Fusing Accounting and Learning - the Measurement and Assessment of Knowledge Capital as Subject of Organizational Reflection

According to many authors, the information produced by performance measurement systems (PMS) about knowledge capital of organizations widens operative processes of management towards strategic learning processes. In contrast, this paper objects that the relevance of PMS for strategic learning processes stands on shaky ground. The main argument is that a self-referential use of PMS by neglecting unintended or even dysfunctional effects leads to the development of ‘blind spots’ and may avoid, finally, strategic learning processes. The paper argues that learning provoked by PMS requires a reflexive use of them. In this case, organizations mobilize PMS by intervening, reinterpreting and negotiating their assumptions and effects. PMS become a subject of change itself and are seen as an independent as well as dependent variable in the organizational occurrence. However, it is not self-evident that PMS are considered a dependent variable both in theory and practice. Therefore, we strengthen and substantiate this fact by vitalizing the learning approach by Bateson (1972) and its organizational adaptations by Argyris and Schön (1978) within the accounting discussion. The paper develops an analytical concept of organizational reflection for empirical investigations. In particular, special attention is given to the ability of organizations to reflect the selfreferential effects of PMS. A case study in the software development industry substantiates the concept.