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Author:Huikku, Jari. 
Title:Post-completion auditing of capital investments and organizational learning
Series:Acta Universitatis oeconomicae Helsingiensis. A, ISSN 1237-556X ; 347.
Series no:A-347
Year:2009  Thesis defence date: 2009-08-28
Electronic dissertation: » dissertation in pdf-format   [1311 KB]
Index terms:accounting; capital; johdon laskentatoimi; laskentatoimi; managerial accounting; MIS; oppiva organisaatio; organizational learning; pääoma
Abstract (eng):This doctoral dissertation investigates post-completion auditing (PCA) of capital investments and organizational learning (OL). The empirical data in this cross-sectional field study is primarily based on interviews conducted in the 30 largest Finnish manufacturing companies. The dissertation consists of an introduction and three articles covering different aspects of PCA and OL. The first article examines reasons for the non-adoption of PCA. It specifically analyses and maps alternate capital investment controls (ACICs) that enable evaluation of the success of an investment and the enhancement of OL and draws upon the concept of equifinality to discuss the role of ACICs in discouraging PCA adoption. Drawing on the concepts of cybernetic control systems, the second article assesses the significance of PCA in measuring performance and controlling current investments (assisting correction and abandonment decisions), enhancing the integrity of investment appraisals, and in evaluating personnel. Additionally, the paper examines the beneficial effects of PCA related to organizational learning. The third article investigates whether or not the design of PCA systems provides a platform for organizational learning. First, with the aid of Huber’s (1991) categorisation of OL constructs and the PCA literature, an OL-conducive PCA design was synthesised. It was then used as a benchmark for investigating PCA practices in the companies that were the focus of this study.

The results confirm prior literature that enhancing OL is the major reason for PCA and that the major perceived benefits of PCA are related to OL. The empirical evidence supports that the benefits that result from double-loop type learning which are related to future capital investments, are the major advantages of PCA, whereas PCA can be marginally beneficial in assisting problem detecting and solving (single-loop learning) for current investments. The findings of the study support the contention that PCA system sophistication can have an important role in facilitating (or hindering) OL. Specifically, organizational-memory-related aspects, such as adequate filing of PCA results and convenient access to them, can aid a company to effectively convey past investment experiences to new projects. Additionally, the results suggest that alternate capital investment controls (ACICs) can have a major role in explaining PCA practices in companies. The ACICs identified in this study include formal and informal systems and procedures specifically for performance measurement (e.g. following up production key figures, sales and profit centers) and OL (e.g. utilising central expertise and experienced internal resources). ACICs seem to diminish the relevance of PCA in companies and consequently affect the perceived importance of PCA adoption and PCA system sophistication. It is particularly smaller companies, companies that do not have a critical mass of investments, who may perceive ACICs as sufficient and do not adopt PCA. In a similar vein among the PCA adopters, the larger companies having a critical mass of major capital investments tend to have more sophisticated PCA designs, whereas the smaller companies appear to rely on less sophisticated PCA combined with ACICs.
Opponents:Järvenpää, Marko
University of Jyväskylä, Finland

Chairperson:Ikäheimo, Seppo