Performance Management of Higher Education: A Conceptual and

Empirical Analysis

By

Jane Broadbent, Deputy Vice Chancellor and Provost and Professor of Accounting,

Roehampton University, London, UK

Richard Laughlin, Emeritus Professor of Accounting, King’s College London, University of

London, London, UK

Using the concept of ‘steering’, drawn from the thinking of Jurgen Habermas, the argument

of this presentation is that Performance Management Systems (PMS) are central in the

societal regulation and internal control of organisations. A conceptual model of PMS is

developed building on some key ideas in the sociological, management, management control

and management accounting literatures. This model moves away from the over-concentration

on ex post performance measurement, as distinct from a concern for ex ante performance

management, in too much of this literature. The PMS conceptual model is ‘middle range’

(Laughlin, 1995, 2004; Broadbent and Laughlin, 1997) in the sense it informs, but also needs,

empirical application to make the model meaningful. The conceptual model develops a range

of alternative forms of PMS lying on a continuum from what is referred to as ‘transactional’

at one end to ‘relational’ at the other built on underlying instrumental and communicative

rationalities and guided by a range of managerial and contextual factors.

The empirical application of the conceptual model in this presentation is Higher Education

(HE) in England. It is hoped that this country-based case study will have resonances with

what is happening in HE in Australia. But, possibly more importantly, it is introduced to

demonstrate the power of this conceptual thinking to provide new levels of understanding to

the nature and workings of PMS in all empirical situations. In HE in England two dominant

institutional steering media are identified: regional Funding Councils, (in England, the Higher

Education Funding Council of England (HEFCE)) and the Research Councils (RC).

Regulation of funding flows from the two bodies is described using the conceptual

framework developed. HEFCE’s regulations are more ‘relational’ in nature relative to the

RCs more ‘transactional’ systems. Located in two different Government Departments until

June 2007, these two funding organisations are now both responsible to the Department of

Business, Innovation and Skills (DBIS). The presentation ends with some evaluatory

reflections conceptually and in relation to the regulatory processes of HE in England

following this and more recent changes.

The conceptual ideas for this presentation are drawn from Broadbent and Laughlin (2009)

whilst some of the empirical material comes from Broadbent, Gallop and Laughlin (2010).

However, because the regulation of HE in England is changing rapidly some of the latter

material will be brought up to date but much of what is happening to-day is traceable to the

detail contained in this 2010 paper and in the predictions made.

Key Words: regulation; steering; performance management systems (PMS); transactional

PMS; relational PMS; Higher Education in England.

References:

Broadbent, J and Laughlin, R. (1997) Developing Empirical Research in Accounting: An

Example Informed by a Habermasian Approach, Accounting, Auditing and Accountability

Journal, 10(5), 622-648

Broadbent, J. and Laughlin, R. (2009) Performance Management Systems: A Conceptual

Model, Management Accounting Research, 20(4), 283-295

Broadbent, J., Gallop, C. and Laughlin, R. (2010) Analysing Societal Regulatory Control

Systems with Specific Reference to Higher Education in England, Accounting, Auditing and

Accountability Journal, 23(4), 506-531

Laughlin, R. (1995) Empirical Research in Accounting: Alternative Approaches and a Case

for ‘Middle Range’ Thinking’, Accounting, Auditing and Accountability Journal, 8(1), 63-87

Laughlin, R. (2004) Putting the Record Straight: A Commentary on ‘Methodological Choices

and the Construction of Facts: Some Implications from the Sociology of Knowledge’,

Critical Perspectives on Accounting, 15(2), 261-277