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Demonstrating Value: How Entrepreneurs Design New Accounting Methods to Justify Innovations

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  • Emily Barman
  • Matthew Hall
  • Yuval Millo

Abstract

An important activity of entrepreneurs is to justify the value of an innovation to gain support from stakeholders. We examine how entrepreneurs can develop an accounting methodology to demonstrate the value of a proposed innovation, focusing on the case of a charitable foundation’s promotion of social enterprise and its efforts to develop the accounting methodology of Social Return on Investment (SROI). We show how the process for designing new accounting methods that helps in demonstrating the value of innovations involves entrepreneurs (1) imagining the expectations of their stakeholders (2) putting in place the necessary infrastructure through which numbers can be generated and (3) iteratively reconfiguring the accounting methodology and the espoused value the innovation is expected to generate. Our study furthers understanding of the role of accounting numbers in the entrepreneurial process, particularly in situations where entrepreneurs seek to generate new accounting methodologies to develop persuasive stories about the benefits of their innovations.

Suggested Citation

  • Emily Barman & Matthew Hall & Yuval Millo, 2021. "Demonstrating Value: How Entrepreneurs Design New Accounting Methods to Justify Innovations," European Accounting Review, Taylor & Francis Journals, vol. 30(4), pages 675-704, August.
    • Handle: RePEc:taf:euract:v:30:y:2021:i:4:p:675-704
    DOI: 10.1080/09638180.2020.1770113
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    Cited by:

    1. Madlen Sobkowiak, 2023. "The making of imperfect indicators for biodiversity: A case study of UK biodiversity performance measurement," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 336-352, January.
    2. Palermo, Tommaso & Power, Michael & Ashby, Simon, 2022. "How accounting ends: self-undermining repetition in accounting lifecycles," LSE Research Online Documents on Economics 115278, London School of Economics and Political Science, LSE Library.

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