Implementing Accountable Management Reforms in Public Sector. The difficult travel from Intentions to Effects

Over the last decade a number of management accounting practices and techniques have appeared to improve the quality and reliability of management accounting information in public sector. The aim of this paper is to gain more insight into the link between management accounting reforms and organizational learning and change in the hospital sector. Especially, the focus is put on the processes of defining, interpreting and sense-making of accounting information in this complex public sector management. On this background the following questions are put forward: How can interpretation of and adjustment to accounting information be understood at macro-hospital level (county level) How is a management accounting reform, such as the introduction of a new funding system, defined and interpreted at internal, clinical level in a hospital Until July 1997 funding of Norwegian hospitals was independent of number of in-patients treated. Now Norwegian hospitals are paid on 60-70% per-case basis (including out-patient services). The hospitals' adjustments to these different systems of budget constraints are analysed by data from the county of Nordland and a case study of a university hospital clinic. The studies show that the hospitals adjusted to the frame budget system from1991-1997 by systematically creating budget deficits, which were identified as one dominant budget driver during this period. This adaptation can be defined as experiential, organisational learning. This coupling between the norm system and the action system has to be studied by focusing on the learning processes at the clinical level. The case study shows that the leaders made a different conceptualisation of the new funding model than that of the government. Due to these diverse observations, conceptualisations and concrete experiences at different institutional levels, more ambiguity will occur in controlling hospital activity and cost under the new per-case funding system.