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Technological advances and increasing competition are forcing organisations to monitor their performance ever more closely. The concept of the balanced scorecard offers a systematic and coherent method of performance measurement that in particular concentrates on assessing present performance in the light of an organisation’s strategy and takes into account the importance of the various policy aspects. In this paper we study the extent to which the concept contributes to the desired improvement of performance. To this end, we examine the motives for adopting the concept and the decision-making process around this adoption. We study the functioning of the balanced scorecard as a means to control performance, assuming that its functioning is linked to an organisation’s problems and is influenced by other control instruments used. This is why we have done case research.

The study aims to add to the knowledge of governance and control aspects of intrafirm relationships by exploring a transaction costs economics perspective (TCE perspective) on governance and management control structure choices related to the development of a shared service center (SSC).

The notion of governance and control in SSC organizations is explored and a TCE model is developed to analyze management control structure choices for SSC governance. The nature of internal transactions is related to the dimensions of transactions. Then an example case study is used to illustrate the application of the theoretical model.

The theoretical analysis broadens existing frameworks of management control structures by particularly pointing to the possibility of including governance structures for internal transactions and exit threats (connected to a market mechanism) in the management control structure of an organization. Confrontation with the case example illustrates that the possibility of an exit threat was not explicitly considered by top management (“the designer” of management control). Although the TCE model may be a useful tool for analysis purposes, it has little explanatory power in this particular case. Organizational change processes toward SSCs are complex and can only partly be examined with conventional economics-based approaches such as TCE.

Governance and control of SSCs is conceptually theorized, using an instrumental economics approach. The case study is not generalizable but illustrates the use of the model in a particular situation. To understand governance and control change within SSC organizations, more longitudinal case studies are needed.

A TCE approach to governance and control choices regarding SSCs might provide practitioners with insights into the efficiency of specific management control structures.

This chapter contributes to the extant knowledge by both exploring and challenging a TCE perspective on SSC-related changes in management control.

Purpose – This study focuses on the relationship between local governments and public sector joint ventures (JVs). Public sector JVs are separate administrative entities that undertake public service activities on behalf of local governments. The aim of this study is to examine the vertical management control packages that are used by local governments to control the relationship with their public sector JVs.

Design/methodology/approach – Two case studies have been conducted in two public sector JVs, owned jointly by more than 20 local governments. The analysis of the two cases is informed by an integrated conceptual framework describing how transactional and relational factors influence control, trust, and risk in the context of public sector JVs.

Findings – The case studies provide a nuanced understanding of the interplay between the vertical management control packages, trust between the parents and the public sector JVs, and risks as perceived by the local governments. The case findings not only reveal how local governments struggle with adequate outcome control but also highlight how and why they rely on behavioral control. A related finding is that while the probability of poor business performance does not have a significant impact on the design of the vertical control packages, the social impact of failure has the potential to create a sense of urgency with regard to changes in the design of vertical management control packages.

Originality/value – This study adds to the literature on interorganizational relationships by providing insight into the use of vertical management control packages in the specific, but relevant, setting of public sector JVs.

This study explores how balanced scorecard format and reputation from environmental performances interact to influence performance evaluations.

Two general options exist for inserting environmental measures into a scorecard: embedded among the four traditional perspectives or grouped in a fifth perspective. Prior balanced scorecard research also assumes negative past environmental performances. In such settings, and when low management communication levels exist on the importance of environmental strategic objectives (a common practitioner scenario), environmental measures receive less decision weight when they are grouped in a fifth scorecard perspective. However, a positive environmental reputation would generate loss aversion concerns with reputation, leading to more decision weight given to environmental measures. Participants (N=138) evaluated performances with scorecards in an experimental design that manipulates scorecard format (four, five-perspectives) and past environmental performance operationalizing reputation (positive, negative).

The environmental reputation valence’s impact is more (less) pronounced when environmental measures are grouped (embedded) in a fifth perspective (among the four traditional perspectives), when the environmental feature of the measures is more (less) salient.

Findings provide the literature with original empirical results that support the popular, but often anecdotal, position of advocating a fifth perspective for environmental measures to help emphasize and promote environmental stewardship within an entity when common low management communication levels exist. Specifically, when positive past environmental performances exist, entities may choose to group environmental performance measures together in a fifth scorecard perspective without risking those measures receiving the discounted decision weight indicated in prior studies.

In the past decades, Dutch public sector organizations (PSOs) have been encouraged to become more “business-like” in their internal control and accountability processes, following a more general trend toward New Public Management (NPM) in Western societies. However, in the Netherlands, this trend has met with increasing resistance and discontent among public sector professionals. In this chapter, a framework is developed that enables these public sector professionals themselves to discuss and reflect on their internal control and accountability processes, and possibly to effect changes in it.

The chapter contains a critical analysis of existing research on management control, accountability, and learning in PSOs and describes a reflection and discussion session with a group of senior staff employees at a Dutch university, employing the framework developed in this chapter.

It is argued that, generally speaking, the “business-like” approach of NPM does not appear appropriate for most public sector activities and may even negatively affect accountability and learning in PSOs.

The chapter critically assesses the impact of NPM on PSOs and provides an alternative to NPM in the form of experimentalist governance, with possible positive implications for the effectiveness of public sector activities.

This chapter is among the first to adapt a framework, developed for scientific and descriptive use, for more practical and prescriptive purposes, that is, as an instrument for public sector professionals to discuss and reflect on their internal control and accountability processes.

The purpose of this study is to explore the use of shared services by end-users and why this may conflict with the use as intended by the shared service center (SSC) management.

By applying structuration theory, this empirical study draws on qualitative data obtained from semi-structured interviews with managers and end-users of an SSC. This SSC is part of a Dutch subsidiary of a multinational corporation that produces professional electronics for the defense and security market.

We find two main types of shared services usage by end-users which were not intended by the SSC management: avoidance and window-dressing. These forms of unintended usage were the result of contradictions in social structures related to the centralization and decentralization models as appropriated by end-users and management.

Our findings show that the benefits of shared services depends on how well contradictions in managers’ and end-users’ interpretive schemes, resources, and norms associated with centralization and decentralization models are resolved.

A popular argument in existing studies is that the benefit of shared services follows from the design of the SSC’s organizational structure. These studies overlook the fact that shared services are not always used as their designers intended and, therefore, that success depends on how the SSC’s organizational structure is appropriated by end-users. As such, the originality of this study is our focus on the way shared services are used by their end-users in order to explain why SSCs succeed or fail in reaping their promised benefits.

Collaborative relationships (CRs) in supply chains have become central in international business. Strategic performance measurement systems (SPMSs) establish a causal chain of performance measures that can be aligned with strategic goals and can link performance measures with business processes and suppliers. This study investigates whether CRs in supply chains positively affect buyer competitiveness by using SPMSs. Firm competitiveness is described in terms of product cost-price, delivery, as well as flexibility. We demonstrate through the use of SPMSs that CRs indirectly and positively influence the competitiveness of delivery and flexibility. This chapter contributes to the growing literature on the role of SPMSs in linking the relationship between CRs and competitiveness.