Vernacular budgeting and accounting routines – a longitudinal constructive case study

PurposeThis case study aims to report a longitudinal analysis of the development and use of local “vernacular” accounting practice and a digital rolling-forecast system known as TeamBudget in a public sector organization.Design/methodology/approachThe study employs the constructive research approach which utilizes participative observation in the development of TeamBudget over the 15 years since 2004. The empirical data utilized includes eight interviews and documentary data for the system created.FindingsThe study demonstrates how the actions of employees responsible for developing a locally relevant financial planning system, TeamBudget, facilitated the emergence of new accounting routine…

Legitimacy and relevance of a performance measurement system in a Finnish public-sector case

Purpose This study investigates the difficulties involved in translating stakeholder expectations into action and maintaining legitimacy through the use of a performance measurement system (PMS) created in a Finnish regional development company (RDC). This longitudinal case study illustrates the fluctuating and socially constructed nature of legitimacy in the public sector. Design/methodology/approach This qualitative case study longitudinally analyzes the various developments occurring during and after the development of a PMS system for the case organization. Empirical data include interviews, workshops, observation and other materials relating to the case organization. Findings The init…

Accounting, microfoundations, hybridization and longitudinal conflict in a Finnish health care organization

PurposeThis article analyzes the cognitive microfoundations, conflicting institutional logics and professional hybridization in a case characterized by conflict.Design/methodology/approachIn contrast to the majority of earlier studies focusing on special health care, the study was conducted in a Finnish basic health care organization. The empirical data include 36 interviews, accounting reports, budgets, newspaper articles and meeting notes collected 2013–2018.FindingsThe use of accounting techniques in this case did not offer professionals sufficient support under conditions of conflict. The authors suggest that this perceived lack of support intensified the negative emotions toward accoun…

Blame game or dialogue? Financial, professional and democratic accountabilities in a complex health care setting

Purpose The purpose of this paper is to investigate how the complexity of the network governance setting affects accountability practices. The authors pay particular attention to the organizational characteristics that may enable a common understanding of multiple accountability relationships, or lead to problems in reconciling competing forms of accountability, thereby appearing as blame game-type behavior. Design/methodology/approach The authors conducted a case study with 31 semi-structured interviews in a Finnish health care organization (FHC) that offers basic public health care services. The organization represents a co-operative arrangement with the main city and three smaller munic…

Innovation through implementation of a quality improvement method : A finnish public-sector case

Purpose The purpose of this paper is to analyse the effectiveness of a quality improvement method in driving innovation in the public sector. The study expands on the concept of innovation and analyses the types and usefulness of the innovations observed. Design/methodology/approach The study utilizes an action research approach. The aim of the quality improvement method introduced is to generate innovations enhancing efficiency. An interventionist research method is required to produce the findings. Data collection methods include a preliminary question sheet, interview, workshops, observation and the examination of other material concerning the case organization. Findings The study suppo…

Implementation of quality cost management tool in dyadic purchaser-provider relationship context

Controllers’ role in managerial sensemaking and information trust building in a business intelligence environment

This study explores how an organization’s controllers (management accountants) give sense to the information provided by its business intelligence (BI) system, and thus shape the construction of information trust. A qualitative case study was conducted within a Finnish food manufacturing company, building on the notion of trust related to management accounting information and sensemaking theory. The study was informed through open-ended interviews and an examination of internal accounting and management reports. The authors found that the company used an integrated BI system that enabled the production of information in a timely and perceivably standardized manner. Controllers managed this …

Non-IFRS and changes in accounting institutions : Lessons from Nokia

We analyse the lessons learned from Nokia to illustrate the changing focus in accounting and organisational practices that affect the perceptions of relevant accounting work and the key measures of success. In the course of an analysis covering 25 years, the introduction of management accounting innovations was first emphasised regarding managerial relevance but were later replaced by financial accounting emphasis and innovations (e.g. non-IFRS reporting). Our data includes public reports, newspaper articles and 21 interviews made between 1996 and 2019. We present a framework for analysing shifts in the focus of accounting. Our case analysis on changing accounting practices, on shifting pe…

Quality management in the public sector accounting department - (un)avoidable quality costs and unlikely financial impacts

This paper investigates the nature of quality costs and the likelihood of their having financial impacts in the public sector. An illustrative quality development case project in an accounting department of a Finnish city administration is presented. The empirical data includes answers to a qualitative project question sheet, workshop material and participative observation. Quality problems are classified according to their quality cost category and the extent to which they are avoidable. Some of the quality costs proved unavoidable and some are likely to lack financial impact, exhibiting sticky cost behaviour. The study indicates that certain prevention and appraisal costs in the public se…

Cost Management in the Public Sector: Legitimation Behaviour and Relevant Decision Making

This paper presents a case study where a cost management project was implemented using action research methodology at two Finnish organizations working in a purchaser–provider relationship. While the study demonstrates the efficiency-seeking motive behind the implementation of the management accounting tool, subsequent investigation found that tool remained partly unused despite showing its potential relevance for practice through user involvement. However, this does not necessarily signal legitimation-seeking behaviour. Reasons for not using some parts of the tool point to an overestimation of the functionality and an underestimation of implementation problems during the design process. Th…

Cost Management in the Public Sector : Legitimation Behaviour and Relevant Decision Making

This paper presents a case study where a cost management project was implemented using action research methodology at two Finnish organizations working in a purchaser–provider relationship. While the study demonstrates the efficiency-seeking motive behind the implementation of the management accounting tool, subsequent investigation found that tool remained partly unused despite showing its potential relevance for practice through user involvement. However, this does not necessarily signal legitimation-seeking behaviour. Reasons for not using some parts of the tool point to an overestimation of the functionality and an underestimation of implementation problems during the design process. Th…

Kontrollikuutio : riskipainotettu kustannusvaikuttavuuden analyysi- ja johtamismalli kunnallisessa perusterveydenhuollossa

There have been calls for cost-effective public services and the integration of management control and risk management systems. Municipalities currently need to consider aging populations and diminishing financial resources. But municipal services may also include other risks, such as reputational and political risks, along with changes in legislation as well as unexpected changes in operating circumstances. Risks and how they are managed affect both the costs and the effectiveness of municipal services. However, cost-effectiveness and risks are not clear-cut concepts, especially in the public health services. Therefore, in order to better understand risks in public sector management contro…

Perspectives on Relevance : the Relevance Test in the Constructive Research Approach

Abstract Interventionist research (IVR), such as the constructive research approach (CRA), has been suggested as a method to improve the relevance of management accounting (MA) research. Although literature identifies several perspectives on relevance, the current assessment of CRA focuses on practical relevance. Moreover, an overreliance on pragmatism in assessing CRA research in the form of CRA market tests has been criticized. This article analyses the challenges inherent in conducting and assessing CRA research, both conceptually and with a CRA case example. In order to overcome these possible CRA challenges, we suggest analyzing CRA relevance from multiple perspectives. The perspective…