The interplay between calculative practices and eco-innovation: performativity and amplifying effects Open Access

This paper explores how calculative practices adapt to eco-innovation and actively shape its development by drawing on performativity theory. Calculative practices produce knowledge that supports the emergence of innovation while inviting scrutiny, reinterpretation and further experimentation (Mouritsen et al., 2009; Revellino and Mouritsen, 2015, 2017; Garud et al., 2018). This way, calculative practices suggest new directions and have the potential to amplify innovation (Revellino and Mouritsen, 2017; Yu and Huber, 2023). However, their performative capacity depends on their ability to translate the traces of innovation into calculable entities, producing different economic eyes and recreating them as engines anew (Revellino and Mouritsen, 2015). Traces are tangible and intangible manifestations of the innovation that are left behind as the innovation progresses (e.g. receipts of economic transactions and changes in customer behavior) (Revellino and Mouritsen, 2015). Power (2019, p. 117) describes traces as a “referent or sign” that point out movements or transformations of people and objects. Hence, traces are not simple markers of past actions; they are also productive of new presence and can, independently of the object they represent, create knowledge that shapes decisions and contributes to further transformation (Power, 2022). Incorporating traces of innovation into calculative practices is, therefore, essential for sustaining their performativity in shaping the development of innovation (MacKenzie, 2008; Revellino and Mouritsen, 2015).

Eco-innovation is an innovation that has the primary objective of reducing the environmental impact of businesses, including efforts to reduce emissions, minimize waste, enhance resource efficiency and promote material circulation throughout the lifecycle (Fussler and James, 1996; Kemp and Pearson, 2007). It extends beyond technological innovation, encompassing product, service, process and business model innovations (Fussler and James, 1996; Kemp and Pearson, 2007; Carrillo-Hermosilla et al., 2009). Eco-innovation initiatives suggest creating long-term value through the circulation of existing products and material and the efficient use of resources (e.g. energy and raw material). They, therefore, introduce substantial changes in business activities and practices, leaving traces that typically overflow traditional calculative frames (Callon, 1998), including for example changes in the offering, such as moving from the sales of products to the sales of performance.

Although research on eco-innovation has highlighted changes in activities and offerings (Bocken et al., 2016), supply chains (Bressanelli et al., 2019) and customer relationships (Mostaghel and Chirumalla, 2021), less attention has been paid to how the resulting traces influence calculative practices. At the same time, several studies have highlighted challenges in understanding the financial outcomes of eco-innovation (Agyemang et al., 2019; Kiefer et al., 2019; Guldmann and Huulgaard, 2020), calling for enabling financial tools that support the development of eco-innovation (Hojnik and Ruzzier, 2016; Guldmann and Huulgaard, 2020). While the performativity of calculative practices in shaping innovation has been a topic of discussion in accounting studies, there remains a gap in understanding the fate of traces and how they are selected and become part of calculative practices (Revellino and Mouritsen, 2015). Without understanding how traces of eco-innovation come to matter, it remains unclear how calculative practices adapt to eco-innovation, frame what is seen as valuable, and shape its development. Understanding these dynamics is, therefore, essential for advancing research on the performativity of calculative practices in emergent innovation contexts, including eco-innovation (Vosselman, 2022; Yu and Huber, 2023).

Against this backdrop, this paper aims to examine the performativity of calculative practices in shaping eco-innovation. More specifically, it investigates the traces left by eco-innovation and the ways in which these traces reshape calculative practices, empowering them to further shape eco-innovation. This way, it examines the performativity effect of calculative practices and how they are shaped by and shape eco-innovation. The paper is guided by the following research questions:

This paper contributes to the ongoing discussion about the performativity of accounting in shaping innovation (Revellino and Mouritsen, 2015; Vosselman, 2022; Yu and Huber, 2023). It examines the dynamic relationship between calculative practices and eco-innovation and advances the understanding of how calculative practices perform and shape the development of eco-innovation. This perspective is particularly relevant in contexts where the lack of suitable calculative tools has been identified as a barrier to the adoption and up-scaling of eco-innovation (Hojnik and Ruzzier, 2016; Kiefer et al., 2019; Guldmann and Huulgaard, 2020). Furthermore, the paper accentuates the amplifying effect of calculative practices in shaping eco-innovation.

The paper is structured as follows. Section 2 presents the theoretical background, followed by Section 3 where the empirical study and the applied methods for data collection and analysis are described. Section 4 presents the results, which are then further discussed in Section 5. The final section presents the conclusion of the study, its contributions and its limitations along with avenues for future research.

Innovation can be interpreted as a process through which new ideas are implemented (Davila, 2000; Davila et al., 2009; Chenhall and Moers, 2015; Barros and Ferreira, 2019). Innovation does not unfold randomly but through a manageable process, in which management control plays an important role (Barros and Ferreira, 2019) by reducing uncertainties and supporting decision making (Akroyd and Maguire, 2011). Over time, management accounting – as a set of calculative practices (Chenhall and Moers, 2015) – has evolved from being seen as a standalone technical function to becoming embedded within broader management control systems, systems that are shaped by – and responsive to – organizational strategy, structure and uncertainty (Barros and Ferreira, 2023). Hence, calculative practices are positioned as an important part of management control systems that do more than measure and monitor performance; they actively shape innovation and assist managers in its development and implementation (Miller, 2001; Chenhall and Moers, 2015; Revellino and Mouritsen, 2015).

Calculative practices, as described by Miller (2001), translate complex organizational processes into single financial values, thereby enabling the evaluation and control of activities. The set of calculative practices used for the management accounting and control in relation to innovation relies on the type of innovation, its magnitude and development (Barros and Ferreira, 2019). For instance, emergent innovations in technologies and business operations have spurred the evolution of new calculative practices that support the management of interdependencies through the value chain (Chenhall and Moers, 2015). These practices include, for example, target costing (Cooper and Slagmulder, 1999; Shank and Fisher, 1999; Ansari et al., 2006) and life cycle costing (LCC) (Parker, 1997; Korpi and Ala-Risku, 2008).

Target costing is an externally focused calculative practice where the price that customers accept to pay determines the target cost; hence, it is a customer-oriented way to define costs (Ansari et al., 2006). As opposed to cost-plus development of products, target costing, therefore, offers a proactive approach to cost management that suggests designing products and managing their costs based on customer input (Nicolini et al., 2000). The use of such practices tends to increase when organizations perceive greater environmental uncertainty and competitive pressure (Dekker and Smidt, 2003). Roy et al. (2005) showed that using target costing enables the control of costs and supports early stages of technology development. Pointing to its potential for supporting the development of innovation, Kato (1993) argued that target costs should aim for the life cycle costs as cost tradeoffs that may exist, for instance, between design and manufacturing and operational costs. Aligning with this perspective, Schmidt (2000) introduced life cycle target costs which proposes target costs for all costs through the different phases of the product lifecycle. More recent literature argues in a similar vein. Stadtherr and Wouters (2021) suggest that target costing can be used not only to support early stages of product development by addressing the manufacturing costs of individual products, but also to control broader cost elements related to product development and management, such as R&D expenditures and the costs associated with managing a portfolio of products. In addition, Baraldi and Strömsten (2024) suggest that implementing target costing allows steering innovative efforts and a better management of resources among stakeholders.

LCC aims to track and control the costs of products and/or services through their lifecycle (Korpi and Ala-Risku, 2008). As argued by Dunk (2004), LCC allows for an examination of products’ implications through their lifecycle and for the implementation of changes in product design to better meet customers’ expectations. The use of LCC, therefore, also encompasses the management of environmental impacts of products and is considered a variant of full costing that allows for integrating environmental related costs such as the cost of waste and asset circulation (Parker, 1997). Therefore, it is also increasingly used in relation to eco-innovations such as the development of circular business models and for the selection of circular activities (e.g. Bradley et al., 2018; Albuquerque et al., 2019) (discussed further in Section 2.3).

The emergence of new calculative practices, such as LCC and/or target costing, is pushed by innovation. As argued by Fried et al. (2017, p. 2), “innovation management and control are strongly challenged by the inherent characteristics of innovation.” Therefore, taking the specificities of the innovation into consideration is crucial for adapting calculative practices. Revellino and Mouritsen (2015) suggest that calculative practices adapt by integrating the traces left by the ongoing innovation process and that the accumulation of traces and their integration into calculative practices allow recreating the calculation engine anew for pushing the innovation further. Thereby, calculative practices are shaped and, in turn, shape the development of innovation (Revellino and Mouritsen, 2015, 2017, 2024). These traces, both tangible and intangible, are the artifacts that emerge as innovation unfolds. Power (2019) considers the preservation of traces as a form of memorizing which is the basis of knowledge creation. The integration of traces into calculative practices is enabled through a traceability process, closely aligned with what Power (2019) describes as “chainmaking”; the creation of accountability chains through the transformation and linking of inscriptions. While it is possible to view calculative practices themselves as traces when they have materialized in dashboards, reports or metrics (Power, 2019), this paper maintains a distinction between traces of innovation and calculative practices. In this paper, traces are defined as the outputs generated through the innovation processes, whereas calculative practices refer to the structured methods supporting their interpretation and use in management accounting and control.

The integration of innovation traces in calculative practices is an adaptation process through which calculative practices evolve to make the innovation visible and enable its management and control. Scholars have emphasized the dynamic, progressive and unpredictable character of this adaptation process (Quattrone and Hopper, 2001; Andon et al., 2007; Mouritsen et al., 2009; Melnyk et al., 2014; Revellino and Mouritsen, 2015). For instance, Melnyk et al. (2014) used the term “fit” to emphasize the progressive and responsive process through which performance measurement adapts to emerging innovations. Likewise, Quattrone and Hopper (2001) highlighted the nonlinear, cluttered and unpredictable character of accounting change. In line with this, they suggested replacing the concept of “changing” with “drifting.” In the context of accounting change, Andon et al. (2007) argued that the reframing of calculative practices occurred through relational drift, where people engage with accounting practices, experiments and improvise to make it aligned with the world it prescribes. Such a process is, in turn, described as messy, which should be considered in planning and control (Andon et al., 2007).

Eco-innovation is a particular type of innovation that suggests creating value while also reducing environmental impacts (Fussler and James, 1996). Eco-innovation initiatives may include the development or acquisition of new technologies, products and services, alongside the adoption of new practices such the reuse and recycling of products (Díaz-García et al., 2015). These initiatives may in turn differ both in scope and implications on business activities (Hellström, 2007; Carrillo-Hermosilla et al., 2009). Eco-innovation can also imply a shift in business models – altering the way companies create, deliver and capture value, for instance by moving towards circular business models, which is the case in this study. Circular business models are sustainable business models that create value by cycling products and resources and extending and intensifying their use (Geissdoerfer et al., 2020). Therefore, these models offer durable products designed for reuse, repair and upgrade, often bundled with services for extending their lifecycles (Bocken et al., 2016). Circular business models can also suggest creating value while dematerializing the offerings, shifting from selling products and services to selling their outcomes (Geissdoerfer et al., 2020). By introducing new ways for creating value, eco-innovation often implies significant changes in business activities, with direct implications for calculative practices (Guldmann and Huulgaard, 2020; Kanzari, 2022). Prior studies argued that eco-innovation needs to be supported by adapted calculative practices (Guldmann and Huulgaard, 2020) that make the implications of such initiatives visible and possible to act upon. Therefore, traces of eco-innovation need to be identified and integrated into a calculative frame that creates a space of action and discussion around the development of eco-innovation and its potential implications. This calls for a performativity perspective on calculative practices, to acknowledge and examine their active role in shaping eco-innovation.

From a performativity perspective, calculative practices are powerful tools that shape decision-making and redefine organizational reality (Vosselman, 2022). Numbers, far from being neutral, play an active role in modern societies (Rose, 1991; Miller, 2001; Mennicken and Espeland, 2019) and can function as both constraints and catalysts for organizational change (Ezzamel et al., 1997; Gurd, 2008; Guldmann and Huulgaard, 2020). Building on this view, accounting research has applied the concept of performativity to show how calculative practices – such as financial modelling – can shape markets (MacKenzie, 2008), organizational strategies (Jørgensen and Messner, 2010; Garud et al., 2018) and innovation (Revellino and Mouritsen, 2015, 2017, 2024).

The concept of performativity emerged with speech act theory, suggesting that language is not only a description of reality but also has the power to recreate it (Austin, 1962). In this vein, the idea of calculative practices as performative suggests that accounting and measurement systems not only represent economic transactions but also actively construct and shape the economic reality they are meant to reflect (Callon, 1998). They mediate and influence actions and actors, and change agencies within networks (Latour, 1986; Latour and Porter, 1993; Callon, 1998). Simply put, saying that accounting is performative means that it somehow constitutes reality and the world in which it operates (Vosselman, 2022). In essence, the performativity of accounting challenges the traditional view that accounting is a simple recording and a neutral representation of reality that exists prior to it (Miller, 2001; MacKenzie, 2008). Instead, it assumes that reality becomes visible through accounting practices and is in turn shaped by these practices. Accounting practice is thus seen as representation-as-creation rather than a representation of something or for someone (Rheinberger, 1992).

Although performativity has been a central theme in many accounting studies (Yu and Huber, 2023), there is a tendency to ignore its underlying mechanisms (Vosselman, 2022), why the performativity of accounting has been criticized for lacking proof to illustrate its foundations (Vosselman, 2014; Gond et al., 2016). Yu and Huber (2023) argued in their literature review that accounting is considered performative when it has a conforming effect, meaning it makes the world conform to its prescriptions, or an amplifying effect, which instead creates a new world. For instance, when financial models shape actions in line with their own predictions, they make the world conform to what they prescribe. The performativity of these models then has a conforming effect (Yu and Huber, 2023). However, as Callon (2007) argued, the external world is inherently unstable and marked by continuous overflows that disrupt existing calculative frames and generate new realities; as a result, the performative effect of calculation becomes amplified. Drawing on Callon (2010), scholars have shown that calculative practices operate in unstable environments characterized by overflows that necessitate continuous reframing, thereby multiply performative outcomes (Busco et al., 2018; Yu and Huber, 2023). Others have emphasized that the incompleteness and softness of accounting leave room for imagination and deviation, enabling accounting to generate alternative futures rather than closure (Boedker and Chua, 2013). Yu and Huber (2023) suggest that performativity is not either conforming or amplifying; rather, both can co-exist. They consider the incompleteness of accounting ^[1] as the condition under which the effect of performativity turns to amplifying.

Yu and Huber (2023) relate the effects of performativity to the process through which accounting becomes performative and identify two processes for building conditions of performativity. The first process tends to promote conformity through established accounting practices. As these practices become integrated into the organizational culture and widely accepted, they gain legitimacy and the power to shape the world in accordance with their prescriptions. This process corresponds to what Vosselman (2022) refers to as a self-fulfilling prophecy of accounting where performativity is generated through the repetition, routinization, and internalization of accounting practices. In Austin’s terms (1962),[link the year with Austin (1962) reference] this process may result in an illocutionary form of performativity, wherein the world is made to conform to the directives of calculative practices. For instance, a budget calculation that has gained legitimacy through routinization has the power to influence resource allocation as predicted. Illocutionary performativity, however, represents an ideal scenario in which felicity conditions, such as legitimacy and trust in calculations, are assumed to be met, and the realization of underlying intentions is anticipated (Austin, 1962; Vosselman, 2022; Yu and Huber, 2023). As such, it is often viewed as an endpoint or a destination (Vosselman, 2022).

Illocutionary performativity is considered a particular and temporary case of stability and is therefore an exception; not the rule (Garud and Gehman, 2019; Vosselman, 2022). As argued by Vosselman (2022), any alignment between accounting and reality is temporary and can be disrupted by various forces. In a similar vein, Butler (2010) argue that the performativity of calculative practices operates under “non-sovereign power” and thus depends on an evolving external reality. Accordingly, felicity conditions change over time and depend on context (Garud et al., 2018). As a result, calculative practices and models may not work as intended and produce effects that do not conform to what they predict. For example, when they do not satisfy felicity conditions and fail to lure people into taking action, or when they are contradicted by competing tools or calculations that are stronger than the one in question (MacKenzie, 2008; Mouritsen et al., 2009). In response to such breakdowns, calculative practices are readjusted to build felicity conditions and regain power (Themsen and Skærbæk, 2018). This corresponds to the second process for building conditions of performativity identified by Yu and Huber (2023) – perlocutionary performativity – where the incompleteness of accounting leads to its continuous reframing, providing a space where decision-makers can transform the current world into a new one (MacKenzie, 2008; Boedker et al., 2020). When the performativity of accounting is perlocutionary (i.e. relying on prerequisites), it depicts an ongoing journey through which calculative practices are constantly reframed in light of a changing world. Thereby, perlocutionary performativity tends to amplify the world by displacing and multiplying it. Both displacing and multiplying effects of accounting performativity can be understood through the lens of overflowing frames (Callon, 1998; Yu and Huber, 2023). When accounting frames overflow – due to incompleteness, contestation or absence – they can either displace the existing world with a new one or multiply realities by enabling the coexistence of several worlds or logics (Yu and Huber, 2023). Yu and Huber (2023) argue that the amplifying effect is triggered by the incompleteness of accounting, where absence allows imagination that, in turn, displaces and multiplies the world. Revellino and Mouritsen (2017) and Busco et al. (2018) explain that incompleteness generates “performable spaces” (Revellino and Mouritsen, 2017, p. 449), enacting new realities. In the same vein, Ezzamel et al. (2012) illustrates how incomplete financial budgets leave space for new practices and roles to emerge. Since not all dimensions of reality or organizational performance can be readily quantified or reduced to numerical data (Mennicken and Espeland, 2019), the likelihood of accounting being incomplete is more evident. It might hence be more realistic to view perlocutionary performativity as an ongoing journey primarily aimed at building rather than capturing a reality that may not be fully possible to capture.

Consequently, as illustrated in Table 1, calculative practices can have a perlocutionary performativity through a continuous process of reframing, which amplifies their effects by displacing or multiplying reality. They can also develop illocutionary performativity through routinization, resulting in a conforming effect where the world is made to align with the prescriptions of established accounting practices.

This research is based on an action case study. Studying the performativity of calculative practices in shaping eco-innovation requires active collaboration with practitioners to capture changes in calculative practices and eco-innovations, which are difficult to backtrack in a “conventional” case study. In essence, action case studies combine understanding and action to comprehend a studied phenomenon in its natural setting and for intervention in solving real-life problems by implementing small-scale changes (Ottosson and Björk, 2004). By suggesting intervention, action case studies have similar traits as interventionist research (cf. Jönsson and Lukka, 2006; Dumay and Baard, 2017), which in turn has been called for in management accounting literature for examining accounting in action and for investigating the role of accounting for organizational change (Ahrens et al., 2008; Cullen et al., 2013). However, what differs action case studies from interventionist studies is that it balances understanding and intervention (Vidgen and Braa, 1997). Additionally, the degree of the intervention for action case studies typically involves “modest interventions” (Vidgen and Braa, 1997; Jönsson, 1999). For this study, the degree of intervention in particular situates it more towards an action case study than the interventionist approach. The “action” element of this case study refers to the collaborative development of an LCC model, where we established the calculative frame and adjusted it based on insights from interviews and workshops, following the development of the eco-innovation. This is described further in Section 3.2.

In this study, we engaged with managers of an original equipment manufacturer at various stages of an eco-innovation process and actively participated in its development as well as in the development of calculative practices. The case company was a Swedish global company with several business areas within transportation, heavy machinery, equipment and energy. The company has over 100,000 employees globally and production sites all over the world. Our engagement with the case company was limited to one of the business areas involved in heavy machinery products and solutions, with clients in, for example, building, construction or mining. Products include, for example, excavators and wheel loaders. We, therefore, denote the company as the Heavy Machinery Company (henceforth HMC), due to anonymity.

HMC was, at the time of the study, a part of a research project that aimed to support the electrification of medium and heavy machinery. The research project was an externally funded collaborative project between HMC and other companies, including customers of HMC. HMC was a first mover in the electrification of work machines and equipment and had additionally undergone a service-based circular business model innovation alongside its electrification initiative. Vehicle electrification often necessitates the development of different skills and knowledge compared to conventional technologies (Wesseling et al., 2015; Idjis and Da Costa, 2017). Similarly, transitioning to a service-based business model implies significant changes in value dimensions (value creation, proposition and capture) and business activities, processes and offerings (Hellström, 2007; Snyder et al., 2016). Therefore, the HMC case provided a valuable opportunity to examine the development of eco-innovation initiatives and to investigate how calculative practices evolved and influenced the eco-innovation trajectory.

The action case study was conducted over two years, lasting from fall 2021 to fall 2023. Hence, while the study may not qualify as a longitudinal study spanning several years, we followed HMC and their eco-innovation process throughout different stages, including designing, experimenting and implementing eco-innovative initiatives. The action study included the following three iterative phases (Halecker, 2015): understanding, action, and refinement and development. Iteration between these phases enabled a reflective research process that is at the core of action research (Fogarty, 2017). Data collection and analysis took place iteratively throughout these three phases. The understanding phases of the study were primarily concerned with collecting data about eco-innovation and its subsequent traces. The action phases concerned the development of calculative practices in light of the traces produced by the evolving eco-innovation initiatives. The developed calculative practices were subsequently refined in the refinement and development phases to allow simulations and ideations. As illustrated in Figure 1, iterations between the three phases shaped the development of the eco-innovation which evolved from electrification to business model innovation and further to technological innovations. At the same time, the development of the eco-innovation required adjustments in the calculative practices which triggered iterations between understanding, action and refinement.

During the action case study, various data collection methods were used iteratively, including a site visit, project meetings, semi-structured interviews and workshops (two face-to-face and seven online). The site visit, semi-structured interviews and project meetings were part of the understanding phase while workshops were part of the action, refinement and development phases. Details of the data collection are presented in Table 2. The collaboration with HMC started with project meetings held regularly by HMC to discuss progress on eco-innovation initiatives, from September 2021 to November 2023 (Table 2). These meetings involved managers from HMC and external partners such as customers and researchers and provided us with insights into the development of eco-innovation initiatives and the related challenges and opportunities. The project meetings were not recorded but detailed notes were taken. Following the project meetings (understanding), the first workshops (action) took place online in November 2021 and January 2022, aiming to start discussing the parameters and setting the system boundaries, to prepare for the framing the financial model for assessing the financial performance of electrification. A site visit was then organized to familiarize ourselves with the product object of the eco-innovation.

Semi-structured interviews (understanding) were then conducted to capture participants’ perspectives on how developments of eco-innovation affected the company’s activities and costs. The interviews followed a flexible interview guide, adapting questions to participants’ roles while ensuring coverage of core topics such as battery capacity, lifecycle and costs. This allowed us to capture role-specific insights while maintaining consistency through a shared set of guiding topics across all interviews. Key participants were identified based on their involvement in the eco-innovation initiatives and their expertise, both from the project meetings and via a snowballing approach from the interviews and workshops. Theoretical saturation was considered achieved when no new insights emerged during interviews or workshops that would affect adjustments to the LCC model.

In the interviews, the participants shared their views on how these implications could be accounted for and what assumptions were necessary for forecasting costs. In other words, the interviews provided insights into eco-innovation traces and how these could be integrated into the financial model, i.e., calculative practices (Table 2). All interviews were recorded and transcribed and complemented with notes. We adjusted the model based on insights gained from interviews and discussed the adjustments made in workshops (action) that were conducted in iterations with the interviews. In addition, during interviews, workshops and project meetings, participants shared updates on eco-innovations that indicated how calculative practices, in turn, shaped those innovations.

As the eco-innovation progressed, and following experiments from a pilot project conducted by HMC, the LCC model was adjusted and simulations were performed during the refinement and adjustment phases, which took place between February 2022 and October 2023. In these workshops, calculations were refined based on emergent data from the pilot project and participants’ inputs from the interviews. Various scenarios were also simulated for further development of the eco-innovation. Our role in these workshops was thus to co-create the financial model, in this case LCC, without taking a central position in decisions on what should or should not be included in the models. For all workshops, the discussions were documented (e.g. in excel models and notes) and reviewed by the researchers afterwards. The online workshops were recorded, which also enabled us to go back and review the material when needed. Additional material from meetings and workshops included power point presentations and meeting minutes shared by other participants (e.g. the project manager of HMC).

The transcripts and notes were analyzed drawing upon a thematic analysis (Clarke and Braun, 2006; Terry et al., 2017) to build an understanding of how calculative practices adapted to eco-innovation and how, in turn, these practices shaped eco-innovation. The thematic analysis enabled a structured approach that involved examining the data set to identify patterns generating codes and constructing themes for answering the researched phenomenon (Clarke and Braun, 2006). The analysis resulted in 15 codes that were gathered under eight themes, which highlighted both the impact of eco-innovation on calculative practices and the impact of calculative practices on eco-innovation. A presentation of all the themes and codes is provided in Appendix Table A1. To ensure reliability when interpreting the data (Alvesson, 2011), the data analysis and development of the model were performed by two of the authors of this paper and was also discussed with the participants in the workshops.

This empirical section examines the development of HMC eco-innovation, highlights the traces it generates and analyzes how these traces are integrated into calculative practices. The section is structured around a series of cycles that capture the co-evolution of calculative practices and eco-innovation to illustrate the performativity effects of calculative practices on shaping eco-innovation.

HMC’s eco-innovation journey was initiated by the electrification of its heavy machinery. While this was a technological shift, it triggered process innovation and diversification in the company’s offering. Initially, in its experimental phase, production volume was low and the production of electric equipment was labor-intensive and took place at a few stations in the factory. The design of electric equipment was similar to that of conventional diesel equipment, except for the powertrain. Instead of diesel engines, electric machines used lithium-ion batteries for propulsion. Integrating these batteries added complexity to the assembling process, requiring careful handling and extra safety measures.

To ensure proper operation, customers needed charging solutions and supporting infrastructure. This pushed HMC to expand beyond offering solely the electric equipment and to create integrated systems that combined the electric equipment with charging and energy storage units for off-grid sites. As a result, the eco-innovation introduced a shift in value creation: HMC now sold integrated asset bundles, which changed both the sales process and after-sales services, since both had to support the operation of the full system.

This change in HMC’s operations challenged the existing frame of calculative practices; The costing system performed a narrow economic reality that obscured the integrated system’s broader financial performance. In project meetings, managers raised a concern that the existing costing information constrained the possibility of actions, noting that pricing and design decisions relied on insight into the financial outcomes of the integrated system as a whole. In this way, the misalignment between existing calculative practices and the new reality of value creation triggered an adjustment in the calculative frame.

The sale of an integrated system thus generated traces that overflowed the existing full costing frame and required adjustments, which was the subject of the first workshop. These traces were related to the development or acquisition of the different assets integrated into the offering and their delivery and impacted costs for sales, installation and after-sales management. Reframing the traditional full costing by integrating these traces reshaped the cost structure, raising overhead expenses and the cost of goods sold. The increase stemmed from the labor-intensive, multi-station assembly and from the additional management, handling and safety requirements associated with the batteries, which raised both direct and percentage-based overhead allocations, as illustrated in the quote below:

While the increase in demand and the shift to line production would reduce the labor costs and overheads, these changes would have only a limited impact on total costs. Managers expected that the overall expenses would remain high due to the substantial cost of lithium-ion batteries and the additional safety measures required for battery integration and management. Integrating traces of short- and long-term developments into calculative practices translated into high prices for customers, maintaining required margins. Illustrating illocutionary performativity, the prices set by HMC for the sales of the integrated system were set to conform to the pricing calculations made in the workshops. However, the conforming effect of calculative practices was temporary as managers shared worries about marketing the electric solution at such high prices, foreseeing potential barriers for acceptance. The high pricing generated questions about the existing business model and the possibilities it offers in terms of pricing. The Head of Business Control for Service and Solutions explained this as follows:

Despite benefiting from a governmental subsidy, prices remained high and the traditional sales business model did not allow for pricing alternatives. This led to the first amplifying cycle.

By revealing pricing barriers, calculative practices did not only describe market constraints, but they also generated unpredictable effects that moved beyond our expectations. The traditional full costing destabilized established value creation logics by uncovering the limitation traditional sales pose for electrification. This led to reorienting organizational understandings of what eco-innovation should be, steering the eco-innovation trajectory towards changes in the value creation logic and in the business model. As such, calculative practices shaped a new environmental initiative, multiplying the eco-innovation to electrification and business model innovation. To ideate about possible business model alternatives, we engaged in workshops for ideation and design of a new business model, where managers discussed possibilities of servitization: considering offering the electric solution as a service or implementing a take-back and resale option. Calculative practices thus generated an unpredictable effect that extended beyond shaping the eco-innovation, actively performing a new “identity” for the company in which HMC began to operate as a service provider.

We engaged in workshop discussions about the potential implications of the different business model designs. While some managers argued that the take-back and resale option involved lower risks in battery management, others raised concerns about flexible pricing and the predictability of residual value. We also shared concerns about the high initial pricing, which will remain a potential barrier to traditional sales. Thereafter, HMC decided to experiment with a service-based circular business model in which the company would retain ownership and offer electric solutions as-a-service in exchange for monthly fees. As motivated by managers in project meetings and workshops, this direction would allow flexible pricing and facilitate the control of assets and lifecycle costs. Despite this potential, some managers perceived high risks in retaining ownership. A financial assessment became necessary for making the financial implications of such a business model shift visible and for shaping how risks and opportunities were understood and managed.

However, the implications of service-based circular business model overflowed the existing full-costing frame. This latter was framed to make only the short-term implications of the business model visible. It relied on historical data and thus failed to support experimentation and to reduce uncertainties about the long-term implications of retained ownership and the sale of performance. Adapting the calculative frame was therefore necessary, especially as HMC began prototyping and discussing early design ideas with customers – activities that generated traces the existing cost frame was unable to capture. This prompted HMC to set up workshops dedicated to redesigning the calculative frame. At this stage, interviews were conducted in parallel to understand the implications of the service-based business model and to identify the emerging traces it produced.

The service-based circular business model redefined how HMC created value for their customers, moving from the sale of products to the delivery of performance – that is, the transported load an electric equipment can transport per hour. Such shift in value creation left behind traces that reflected changes in obligations and risk distribution. By committing to a certain performance delivery, HMC assumed the obligation to ensure that this performance was delivered and maintained throughout the contract period. Contract obligations and pricing were no longer related to the value of the physical assets but to the contracted performance HMC was committed to deliver to customers over a period of time. To meet performance commitments, HMC had to consider different configurations of an integrated system, bundling electric equipment, chargers and energy storage units to adapt to customers’ workload intensity and site conditions. They retained ownership of the bundled assets and assumed responsibility for their lifecycle management and operational risks. New services were also integrated into the offering for ensuring the delivery of performance, including installation, training, maintenance and monitoring. Furthermore, solutions for overcoming operational risks, such as emergent replacement in case of failure, had to be considered for the availability guarantee. As retaining assets’ ownership allowed the reuse of equipment, HMC estimated that it would be possible to have several performance based contracts throughout an electric equipment lifecycle. This meant that each new use cycle required a refurbishment of equipment, alongside initial installation, training, and administrative work involved in setting up contracts.

The shift in value creation also had implications on the value chain, as illustrated in the following quote:

To deliver on the service-based circular business model, HMC needed to have closer relationships with their customers, which pushed for vertical integration and the establishment of direct communication channels. This strategic shift repositioned HMC as responsible for both direct sales and after-sales services. In this way, the performativity of pricing flexibility did more than changing HMC positioning – to a service provider – but also redistributed roles in their network. The redistribution of roles and responsibilities was more than a restructuring of operational workflows; it generated organizational traces that had to be accounted for. As HMC increasingly relied on dealers’ expertise to develop its internal service capabilities, maintaining dealer motivation became essential. This was particularly important because dealers had previously earned commissions on the sales of electric equipment, in addition to fees for the services they provided. To address this shift, HMC decided to compensate dealers for the lost sales commissions while also paying the market rate for the services performed on HMC’s behalf. These changes reflected a broader transformation in how value became distributed through the value chain, requiring new arrangements for aligning incentives and responsibilities. This way, the changes in value creation suggested by the amplified eco-innovation generated traces that had to be considered in the reframing of calculative practices.

The integration of the traces of shift to service-based circular business model led to a drift of the traditional full costing frame. Reframing calculative practices was thus more than a technical task, it required a redefinition of how value is created within HMC, challenging long standing structures:

As argued in the quote, the change in the logic of value creation challenged institutional structures and required a change in measurement logic. A more proactive costing technique was needed for tracking and managing cash flows throughout the assets’ lifecycles:

Experimentation with calculative practices and cost structures triggered a shift from full costing to LCC. The development of the LCC model was iterative, and it underwent several refinements through collaborative work between the research team and managers at HMC. The iterative development enhanced the tool’s capacity to reflect the new business model reality and progressively built trust in the LCC calculation. This empowered its performativity as the LCC became progressively the frame of reference that represented the new business model and enacted it.

Unlike conventional LCC approaches that typically focus on individual products (EPA, 1995), the LCC frame integrated lifecycle costs of all assets that could be bundled within the offering, shaping the management of a system rather than a single asset. The calculative frame was thus made sensitive to the different lifecycles of the assets, such as batteries. This flexibility enabled the assessment of the cost implications of various asset bundles, providing a basis both for asset management and for agreements with customers. In this way, the LCC model became not just a financial tool, it actively participated in shaping how value was created and managed across the assets’ lifecycle.

To allow acting on lifecycle implications, the outflows included the costs paid by HMC for providing services as well as financial and insurance costs incurred in retaining assets ownership. To enact the availability obligation, an availability cost was integrated into the calculative frame based on an estimate of the expense associated with immediate asset replacement. This made the contractual availability commitment financially visible and manageable. The number of asset usage cycles, thus how many performance-based contracts can be placed through the electric equipment lifecycle, was not predefined but emerged through calculation; when the service costs of extending a contract exceeded the expected financial gains, assets were retired, and their residual value was estimated based on recoverable materials. The LCC model thus exhibited performativity by shaping end-of-lifecycle decisions and determining when and how reuse was financially viable.

As value was created through a constant delivery of performance, rental fees were integrated as yearly inflows. The service-based circular business model offered pricing flexibility as payments became linked to the delivered value rather than upfront asset costs, allowing prices to be adjusted according to customer-perceived value and usage intensity. Thus, rental fees were estimated through an assessment of customer willingness to pay, thereby linking pricing to perceived value and market demand. As shared by participants, customers perceived values beyond the performance of the electric solution:

While this shift in pricing appeared to stem simply from the change in value-creation logic, it in fact reflected a deeper transformation in how LCC shaped the perception and management of value, costs and risks. By framing eco-innovation as a solution that delivers performance, LCC raised the need to control long-term costs in a way that sustains and enhances performance delivery. This need altered the logic of cost management. Pricing based on market demand and value perception, therefore, enacted a shift in cost management practices, moving from a traditional cost-plus margin approach to target costing. As explained in the quote below:

Aligning lifecycle costs with performance-based pricing signaled a reframing of the relationship between value creation and cost management, positioning calculative practices as a frame for risk management rather than risk representation. Within this framing, target costing and LCC did not simply forecast expenditures; they shaped the future by controlling long-term activities related to use, operation and disposal. This perspective was also emphasized by the Head of Assets as Service, who added that controlling long-term operational costs and having effective strategies for asset disposal are the way for risk management – as important as setting the right prices. This points to the performativity of calculative practices in enacting risk management. It was further explained:

Combining target costing with lifecycle costing reduced tensions around the risks and uncertainties that some managers perceived in the service-based circular business model. In this way, it was progressively legitimized and facilitated alignment between differing perspectives, supporting constructive interactions among managers. Demonstrating illocutionary performativity, HMC formalized its first agreement to offer electric solutions as a service aligning it with the assumptions and structure of the LCC frame. The LCC’s target-costing logic guided the design of the offering, where fees were set to meet lifecycle cost targets, and contractual obligations were shaped by the cost thresholds and risk management strategy identified in the model.

The performativity of the LCC calculative frame extended beyond its illocutionary manifestation, as it also steered actions towards specific areas to further control costs and create value, producing perlocutionary effects. Comparing actual lifecycle costs to the target cost threshold, positioned battery management as major cost driver, especially in high-duty scenarios that necessitated frequent battery replacements, accounting for 45% of the total operational costs. By revealing a high battery management cost, LCC triggered a new drift in the eco-innovation trajectory, opening space for rethinking the battery lifecycle and potential reuse. Possibilities for battery refurbishment were a recurring topic of discussion in project meetings. The Head of Electric Solution Sales argued that refurbishing batteries was consistent with HMC’s environmental initiatives and could offer potential to reduce battery purchase costs. As such, LCC triggered a new amplifying cycle, adding refurbishment activities to the electrification and service-based circular business models. Mobilizing this initiative required establishing new network ties, triggering new relationships and adjustments across the value chain. Following negotiations, the Head of Electric Solution Sales reported in a project meeting that HMC had decided to partner with a third-party provider that would refurbish batteries at a lower cost than purchasing new batteries (70% of new battery cost). Meanwhile, battery replacement was maintained, showcasing a temporary conforming effect of performativity. Although it shaped the current agreements with customers, this stability was fragile and open to perlocutionary change.

Introducing battery refurbishment produced traces that had to be integrated into the LCC model to make the implications of such an initiative visible and possible to control. The refurbishment required logistics for taking back batteries and managing its refurbishment with the third-party provider. Integrating the refurbishment initiative traces resulted in an adjustment of the LCC calculative frame; new battery costs were replaced with the costs of refurbished batteries.

After adjusting the LCC, lifecycle target cost analysis indicated that battery refurbishment would slightly improve the internal rate of returns (IRR). Thus, calculative practices again positioned battery costs as a burden, signaling that further actions should be taken to control them. The perlocutionary chain of action thus triggered a third amplifying cycle.

The persistently high battery costs directed attention to areas that were already subject to scrutiny. As electric batteries presented a new technology that was developing, HMC was investing in R&D to have the capacity to adopt new battery technologies. While this was an ongoing effort and part of future possible development, LCC calculation made it a priority. In interviews with the Head of Electric Solution Sales, we learned that HMC set a time plan for launching a new battery technology. As clarified by one of the managers, in a workshop:

The Head of Electric Solution Sales added that R&D work in battery technologies had also opened up for the possibility of upgrading electric equipment as well:

However, as the LCC calculation narrowed the focus to addressing battery costs, the R&D efforts focused mainly on the development of the next generation of batteries, since diverting attention to equipment upgrade risked delaying their emergence. In this way, calculative practices are performed by prioritizing activities and narrowing focused efforts. While upgrading the new battery technology, HMC would continue to offer electric solutions with the initial battery technology, establishing contracts that conform to LCC predictions.

The new battery technology was expected to offer higher energy storage capacity and, therefore, a longer lifetime. Despite this technological change, HMC did not anticipate reductions in the initial cost of batteries or electric equipment. However, the increased storage capacity reframed lifecycle expectations. In light or medium-duty applications, the new battery generation was expected to last for the entire equipment lifecycle without replacement and could even be reused shortly in other equipment before retirement. Integrating these traces for making the implications of new battery generation visible meant assuming longer battery lifecycles, excluding cash outflows for replacement, and assigning higher residual values to retired batteries in light- and medium-duty applications. In heavy-duty applications, replacement and refurbishment of batteries were still required. The traces of improved battery capacity also translated into a reduced need for charging solutions, ultimately leading to lower costs.

These cost reductions were not automatically absorbed into pricing, as prices were decoupled from costs. Instead, target costing provided a buffer that allowed HMC to absorb cost fluctuations without adjusting prices, ensuring flexibility in resource allocation and responsiveness to market conditions.

Consequently, the LCC calculations revealed better financial performance with the new battery generation, showing an improved IRR. Although decreased, LCC calculation revealed that the cost of battery management was still the most important cost in heavy duty application. For low and medium-duty applications, the LCC calculation shifted the focus to the cost of maintaining and refurbishing the electric equipment, which then became the most important cost driver. As such the perlocutionary effect continued, inviting further drifts and multiplications of the eco-innovation initiatives. In our final workshop, future actions were planned to focus on further advancements in battery technology and on the upgrade of the electric equipment, an initiative that was previously delayed.

The development of HMC’s eco-innovation was thus a journey shaped by calculative practices in three amplification cycles. The interplay between the calculative practices and the eco-innovation development at HMC is presented in Table 3.

This section discusses the traces of innovation that challenged the framing of calculative practices and discusses how their integration extended the boundaries of calculative practices, recreating their performativity in shaping eco-innovation. Then, the amplifying effect of the reframed calculative practices on eco-innovation is discussed, highlighting their perlocutionary and illocutionary performativity.

In line with prior studies (Fussler and James, 1996; Geissdoerfer et al., 2020), the empirical study shows that eco-innovation introduced new ways of creating value and challenged existing calculative practices. HMC’s eco-innovation involved a transition from creating value through the sale of assets to creating value through the sale of an integrated system performance – and later through battery refurbishment and technological advances. The traces of these shifts in value creation challenged the existing calculative frame and urged a redefinition of the scope and parameters through which value was recognized and assessed. These traces related not only to changes in the company’s activities, but also to its obligations, positioning in the value chain, and relationships with different stakeholders in the value chain. For instance, by retaining ownership and offering access to performance, HMC became responsible for the operation and performance of assets throughout their lifecycles. This introduced new contractual obligations and required understanding and controlling of lifecycle costs. Echoing Guldmann and Huulgaard (2020), this new logic of value creation was challenged by the narrow scope of full costing. Additionally, HMC’s positioning as a service provider enabled greater flexibility in managing assets across their lifecycle and opened opportunities for reuse. However, the full-costing approach was poorly suited to simulations and to guiding reuse decisions. Consequently, while calculative practices were intended to control the eco-innovation, the shift in value creation it suggested left traces that “secretly crossed the frame’s boundaries” Callon (1998, p. 9) and disrupted its alignment with organizational reality.

Building on Revellino and Mouritsen (2015), adapting calculative practices in this case required the integration of traces of the shift in value creation suggested by eco-innovation. Rather than serving solely as retrospective inputs for reflective modeling, these traces shaped the conditions under which calculative practices can act as engine of eco-innovation. The identification of traces was enabled by traceability (Power, 2019) embedded in the new arrangements with customers and partners. For example, the change in dealer compensation was a trace of change in HMC’s identity and evolving customer relationships. The inclusion of availability costs was a trace of commitment to performance delivery. Traceability was thus as Power (2019) described a process of chain making that allowed tracking changes in responsibilities, relationships and objects. As Quattrone and Hopper (2001) suggested, integrating these traces into calculative practices was experimental, involving both researchers and practitioners in a progressive adjustment that has no clear destination at the outset.

The integration of traces of shifts in value creation progressively extended the boundaries of calculative practices, reflecting new ways of conceiving and measuring value. Building on Revellino and Mouritsen (2015), this study suggests that calculative practices may adapt through marginal change but can also undergo broader reconfiguration. Capturing the financial implications of long-term value creation and retained ownership involved a first fundamental change in costing techniques – shifting calculations from retrospective and short-term assessment to prospective and long-term ones. This resulted in a transition from traditional full costing to LCC. This shift aligns with prior studies that suggested a full costing method, including LCC, for the financial performance measurement of environment strategies (Parker, 1997; Albuquerque et al., 2019; Kambanou and Sakao, 2020). Alongside this shift, incremental yet consequential adjustments were introduced at the LCC margin (Miller, 1998). First, integrating traces of the shift from assets sales to the delivery of performance triggered changes in the cost object, which moved from individual assets or integrated systems to a flexible offering – a bundle of assets and services that ensures performance delivery. Second, performance delivery introduced new cost categories, such as availability costs, to account for newly assumed obligations. Third, asset reuse suggested introducing costing cycles within LCC to capture the cost implications of circular activities. Finally, improved battery technology required reconsidering the battery cycles. As such, the integration of traces was enabled by the flexibility of the LCC boundaries, allowing expansion or contraction in response to emerging traces.

A second fundamental change emerged from maintained ownership, which opened possibilities for managing lifecycle trade-offs. This shift did more than adjust costing techniques – it redefined pricing and cost management logic. In line with Kato (1993), the need to manage lifecycle trade-offs triggered a shift to target costing. Moving from cost-plus calculation to target costing could be explained by the high uncertainties (Dekker and Smidt, 2003) introduced by eco-innovation. This change marked a decisive break in pricing and cost management practices and signaled a proactive approach to managing cost and risk over time. While prior studies highlighted challenges in implementing lifecycle target costing in cultures prioritizing initial capital costs (Nicolini et al., 2000), this study shows that eco-innovation can create conditions where such an approach thrives. By creating long-term value and redistributing operational risk, eco-innovation pressed the need for managing cost and risk over time. This finding addresses a barrier identified by prior studies (e.g. Linder and Williander, 2017) regarding uncertainties in long-term returns of service-based circular business models, suggesting target costing for proactive cost control.

Ultimately, in line with Revellino and Mouritsen (2015) and Yu and Huber (2023), the results illustrate that reframing calculative practices was a condition for recreating the performative engine. As Yu and Huber (2023) argued, accounting flexibility supports such development, allowing for both fundamental as well as incremental changes.

The results illustrated three amplifying cycles through which calculative practices actively multiplied eco-innovation initiatives. These cycles involved (1) the extension of electrification into business model innovation, (2) the additional integration of circular activities (refurbishment of batteries) and (3) technological innovation. Adding to Yu and Huber (2023), the results suggest that amplification varies with the depth of changes in value creation introduced by the innovation. While all three cycles redefined how HMC created value, their impact differed (Figure 2). The first amplifying cycle represented a major business shift, altering HMC’s identity (Revellino and Mouritsen, 2015) and logic of value creation. This significant change left traces that triggered fundamental changes in calculative practices – moving from traditional full costing and cost-plus pricing towards LCC and target costing. The second and third amplifying cycles, however, introduced incremental changes in the service-based business model, impacting calculative practices only at the margin. This distinction adds nuance to existing literature by showing that the performativity of calculative practices varies with the scale of innovation, extending Yu and Huber (2023) argument on amplification.

Beyond structural changes, the findings reveal the mechanism behind amplification: an ongoing performativity journey (Garud et al., 2018; Garud and Gehman, 2019) where constant reframing made eco-innovation implications visible and reduced uncertainty, enabling actors to imagine and act on future scenarios (Beckert and Bronk, 2018). Practices such as lifecycle target costing provided provisional confidence about long-term implications, gaining legitimacy and trust as they aligned decision-makers around shared frames of reference and expectations. This provisional confidence did not stem from calculative completeness, but from the productive incompleteness of lifecycle calculations, which, in line with Boedker and Chua (2013), left room for deviation. Performativity of calculative practices was therefore mostly perlocutionary – meaning that it produced effects beyond presentation, shaping how people responded and acted (Austin, 1962). In line with Vosselman (2022), this effect made eco-innovation travel beyond the calculative mind. By developing knowledge about cost burdens, calculative practices attracted decision-makers to actions in specific areas (Revellino and Mouritsen, 2015). Then, by allowing simulation and experimentation, they created space for actions and enticed decision-makers to prioritize interventions and accelerate innovation efforts. In this sense, they generated effects that brought about the conditions of successful action – what Austin (1962) might consider as felicity conditions. For instance, pricing barriers highlighted by full costing steered the adoption of a service-based business model; later, LCC calculations focused attention on battery management, triggering remanufacturing initiatives; and persistent battery costs pushed R&D toward technological advances. In this way, calculative practices acted as “ex-citable devices” (Butler, 1997; Revellino and Mouritsen, 2017), creating drifts in the eco-innovation trajectory while pointing to potential destinations. In line with prior studies (Boedker and Chua, 2013; Revellino and Mouritsen, 2017; Busco et al., 2018), the incompleteness and flexibility of LCC opened performable spaces and amplified eco-innovation initiatives by allowing imagination and enabling experimentation.

While performativity was mostly perlocutionary – producing effects that amplified eco-innovation – instances of illocutions also emerged, creating temporary stabilizing effects that made outcomes conform to calculations (Yu and Huber, 2023). As observed in the HMC case, the sale price of integrated systems was set conforming to the full costing calculations. Likewise, the first agreement for offering electric solutions as a service aligned with the assumptions and structure of the LCC frame. Specifically, battery replacement timing and cost were conformed to the LCC simulation before implementing remanufacturing and new battery technology. These conforming effects signaled alignment between calculative practices and eco-innovation, but this alignment was fragile (Garud and Gehman, 2019; Vosselman, 2022) and temporary, as amplifying effects continued to unfold. In other terms, the LCC frame acted both as a stabilizing device that disciplined early innovation manifestations and as a generative device through which eco-innovation continued to expand. By temporarily stabilizing eco-innovation, conforming effects revealed changes in value creation that produced traces overflowing the initial calculative frame. Incorporating these traces required reframing calculative practices (Callon, 1998) which opened new spaces for action, triggering multiple eco-innovation initiatives to emerge. In this way, calculative practices not only adapted to the iterative and dynamic nature of the innovation but also enabled and shaped it.

Consequently, as presented in Figure 2, the conforming effect gives a temporary shape to eco-innovation. This latter suggests changes in value creation, generating traces that overflow the initial calculative frame. The integration of these traces leads to a reframing of calculative practices that redefine boundaries and create new spaces of action, triggering the emergence of multiple eco-innovation initiatives. Our findings thus illustrate the interplay between illocutionary and perlocutionary performativity. While illocutions temporarily disciplined eco-innovation within existing frames (e.g. price setting and LCC-based agreements), perlocutions created drifts that overflowed boundaries, generating new spaces for action and amplifying innovation. This dual role challenges linear views of performativity and highlights its iterative and dynamic nature.

The purpose of this paper was to examine the performativity of calculative practices in shaping eco-innovation. First, it investigated how traces of eco-innovation reshaped calculative practices. Second, the paper investigated how calculative practices generate performativity and, in turn, shape eco-innovation. The empirical investigation was based on an action case study through which the authors of this paper collaborated with practitioners in developing and reframing calculative practices and observed how these shaped the development of an eco-innovation. The results suggest that eco-innovations generate traces of changes in value creation that redefine the concept of value and require a reframing of calculative practices. The integration of these traces reshapes the boundaries of calculative practices, which shift from retrospective, cost-based assessment to prospective value-based assessment and from traditional cost-plus pricing to customer-oriented target costing. Reframed calculative practices can produce illocutionary conforming effects, structuring early eco-innovation manifestations. However, by providing a frame for action, these practices define performative spaces, suggesting the multiplication of eco-innovation initiatives. In this way, they perform as perlocutions and amplify the eco-innovation.

This study provides several theoretical contributions. First, it advances the literature on the performativity of calculative practices in relation to innovation (Revellino and Mouritsen, 2015, 2017; Yu and Huber, 2023), with a specific focus on eco-innovation. Addressing a knowledge gap about the fate of innovation traces and how they become integrated in calculative practices (Revellino and Mouritsen, 2015), this study suggests that the traces that need to be integrated into calculative practices relate to changes in value creation. It also demonstrates that the integration of these traces results in fundamental changes in calculative frames when eco-innovation alters the logic of value creation, and to changes at the margins when it introduces incremental adjustments. Therefore, this study further adds knowledge to literature on accounting change (Andon et al., 2007). Second, the study contributes to understanding the mechanisms of performativity (Yu and Huber, 2023), in the context of emerging innovation, such as eco-innovation by highlighting the reframing and stabilizing as conditions for performativity to take hold. This result advances the conceptualization of accounting’s performativity as frame (Vosselman, 2022). Third, this study adds to the literature on the effects of performativity (Yu and Huber, 2023), emphasizing iteration between illocutionary and perlocutionary performativity and demonstrating how this dynamic creates an amplifying effect. In doing so, this study bridges literature on accounting performativity (Vosselman, 2022) and its effects (Yu and Huber, 2023). Fourth, the study contributes to lifecycle target costing literature, showing how such techniques can be applied beyond product design to support business model development. The study also argues that eco-innovation can lay the ground for the implementation of lifecycle target costing (Nicolini et al., 2000). Finally, this study enriches the literature on eco-innovation by emphasizing the need for a reframing of traditional full costing and by illustrating how lifecycle target costing can be an appropriate framing for reducing uncertainties and creating value. Thereby, this study suggests potential solutions for financial barriers previously highlighted in the field (Guldmann and Huulgaard, 2020; Hofmann and Jaeger-erben, 2020).

This study provides practical contributions. It proposes lifecycle target costing as a tool for reducing uncertainties surrounding circular business models, which have been identified as a key barrier to their implementation (Linder and Williander, 2017). It also emphasizes the importance of collaboration between customers and providers in cost control, underscoring the need to strengthen this relationship to enable the development of eco-innovation that created value for customers, providers and society.

This study also makes societal contributions by highlighting calculative practices that enable environmentally conscious innovation. It also emphasizes the need for addressing calculative practices as adaptive practices for shaping environmental initiatives and allowing eco-innovation initiatives to emerge, which can support sustainability transitions in society. This study also sheds light on the performative role of accounting in shaping organizations’ interpretation and enactment of environmental initiatives, which could be of relevance to policymakers and higher education.

Finally, this study is subject to limitations and suggests future research avenues. First, it considers the performativity of calculative practices in shaping eco-innovation. One future research avenue is therefore to explore the extent to which the findings may also be applicable to other types of innovation. This study also focuses on episodes where the performativity of calculative practices has been sustained, shaping eco-innovation. Yet episodes of counter-performativity also existed but were not the focus of this study. We urge future research to address this.

Additionally, while this study primarily sheds light on the role of calculative practices in shaping eco-innovation, other factors such as strategic orientation and top management support could also have played a role in bringing eco-innovation into being. Future studies can investigate factors supporting and hindering the performativity of calculative practices in shaping eco-innovation.

This study was supported by the MISTRA REES (Resource-Efficient and Effective Solutions) research consortium, funded by MISTRA (The Swedish Foundation for Strategic Environmental Research), Linköping University, and Electrified Material Handling (VINNOVA - 2021-01787). We thank the anonymous referees and editor Chris Akroyd for their constructive comments during the revision process. We also benefited from comments on previous versions of the paper presented at the 47th European Accounting Association Annual Congress 2025 (Rome, Italy) and the 12th Conference on Performance Measurement and Management Control, EIASM 2023 (Barcelona, Spain).