an unrealistic outcome or fantasticalplans. He explained that practically:(When we planned before), we only set the profit target without a resource
allocation plan and ended up with an unrealizable goal. To make sales andprofit, we must invest. We will capture these numbers and calculate the6allocation in this meeting. (CEO: 2014.01.25)
Specifically, sales targets for every future block of 5 years were set by estimating
the rate of increase in purchase prices, labor costs, profit rate, productivity3 per person,
operation costs of the back office and company, interest rates, and current profits were
described to the members with their intentions and motivations. In particular, the CEO
emphasized the need for investment, the increase in labor costs, and productivity, by
explaining:(The target number of employees is) 50. They are not here yet. The labor costand productivity that I always stick to will be almost 11 million yen this year.
The productivity per person has been increased again, although it was 9.5
million yen last year. I want to continuously raise the productivity per person
to 15 million yen over the next 5 years. Thereafter, I want to raise salaries
from 5.7 million now up to 7.5 million yen, which, at this level, is in line withcompany D (which is paying one of the highest salaries in their region).
(CEO: 2014.01.25)
In these conversations, he repeated the word “dream”. This can be interpreted as along-term target or vision. More importantly, he emphasized accounting perspectives to
explain the content of the vision in reference to the proposed salary increases for
employees. Thus, he explained that the first target is to raise the labor share rate, which
will be driven by gains in productivity. Each employee needs to undertake cost
optimization and pursue increased sales. However, he also explains that it is difficult toachieve the plan only in the existing market and with the existing products of GSCo even
if GSCo can get a larger share.
If we increase the sales by 30% per year, they will reach 866 million yen whichis 3.7 times the current sales. Sales manager will commit to 233 million, andthe Crowbous (the product name) for the Ministry of Land, Infrastructure andTransport will be 130 million. If we add the sales for A prefecture, B
prefecture, and C prefecture, we cannot reach that number. It is just a dream.
If we sell existing products to existing customers, there are no gains. This will
only double sales in 5 years. It is hard. We, of course, must initiate something
new. (CEO: 2014.01.25)
To achieve these estimated numbers, they considered three alternatives: existing
technologies to new customers; new products to existing customers; and new
Productivity is calculated as sales - purchases in GSCo. It is also called gross profit. GSCo's
productivity is higher than the average top 25% of companies in the industry.
7
3

technologies to new customers. They also discussed the approach need to achieve these,basing the discussion on customer strategy maps.
3.3

Strategic discussion on customer strategy maps

In the process of embodying the vision with accounting metrics, the team had toredefine the business domains. GSCo created strategy maps of their customers to redefine
their existing businesses. Understanding their customers helped their vision-making
process. Figure 1 shows the strategy map of their customers, with the three center ellipses
expressing GSCo's new business domain with other possible services that GSCo may
provide for the customers' four perspectives (financial, customer, internal businessprocesses, and learning and growth).

Figure 1. Customers’ strategy map
The ellipse on the customer perspective defines public construction services where
GSCo provides services to support their customers in their interaction with markets. It isaimed at supporting effective communication between constructors and administrators.
The ellipse on the process perspective defines a solution for the construction business
which aims to provide wider support to improve customers' business processes. The
vertical ellipse shows GSCo's ultimate target, which is defined as a communication andmanagement business that supports customers' learning and growth. This domain has yet
to be commercialized, but has been in the research and business development stage. The
names on the right side are the targeted customers that were suggested and discussed forcommercialization. For example, they had conversations, as shown below.
CEO: We have been providing some horizontal market development even now.
8

We are developing existing customers to provide new services. We have
prepared to develop A prefecture, B prefecture, and part of C prefecture. We
could do that type of development.
Planning Manager: Yes, we have done horizontal development and started toprovide KINTONE services (which are optional services for existingproducts).
CEO: To sum up (those new services), our sales might gain approximately 40
to 50 million yen. (2014.01.25 from meeting)
Horizontal market development involves transferring specific successful sales
models from the current areas, where new products had been sold to existing customers,
to other areas. The meeting discussed the allocation of human resources with reference tothe estimation of sales of horizontal market development. Figure 2 shows an overall
picture of GSCo's future business domains arising from this discussion.

Figure 2. Future business domain map of GSCo
The horizontal line indicates the products and know-how. The vertical line indicatesthe markets. They are both divided into existing and new categories. All business domains
were located whether each domain was new or existing. The existing main products forthe construction site are defined as the social construction solution domain, which aims
to achieve 500 million yen per year in five 5 years. The construction business solution
domain is defined as a domain that requires expansion of existing knowledge and9products to fit the new market. The communication and management domain is defined
as an area that requires all new know-how and target settings. It is noteworthy that theemployee numbers and target fiscal sales amount expected over the next 5 years areindicated with each business domain.
As labor cost constitute most of the expenses of GSCo, employee numbers areindicators of future investment. To align their image of the future with the present
situation, they discussed the possible market size of the business domain and shared it.
They estimated the allocation of staff to new domains by raising the complement of
employees. This process translated the vision into a concrete plan assisting participantsin understanding the need to redefine their business. Based on the customer strategy map,
accounting perspectives encapsulated the vision as a strategic plan. However, as a goal,
their business ideas remained abstract. The participants discussed and recognized the gaps
between these targets and the present reality by applying these accounting metrics. From
this discussion they agreed a five-year planned income statement, definite allocations ofhuman resources, and strategic issues to be addressed.
3.4

Strategic formalization process

Based on the strategic plan that was composed in the Dream Meeting, each division
formulated their objectives and plans, which included on-site information. These plans
were compiled as an annual action plan for distribution to all employees, consisting ofboth financial and qualitative reviews of the previous fiscal period, the plan for the current
period, the strategy map (Figure 3), the vision of business domain development in thenext five years (Figure 2), a commentary sheet on strategic intent, corporate policies, andthe budget plan. Figure 3 shows the strategy map of GSCo. Each box expresses a strategic
purpose, which is also guided and clarified by the commentary sheet, which emphasizes
the importance and practical descriptions of each strategic purpose, identifies the person
in charge, and sets tangible targets.

10Strategy map of GSCo（2014）
financial

1_Gaining marginal
profit（corporate）

2_Investment for
new business（CEO）

3_Custmer Satisfaction（Corporate）

Customers andmarkets

5_Inclease sales of
Crowbous forprefectures（Sales
division）

process

7_Implovement ofexisting services（planning,development
division）

4_Inclesae Sales
productivity （Sales
division）

Tax
payment

Reduction ofenvironmental
burden8_Balanced
customer support（service）
9_Adequate
positioning（planningdivision）

10_Building afoundation system forcoping with expecting
sales amount （D）

Learning and
Growth12_Implovementof workplaceenvironment（C）

17_colloborative
creation of new
business（planning
division）

6_Inclease unit
price （planning
division）

SocialContribution

11_ Back officedevelopment for
coping withexpecting sales
amount （P）

13_Implovement of internal
communication andmanagement（C）

15_ Strengthening of theorganizational structure（C）

14_Personnel Skilldevelopment（C）

16_Implovement of quality ofservice（D）

Employment
creation

Beatificationof the area
ProvidingKnowhow() means division which has accountability for the strategic purpose.
C: Corporate S: Sales division P: Planning S: Support D: Development

Figure 3. Strategy map of GSCo (2014)
Some strategic planning meetings were held to make the strategy more concrete.
Through a process of reflection on information that the frontline staff provided, thestrategic understandings and agreement of organization members were fostered. Strategic
review meetings are open to every organization member, and the CEO invites
participation at every opportunity. All members participating in the meeting can give theiropinions on the strategy. The planning manager describes the meetings as “the primary
purpose of the strategic review meetings is to reach agreement on the planned strategy
through the process of strategic formulation in which everyone participates.” GSCo seeks
to enhance employee participation by gathering ideas from employees and adopting thesewhere appropriate.
As a base to share strategic information with every organization member, GSCo
also uses an internal information system. This is a discussion board on an intranet where
every organization member can post and browse. The CEO can also give directions tomembers, who in turn can provide feedback by posting individual activity reports. As
every member has an obligation to post about the findings of daily work processes as partof the management by objectives system, information that is far from daily activities canalso be shared. When the discussion board was first introduced, it was seldom used,however, its increased practical use gradually encouraged everyone to post daily activity
11updates, resulting in the sharing of a significant volume of information. The CEO and theplanning manager checked this information board for several hours every day, thus
investing heavily to capture this strategic information.
However, according to the planning manager, the information from front line staff
was primarily about the situations around them, such as “I want a system for mycustomer’s site because of difficulties like… The CEO of my customer said such athing… The staff did not reach the level to collect the information to formulate strategy.”
Thus, the CEO and the planning manager sometimes provided the frontline staff with anexact theme for the collection of strategic information. GSCo was trying to obtain
information from the front line and deliver daily communications on strategic thinking sothat they can formulate a real-time strategy. More importantly, managers enhanced
members’ accounting knowledge and their ability to obtain information on the future byhelping them understand the strategic direction using accounting rationale (Jørgensen and
Messner, 2010). In summary, the degree of employee participation in the planning processof GSCo was high4 (Dachler and Wilpert, 1978), and they used the planning process not
only to capture strategic information but also to enhance the participation and strategic
thinking capabilities of front-line staff.
3.5

Organizational Learning Workshops for members

GSCo conducts an annual corporate presentation to share their strategic plan with
their stakeholders, such as organizational members, cooperation companies, and thepresidents of companies from the same regional. In this meeting the CEO and theplanning manager present a review of the preceding fiscal year and strategic plans for the
next five years. They conduct workshops in which all members are divided into groupsof four, regardless of their affiliation, to discuss the relationship among their strategic
objectives, daily activities, and budgetary targets. During this workshop, each employee
consolidates a strategy map and a strategy goal sheet (Figure 4) as determined by eachdepartment. Participants interpret past information from daily activities, and based on this,announce to group members what actions they will take to achieve each strategic
objective. Participants are provided with an opportunity to interrogate the plans of otherdepartments in the group to clarify the actions needed to achieve these, including any
related work processes. This process enhances participants’ knowledge and information

4

After making the middle range plan, GSCo's situation of strategic sharing seems to be improvingfrom the perspectives of the organizational capability about collecting information and willingness oforganization members to participate in strategic review meetings which have shown a participation
rate of more than 60%.
12

to achieve the vision of the future.

Figure 4. Extract of consolidated strategy sheet
GSCo also holds daily training workshops in which organizational members learn
about the organization’s philosophy and accounting approach. Participation is notmandatory, but members can receive a bonus if certain participation levels are achieved.
During this workshop, they read through the yearly action plan book and give each otherspecific updates about their action, while discussing the relationship between daily
actions and monthly budgets. In this workshop, the organization gather current
information from each employee, who in turn gain knowledge on translating daily
activities into accounting terminology.

4.
4.1

Discussion and Conclusion

Inseparability of strategy and strategic plans
The mid-term management planning process for GSCo was presented, but what isapparent is that the strategy and the strategic plan, including the numerical plan, weredeveloped simultaneously. The long-term vision, which the CEO described as a dream,
was restated using an accounting sales target calculated using contributions from theworkforce, and conveyed to top and middle management. A strategy and strategic plan
were developed.
The strategy was to select the opportunities for value creation using the strategy
map of the customer in order to include the sales calculated using sales targets, including
how to grow the product, know-how, and market. Replacing this vision with accounting
metrics and using these figures to develop strategies from the interactions between the13market and internal resources is consistent with the strategic sharing effects of the budget
and strategic plan linkage. The head of the planning group stated that the purpose of thestrategy review meeting was to raise the awareness of all employees to work together on
strategic issues. It is important that an accounting perspective was provided in order for
employees to gain an understanding of the vision. The strategy developed based on thevision, the strategy map of the customer used as a supplementary measure, and the reviewof the future business domain are all linked by accounting metrics. In GSCo's strategicplanning process, these are inseparable and consequently shared.
4.2

Participation in strategy formulation and form strategies as a learning package

One of the criticisms of Mintzberg (1994) was that the separation of strategy andstrategic plan resulted in “Lack of strategy <Activity>“ (Mintzberg, 1994, p. 277). By
integrating these inseparable planning processes, GSCo aims to integrate the daily
operations with the strategic planning process of top management. In other words, thebasis for the vision and management's strategic plan, which are the premise of the strategy,
are informed by accounting information, enabling the strategy to be reexamined andformulated.
The business also incorporates a strategy-sharing mechanism in its day-to-day
operations, and the immediate exchange of information is a prerequisite for considerationby the Management Committee. Without such information sharing, strategic planning inan organization can be difficult. If information sharing and the assessment of strategy are
limited to management, a long time is spent on onerous amounts of management
information. To avoid this, effective strategy formation is achieved by synchronizing theperceptions of members on the current status through immediate information sharing in
combination with strategic examination being undertaken by understanding the market
and internal resources from an accounting perspective.
Accounting rationale is emphasized in the explanation of strategy. The strategy isthen developed from an accounting perspective to ensure the understanding andcommitment of each employee, through a process of translating information on the futureof the corporation to each person. This is an important element of the learning package,
which also includes an individual learning process within the company-wide sharing
process in developing management plans. At the workplace level, it was used to help link
daily work with company-wide plans, serving as a motivation to improve work as anextension of current efforts. Finally, GSCo designs organizational learning into daily
work to generate practical ideas for the development of new markets and new businesses.
This information acquisition is directed by superiors (behavior control), and motivation
for new work outside of regular work is fostered. This is the reinterpretation of future
14

plans based on accounting metrics.
The two contributions of this paper are: first, it described the basic, detailed processof how management plans are constructed. As a result, we were able to provide an
example of what kind of information top management values when making medium- tolong-term plans and what their motivation and intentions are in making such plans.
Next, by integrating strategic information with accounting metrics, it is possible tocombine the process of strategic planning with learning, whereby the process of strategy
sharing constitutes learning, and inevitably there are aspects that encourage theemergence of strategy. The company's vision for the future is linked to and interpreted by
the understanding of the individual. Individuals who are satisfied with their vision of the
future translate past and present information according to the shared vocabulary of the
management plan and explore new approaches to daily activities. Information on the
future, which was not connected with present efforts, had to, at times, be actively
encouraged by management.
Certain challenges remain. First, although strategy formulation deals with detailed
processes, it has only been evaluated by top management. It has not been possible toconsider how frontline employees relate to the efforts described, which is important for a
deeper understanding of the emergent processes in strategy formation.

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Appendix 1. List of interviews and observations
No

Date

ObjectH

Method1

2013.11.6 Operations and Planning Group Managers

2.1

Interview2

2013.11.15 Executive Committee

2.5

Observation3

2014.1.10 Executive Committee

2

Observation4

2014.1.25 Executive Committee

3

Observation5

2014.2.28 Executive Committee

4

Observation

6

2014.6.28 Management plan presentation and workshop

7

Observation7

2014.6.28 Companywide Social Meeting2

Observation8

2014.8.26 CEO

2Interview

92015.7.2

3

Interview

Planning Group Manager

10 2016.5.19 CEO, Sales manager, planning group manager 2.5

16Interview