Integrating organisational- and individual-level performance management systems (PMSS): a case study in a large Indonesian public sector organisation

Abstract

Purpose This study aims to comprehensively examine the integration of organisational- and individual-level performance management systems (PMSs) in the context of public sector organisations (PSOs) of developing countries (DCs), by investigating the elements of PMSs in the studied organisation. Design/methodology/approach A case study in a large PSO of a developing country was conducted. The design of the study and the data analysis drew on Ferreira and Otley’s PMSs framework. Data were captured from electronic and printed document archives, online written interviews with participants and face-to-face interviews. The data then were triangulated and analysed thematically. Findings The study reveals a recursive relationship between culture and PMSs, and identifies conflicting regulatory requirements and a lack of information technology capacity led to the development of dual, loosely coupled PMSs in the studied organisation. Research limitations/implications The findings may not be generalisable beyond a large, PSO in a developing country; the study did not consider the linkages between the integration of organisational- and individual-level PMSs and other PMSs; the study looked at only two notions of culture; and the study asked participants to recall past events, so was retrospective in its design. Practical implications The findings illustrate the need for public sector managers and key policymakers to use both formal and informal control systems, together with technical and social integration mechanisms, as well as management accounting (MA) and human resources management (HRM) control approaches, when attempting to integrate organisational- and individual-level PMSs in the PSOs of DCs. Social implications Future studies may usefully investigate the integration of organisational- and individual-level PMSs in different contexts, consider culture and contextual factors when investigating the integration of organisational- and individual-level PMSs in different contexts, examine whether national culture also substantially impacts PMSs in other countries and attempt to inform the MA literature by drawing on HRM theory and research on individual-level PMSs. Such studies may help to address the gap between PMS theory and practice and better allow MA researchers to contribute to practice. Originality/value The study contributes to management control systems (MCSs) and PMSs literature by extending our understandings in the relationship between accounting and non-accounting controls, the contextual factors that affect PMSs and highlighting the importance of considering cultural context when integrating PMSs in the PSOs of DCs.

Integrating a new management accounting routine into a routine cluster: the role of interactions between multiple management accounting routines

“…Unlike most existing studies (Hopper et al , 2009; Ndemewah and Hiebl, 2022; van Helden and Uddin, 2016; van Helden et al , 2021), the case here does not suggest that the actors at N&TCo adopted the new continuous improvement routine solely due to external pressure (from LeHolding). In contrast, given the intertwinedness of the new continuous improvement routine and the existing performance evaluation/reward routine, as well as the ostensive routines being present, mid- and lower-level managers at N&TCo did not resist the new routine as observed in other case studies of emerging-country organizations (Aliabadi et al , 2021; Harahap, 2021; How and Alawattage, 2012; Moses and Hopper, 2022; Nguyen and Hiebl, 2023). This case research thus suggests that such resistance may be lower if newly introduced management accounting practices are well intertwined with existing practices.…”

“…This implies that future research on the complementarities between management accounting and control practices may need to more closely distinguish between forms of complementarity. A second contribution is that in this case of an emerging-country organization, resistance to newly introduced management accounting practices was not as pronounced as in some prior cases (Aliabadi et al , 2021; Harahap, 2021; How and Alawattage, 2012; Moses and Hopper, 2022; Nguyen and Hiebl, 2023). A reason for such non-existing resistance might be found in the complementarity and intertwinedness of the new management accounting routine and the existing organizational routines.…”

“…That is, reviews of management accounting research on emerging economies mostly suggest that such practices are often implemented due to external pressure (Clerkin and Quinn, 2021;Hopper et al, 2009Hopper et al, , 2017Ndemewah and Hiebl, 2022;van Helden and Uddin, 2016;van Helden et al, 2021). Consequently, actors in emerging economy organizations may adopt such management accounting practices ceremonially, often leading to a loose or nonexisting coupling between information these actors provide through management accounting practices and their day-to-day activities (Aliabadi et al, 2021;Harahap, 2021;How and Alawattage, 2012). If such management accounting practices are not embraced in actors' day-to-day activities, they may remain isolated practices and less likely to interact with other organizational routines.…”

“…In particular, the literature suggests that in emerging countries, new management accounting practices are often introduced ceremonially to satisfy external pressures from stakeholders (Clerkin and Quinn, 2021;Hopper et al, 2009Hopper et al, , 2017Joshi, 2001;Ndemewah and Hiebl, 2022). Consequently, while ostensibly adopted, such practices are often resisted (Aliabadi et al, 2021;Harahap, 2021;How and Alawattage, 2012;Moses and Hopper, 2022) and thus may not be routinized or integrated in existing routine clusters. Our empirical case of an emerging-country organization is thus of interest to this body of literature, although the QRAM 20,4 main focus of the study is on the integration of management accounting routines in routine clusters.…”