Balancing the Levers of Control in Public Sector Organizations: Management Control Systems in Italian Universities

The measurement of results and the use of data in decision making is largely deemed the best way to ameliorate firms’ performance. Therefore, a vast literature has paid huge efforts in prescribing how to design and implement... [ view full abstract ]

The measurement of results and the use of data in decision making is largely deemed the best way to ameliorate firms’ performance. Therefore, a vast literature has paid huge efforts in prescribing how to design and implement performance measurement (PM) and management control systems (MCS) to make them work properly and to avoid side effects. One of the most known theoretical framework widely applied to study MCS in private sector organizations is Simons’ Levers of Control (1995). Such framework uses the term MCS to define a wide range of formal and informal systems used by managers to pursue the firms’ strategies and objectives, therefore proposing a specific lens on the broad concept of MCS. In particular, it poses attention on the necessity to balance a wide set of processes and mechanisms employed at firm level, described as boundary, diagnostic, interactive and belief levers. Among them, PM systems are usually seen as a diagnostic lever.
For public sector organizations, the adoption of PMS is considered a rational response to the request of an improvement in performance delivery. This because such systems are widely used by private sector organizations, which have considered the good examples to imitate by public organizations (Osborne – Gaebler, 1992).
In this paper, we apply the LOC framework to public sector organizations (Kominis – Dudau, 2012). In particular, we analyze the case of the recent introduction of a PMS among the Italian Universities: the LOC framework has been applied to try to explain both the common resistance to it and the different local use.
Since the last decade, a vast process of reform has deeply changed the way through which Italian public Universities are managed, organized and funded and it has also modified hiring and promotion procedures for academicians. With the explicit purpose of improving organizational performance, a huge body of new regulation consisting of a vast array of quantification practices, indicators and measurement have been imposed to Italian Universities. Italian Universities are strongly backlashing against the reform. While dealing with the Ministry and its regulations, most universities are claiming that the implementation of the new system is creating huge disparities in fund distribution and inequalities among universities, and in no way improving the quality of teaching and research, while instead the bureaucratic burden is becoming unsustainable (Baccini – de Nicolao 2016).
Through a comparative case study the paper analyses through the LOC framework the different levels of implementation and resistance to the new systems in two Italian public Universities.

References:
Simons, R. L. (1994), Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal, Harvard Business School Press, MA
Kominis G., Dudau A. I. (2012), Time for interactive control system in public sector? The case of the Every Children Matters policy change in England, Management Accounting Research, 23, pp. 143-155.
Baccini, A. and G. De Nicolao, (2016), Do they agree? Bibliometric evaluation versus informed peer review in the Italian research assessment exercise. Scientometrics, p. 1-21.
Osborne D., Gaebler T. (1992), Reinventing government, Plume: UK