Examining the joint effects of strategic priorities, use of management control systems, and personal background on hospital performance

Abstract

This study aims to respond to recent calls for a better understanding of the factors that support the effectiveness of formal control practices in hospitals. Based on survey data from 117 top-level managers in Belgian hospitals KeywordsPerformance measurement systems; strategic priorities; personal background; hospital performance; interactive use IntroductionHospitals face growing regulatory and competitive pressures to develop management control systems (Cardinaels and Soderstrom, 2013). However, formal management control systems (MCS) are seen to be problematic in hospitals (Aidemark and Funck, 2009).Questions about the use of monetary incentives for goal congruence, the power of physicians and nurses over operational processes, various priorities imposed by a large diversity of influential stakeholders, and austere budgets that constrain expansion and restructuring combine to create unparalleled complexities for the effective use of MCS (Abernethy et al., 2007). Previous research in management accounting thus calls for a better understanding of MCS in hospitals (e.g., Bai et al., 2010;King and Clarkson, 2015), especially factors that influence the effectiveness of formal performance measurement systems (PMS) (Ballantine et al., 1998;Cardinaels and Soderstrom, 2013). 2Over the past two decades, the literature on MCS in hospitals has emphasised the importance of aligning the use of MCS with hospital strategies (e.g., Aidemark and Funck, 2009;Ballantine et al., 1998;Chilingerian and Sherman, 1987;Wardhani et al., 2009), an alignment that should lead to positive organisational outcomes, such as hospital performance 2 Management control systems are defined as "formal, information-based routines and procedures managers use to maintain or alter patterns in organisational activities" (Simons, 1995, p. 5). Formal performance measurement systems are an essential aspect of formal management control systems (Chenhall, 2005;Henri, 2006). 3( King et al., 2010). Inherent in these arguments is the implicit assumption that the individual behaviour of clinicians dominating the core operations of a hospital can be controlled towards the successful achievement of hospital strategies. However, several management accounting studies (e.g., Abernethy and Stoelwinder, 1991, 1995;Jones, 2002) report that regular conflicts between the professional objectives of administrators and clinicians curtail the effectiveness of MCS. Coombs (1987, p.391) notes that bureaucratic control mechanisms attempted by administrators have "the potential to substantially affect the motivations and practices of a relatively cohesive and powerful occupational group who frequently defend their professional autonomy quite effectively". Therefore, our knowledge of how PMS are effectively used to support hospital strategies remains incomplete and fragmented.In the hospital management literature, significant attention has concentrated on the role of "doctor managers" (i.e., managers with a clinical background) in the management team and the implication...

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