Constraining and facilitating management control in times of austerity: Case studies in four municipal departments

Berend van der Kolk (Department of Accounting, University of Groningen, Groningen, Netherlands)
Henk J. ter Bogt (Department of Accounting, University of Groningen, Groningen, Netherlands)
Paula M.G. van Veen-Dirks (Department of Accounting, University of Groningen, Groningen, Netherlands)

Accounting, Auditing & Accountability Journal

ISSN: 0951-3574

Publication date: 17 August 2015

Abstract

Purpose

The purpose of this paper is to examine how management control (MC) within governmental departments is used in times of austerity, and how insights from agency and stewardship theory can enhance the understanding of this issue.

Design/methodology/approach

The authors distinguish two types of MC (constraining and facilitating) based on their different assumptions regarding human behavior (agent-like and steward-like). The authors empirically analyze changes in the use of these types of MC in four cases located in two municipalities. The collected data consists of 51 semi-structured interviews, desk research and multiple field observations.

Findings

The authors find that MC at the departmental level becomes more constraining in times of austerity. The authors suggest that an overemphasis on constraining MC has negative consequences. It can, for instance, evoke agent-like, opportunistic behavior while it disregards potential steward-like behavior. These negative consequences are less prevalent when there is a simultaneous increase in emphasis on the use of facilitating MC elements.

Originality/value

The authors acknowledge “human ambivalence,” i.e. an employee’s recurring choice between agent-like and steward-like behavior, and illustrate the dangers of overly relying on constraining types of MC. The authors also contemplate alternative strategic managerial responses to austerity in a public sector context.

Keywords

Acknowledgements

The authors would like to thank Bob Scapens, Matthew Hall, Sandra Tillema, Joanna Gusc, the guest editors and the two anonymous reviewers for their constructive comments. Earlier versions of this paper have been presented at a seminar at the London School of Economics and Political Science, the 8th EIASM Public Sector conference in Edinburgh, the 38th EAA conference in Glasgow and at a seminar at the University of Groningen. The author highly appreciated the feedback from the participants.

Citation

van der Kolk, B., ter Bogt, H.J. and van Veen-Dirks, P.M.G. (2015), "Constraining and facilitating management control in times of austerity: Case studies in four municipal departments", Accounting, Auditing & Accountability Journal, Vol. 28 No. 6, pp. 934-965. https://doi.org/10.1108/AAAJ-03-2014-1660

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Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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