1

Management accounting and control innovations in an

organization context: Institutionalization process in a

Portuguese government agency

Abstract

The scope of this paper is the organizational context of a specific Portuguese

government agency (IGFSS - Social Security Financial Management Institute), that

manages the collection of debts from debtors to the whole social security system. In this

organization a deep management change process occurred and innovative management

accounting and control frameworks were implemented. Institutional theory was adopted

to support the investigation, in particular literature on the interaction between the

macro-level (the global) and the micro-level (the local) (Barrett et al., 2005; Cruz et al.,

2011; Hopper and Major, 2007). Furthermore the institutional relational dynamics

model of Dillard et al. (2004) backboned the study. A retrospective and in-depth

longitudinal case study was conducted at the organization, in order to tackle this gap in

literature. The case study was categorized as explanatory and illustrative. Dillard et al.

(2004) model explains some of the reasons for the observed practices. Within the scope

of the implementation process, some of the practices were reproduced, but other

practices were distinctive (reshaped, adapted or innovated). Consequently, findings

indicate internal dynamics of change which are not explicitly addressed in that model.

Borrowing mainly from the contributions of Cruz et al. (2009), Cruz et al. (2011), and

Lounsbury (2001, 2008), those internal dynamics were translated into practice variation,

supported by different perspectives identified at the several levels of performance

management and quality management. The introduction of practice variation, as a

complement of Dillard et al. (2004) model and of Hopper and Major (2007) revised

model, is the main contribution of the investigation.

Key words: Management accounting and control innovations; Institutional relational

dynamics; Macro and micro-level interaction; Practice variation; Case study

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1. Introduction

Since Johnson and Kaplan’s “Relevance Lost” (1991) book that many ‘innovative’

management accounting techniques (e.g. activity-based costing and management –

ABC/M, management by objectives (MBO), performance measurement systems (PMS),

total quality management (TQM), and balanced scorecard (BSC), just to mention a few)

have emerged to “help managers’ decision-making” and to “improve organizations’

efficiency and profitability”.

The way how these managerial devices diffuse and are implemented in

organizations have been the scope of intensive investigation. Moreover, researchers

have also recently looked at organizations (locals) in a broader context. Concretely, the

pressures and/or the trends that arise from the political and economic environment (the

global) and from the organizational field influence what happens in the local.

Institutional theory (Dillard et al., 2004; DiMaggio and Powell, 1983; Hopper and

Major, 2007; Scott, 2008; Zucker, 1977, 1991) has been the theoretical support of these

concerns. The present investigation extends this scope by analysing the top-down

pressures as well as the internal dynamics of management accounting change at

organizational level.

To this end a case study strategy was adopted. The field site is Instituto de Gestão

Financeira da Segurança Social1 (IGFSS), a financial public institute that manages the

social security system in Portugal. Its main ‘business’ is to manage the debt from

debtors to the whole social security system. In this organization, a change process was

followed by significant changes in the management accounting and control systems and

quality management systems.

The change process was gradually optimized and translated into the

implementation of management accounting and control innovations, in particular a

quality management program, similar to TQM, MBO, a BSC, and a strategic plan.

These innovative frameworks were diffused in the organization at several levels and

commitments. The quality management program was implemented as a response to a

’quality program’ launched by the Ministry of Social Security and Labour (MSSL), in

2004, based on the common assessment framework (CAF) and on TQM. This ‘quality

1 Social Security Financial Management Institute.

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program’ specifies its purposes at several levels. First, the framework is directed to the

optimization of resource and the rationalization of processes. Second, in a global

orientation for results perspective, reduction of non-quality costs plays a very important

part. Third, continuous improvement implies also the motivation of collaborators and

the improvement of the service rendered to customers/citizens (Ministry of Social

Security and Labour, 2004). MBO, BSC and the strategic plan are performance

measurement systems which were introduced in the organization as a response to

regulatory demands from the organizational field level above IGSS – the Portuguese

government (SIADAP2 and QUAR

3) and in particular the MSSL (a management

contract between the Ministry and the board of directors (BD) of the organization) – see

chapter 2 in particular.

The purpose of the research is to understand how the organization responded to

the pressures and trends that came from the organizational field and the political and

economic field levels. Moreover, the investigation intends also to find how the case

study and the respective change process are informed by Dillard et al. (2004) model.

This model has been widely used in recent investigations to explain the dynamics of

accounting change in organizations. The analysis was complemented with insights

borrowed from other researchers (Cruz et al., 2009; Cruz et al., 2011; Hopper and

Major, 2007; Lounsbury, 2001, 2008; Zucker, 1991) in order to fully understand the

internal dynamics of change which were identified in IGFSS. The paper also intends to

propose an extension of Dillard et al.’s model in order to enhance comprehension

towards the micro dynamics of accounting change.

This paper is structured as follows. In section 2, literature review is presented,

focusing mainly on institutional theory which supports the investigation. In particular,

the questions associated with organizational context, multiple field levels and intra-

organizational dynamics are under analysis. In section 3, the methodology and research

methods adopted in the investigation are depicted. In particular, research questions are

listed and the research methods and sources of evidence are presented. The empirical

study is developed in section 4. The paper ends with discussion and conclusions in

section 5.

2 Sistema integrado de avaliação do desempenho da administração pública (Performance appraisal system

for public administration). 3 Quadro de avaliação e responsabilização (Scorecard for assessment and accountability for Portuguese

government agencies).

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2. Literature review

Nowadays, diffusion processes of management accounting and control

innovations receive greater attention of researchers. This attention includes the

understanding of the reasons why and how some innovations spread more successfully

than others. Innovation can be described as consisting of the successful introduction of

new ideas or phenomena into a given social system (Ax and Bjornenak, 2007) and

diffusion as “the process by which an innovation is spread or disseminated” (ibid.: 360).

In the last thirty years, management accounting and control innovations have

spread out in many organizations, in private and public sectors, such as BSC, ABC/M,

TQM, economic value added (EVA®), target costing, or strategic cost management (Ax

and Bjornenak, 2005, 2007; Lapsley and Wright, 2004; Modell, 2009).

The diffusion of accounting practices in the public sector is an updated topic,

because of reforms of institutions and modifications to existing practices. These reforms

have been following the evolution of public administration and management (PAM),

along three different modes: i) Traditional public administration (PA); ii) New public

management (NPM); and recently, iii) New public governance (NPG) (Osborne, 2006).

Nowadays, NPM remains the most important theoretical framework in many

countries. In a broad concept, NPM is “a general theory or doctrine that the public

service can be improved by the importation of business concepts, techniques and

values” (Pollitt, 2009: 201). Concretely, NPM includes: i) greater emphasis on

‘performance’, through the setting of goals and the measurement of outputs; ii)

preference for lean, flat, small, specialized (disaggregated) organizational forms; iii)

substitution of contracts for hierarchical relations as the principal co-ordinating device;

iv) injection of market-type mechanisms; v) emphasis on treating service users as

‘customers’ and application of quality management techniques such as TQM (Pollitt,

2009; see also Dunleavy et al. 2005; Hood, 1991, 1995; Pollitt, 2000).

Yet, in other countries NPM has been evolving to NPG (Osborne, 2006; see also

Christensen et al., 2008, who mention post-NPM reforms instead of NPG; Denhardt

and Denhardt, 2000, who mention ‘new public service’ – NPS, instead of NPG;

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Dunleavy et al., 2005, who mention post-NPM movement towards ‘digital-era

governance’ - DEG). Some key elements distinguish these two leading modes: i) while

NPM represents the aggregation of individual interests in the conception of public

interest, NPG looks at public interest as the result of a dialogue about shared values; ii)

NPM public servants respond to customers, while NPG public servants respond to

citizens; iii) in NPM the role of government is steering, while in NPG the role is

serving; iv) NPM is market-driven, while NPG is multifaceted (attending to community

values, political norms, or citizens interests); v) NPM assumes an entrepreneurial spirit,

the desire to reduce size government, while NPG assumes public service and

citizenship, the desire to contribute to society; vi) NPM stresses the private sector

management, while NPG stresses service effectiveness and outcomes (Denhardt and

Denhardt, 2000; Osborne, 2006).

Quality management is an updated public administration tool. Either in NPM

paradigm or in NPG paradigm, quality management plays a significant role in the

effectiveness of public servants and quality of service. During the 1990s, in the United

States (US), this perspective was translated into what Tom Peters called the “Osborne-

Gaebler-Gore-Clinton approach” (Gore, 1993, foreword: X) visualized in the best-

sellers ‘Reinventing Government: How the Entrepreneurial Spirit Is Transforming the

Public Sector’ (Osborne and Gaebler, 1992), and ‘Creating a Government that Works

Better and Costs Less: The Report of the National Performance Review’ (Gore, 1993)

(see also Osborne and Plastrik, 1997). Concretely, catch-phrases of this ‘reinventing

government approach’ include ‘alternative service delivery’, ‘total quality

management’, ‘public service’, ‘participatory management’, or ‘increasing quality and

efficiency in providing services’ (Osborne and Gaebler, 1992). Moreover, “the National

Performance Review is about change in the way the government works. The Clinton

administration believes it is time for a new customer service contract with the American

people, a new guarantee of effective, efficient and responsive government, that works

better and costs less” (Gore, 1993: XXIII). Working better and costing less are the twin

missions. Yet, the main focus is on ‘how government should work’, on quality

revolution, and on the improvement of the way the government does business (Gore,

1993).

This concern on quality management in serving the public (considered as the

customers or the citizens) has been also highlighted in other countries and parts of the

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world. In Europe, the association of this paradigm with public administration was

analyzed by European researchers mainly in the 2000s (Dunleavy et al., 2005; Pollitt,

2009).

Lapsley and Wright (2004) mention that management accounting innovations

have mainly originated in the private sector and its adoption by public sector is mainly

attributable to government influence. Moreover, “the private sector literature did

contribute to understanding the diffusion of management innovations in the public

sector, and its explanatory power is set to continue” (ibid.: 373). The diffusion of

innovations and modifications to existing practices in organizations has been deeply

linked to institutionalization and institutional theory for the last three decades in

academic and scientific terms (Scott, 2008). Consequently, researchers have been lately

interested not only to know how institutions arise and are maintained, but also how they

undergo change, both incremental and revolutionary. To researchers more concerned

with practice variation, changes through diffusion are viewed as a sign of progress and

receptivity to innovation, being the role of actors crucial in this kind of change process

(ibid.). Seo and Creed (2002) even mention that institutional embedded praxis deserves

great and empirical attention by researchers, taking into account that it is an essential

driving force of institutional change. Concretely, “organizations do often adapt to their

institutional contexts, but they often play active roles in shaping those contexts” (Meyer

and Rowan, 1977: 348). Even if stability exists in organizations, adaptation to

environmental changes and reforms always occur in organizations (Meyer and Rowan,

1977).

Institutional theory has been widely used, since the 1990s, by researchers, as an

alternative to neoclassical economic perspective. Institutional theory is influenced by

interpretative sociology and some ‘branches’ have been developed over the last century.

Whereas new institutional economics (NIE) focuses on rationality and equilibrium, and

assumes institutions as static, old institutional economics (OIE) emphasizes the active

roles of institutions which are crucial to understand accounting practices

(Wickramasinghe and Alawattage, 2007; see also Scapens, 1994). On the other hand,

OIE seems to be vague about the reasons and processes that lead to the introduction of

innovations into organizations (Ribeiro and Scapens, 2006). In this aspect, NIS provides

researchers with powerful lenses to understand how the institutional environment of

organizations presses actors to adopt managerial innovations. Moreover, NIS has been,

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at present times, a very powerful theory as to interpret management accounting change.

In light of this approach, institutions “produce political and cultural reasons rather than

technical justification for the existence of certain organizational practices…NIS

researchers also focus on the imitation of other’s management accounting methods

which come along through institutional pressures” (Wickramasinghe and Alawattage,

2007: 432, 438). Synthesizing these latter approaches, DiMaggio and Powell (1983)

mention that “there is much to be gained by attending to similarity as well as to

variation among organizations and, in particular, to change in the degree of

homogeneity or variation over time” (ibid.: 158).

However, NIS framework presents some limitations, such as the static character

(reflected in its conceptualization of the operation of institutional pressures) and the way

it deals with intra-organizational issues (Scott, 2008). Consequently, situations of

resistance and ‘decoupling’ (innovations not enacted in everyday interactions and

practices) are accounted for aprioristic and black-boxed perspectives on organizational

behavior (Ribeiro and Scapens, 2006). NIS has focused on convergent change involving

outcomes or the diffusion of new practices. However, it “neglects how new practices

emerge and treats organizations as unitary, passive entities or black-boxes that only gain

legitimacy by conforming to environmental demands” (Hopper and Major, 2007: 64).

Consequently, these researchers deepened their critiques and stated at the time that: i)

NIS dichotomizes economic and institutional pressures (they are in fact intertwined) and

public and private organizations; ii) NIS neglects internal organizational dynamics and

factors (power, conflict or change processes); and iii) economic pressures and symbols

are identified as self-evident (what is not true – they are socially constructed) (Hopper

and Major, 2007; see also Lounsbury and Crumley, 2007).

In a micro-level approach, the degree of institutionalization also affects major

aspects of cultural persistence (generational uniformity, maintenance and resistance to

change), and is influenced, beyond the organizational context, by personal influence and

by ‘office’ (in logistic terms). This means that macro and micro-level are strongly

linked (Zucker, 1977). Most work at the macro-level examines only the (often) non-

intuitive effects of the institutional environment on organizational structure or activity

and takes institutionalization for granted. Thus, the process by which this occurs

remains a ‘black box’. Moreover, “variation in strategic response to the same

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environment can engender differentiation rather than isomorphism” (Zucker, 1991:

105).

More recent research also points to extend NIS by incorporating the intra-

organizational and procedural kind of analysis (typical of OIE). On the other hand, OIE

can be extended by considering the impact of institutional pressures and the processes

through which such pressures can trigger changes (Ribeiro and Scapens, 2006).

Adopting OIE (Burns and Scapens, 2000) as an organizational level of analysis,

and using NIS as a social institutional level, the model developed by Dillard et al.

(2004) combines both frameworks. The model “argues for an institutionalization

process by hierarchically linking political and economic level with organizational level

through the organizational field” (Wickramasinghe and Alawattage, 2007: 432). Dillard

et al. (2004) model considers the fact that at the level of ‘old institutional theorists’

there is negligence of macro-level analysis and at the level of ‘new institutional

theorists’ there is negligence of micro-level analysis. Thus, the model highlights the

socio-economic and political context and more directly addresses the dynamics of

enacting, embedding and changing organizational features and processes (Dillard et al.,

2004).

Dillard et al. (2004) developed a “multilevel representation of the dynamics

associated with the institutionalization process; the framework represents continual,

dynamic change and the significant influence of historical, social and political factors in

the institutionalization and deinstitutionalization of practices” (Dillard et al., 2004: 511-

512). Figure 1 presents the institutional relational dynamics model (Dillard et al., 2004),

where the process of institutionalization proceeding in a recursively cascading manner

along three levels of socio-historical relationships, can be visualized. The economic and

political level (PE) establishes norms and values which are disseminated to society and

organizational fields (OF). This second level includes socio-economic configurations

such as industry groups, professional institutes or geographical collectives. At the

organizational level, institutions are viewed as independent variables (DiMaggio and

Powell, 1991) or as “structural properties which comprise the taken-for-granted

assumptions about the way of doing things, which shape and constrain the rules and

routines, and determine the meanings, values, and also powers of the individual actors”

(Burns and Scapens, 2000: 11).

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Economic & Political Level (PE)

Organizational Field

Level (OF)

Organizational Level

Ci = Criteria

Pi = Practice

Figure 1- Institutional relational dynamics model

Source: Dillard et al., 2004, p. 512.

OF level plays a significant role as an intermediate unit between organizational

level (including individual actors) and PE level (including systems of societal and trans-

societal actors). The concept of OF also “expands the framework of analytic attention to

encompass relevant actors, institutional logics and governance structures that empower

and constrain the actions of participants in a delimited social sphere” (Scott, 2008: 208).

There is a possibility that institutions might be created and modified through

actions of individuals and/or groups of individuals. However, in a hierarchy sequence,

PE level influences and provides the foundations for OF level institutions.

CPE Power

Distribution

COF = f(CPE)

POF = f(COF)

Innovators (I)

Late Adopters (LA)

PI = f(POF) &/or f(COF)

PLA = f(PI) &/or f(COF)

P’OF

C’OF

C’PE

Power

Distribution’

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Complementarily, “the organizational field provides the context for the institutions

confronted by and embedded in organizations” (Dillard et al., 2004: 513).

The recursive institutionalization process can be contextualized by taken-for-

granted norms and practices. PE systems use symbolic and sense making criteria (CPE)

in instituting legitimate norms and practices, which “tend to be strongly influenced by

powerful coalitions and represent the macro context for resource allocation” (Dillard et

al., 2004: 513). The social, economic and political parameters stem from PE level and

enter the OF level through organizational field criteria (COF), which is influenced by

CPE. At the OF level, operating practices (POF) are a function of COF and legitimate the

actions at the organizational level. At this level, organizations can be characterized as

innovators (I), which are the organizations which develop new organizational practices

(PI), or as late adopters (LA), which are those organizations that adopt the practices

(PLA) of the innovator organizations. Practices of late adopters are influenced and may

be legitimated by both the success of innovator’s practices and the organizational field

practices and criteria. Late adopters may integrate the innovator’s practice or apply it

but decoupling from processes actually used (Dillard et al., 2004).

At the organizational level, beyond the influence and affection by the

environment, organizations can also respond in a creative and strategic way and “can

sometimes counter, curb, circumvent or redefine the demands” from the environment;

“collective action does not preclude individual attempts to reinterpret, manipulate,

challenge, or defy the authoritative claims made on them. Organizations are creatures of

their institutional environments, but most modern organizations are constituted as active

players, not passive pawns” (Scott, 2008: 178). In Dillard et al. (2004) model, the

dualistic nature and the recursive aspect of the institutionalization process implicate the

reversal of the cascade, as it can be seen in Figure 1. Thus, “reflexive agents within the

organizations rise up through the three levels and changes occur in the established order

at the various levels to a greater or lesser extent” (Dillard et al., 2004: 514). The new

innovative practices may therefore modify the legitimate practices (POF) and criteria

(COF) in OF level. Changes at this level in legitimate and accepted practices (P’OF) and

criteria (C’OF) may influence and contribute to a new contextual environment and “may

largely support the earlier accepted practices and criteria with some small evolutionary

change, or they may involve larger or even on occasion revolutionary change; these new

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OF practices (P’OF) and criteria (C’OF) will also influence the political and economic

system criteria (C’PE)” (ibid.).

In Dillard et al. (2004) model, change can occur if there is conflict in the revision

of taken-for granted norms, values and beliefs, where the institutionalization process

allows for continuity (Cruz et al., 2009). The institutionalization process identified in

this model is a framework which can help the framing of change processes in an

organization context where “institutional forces shape and are shaped by organizational

actions…organizational fields are affected by societal (and organizational) level

phenomena, and organizations operate within fields that shape, constrain and empower

them, but are also influenced by the interests and activities of their own participants”

(Scott, 2008: 178, 214). Following Scott (2008), the studies that examine the interplay

of these top-down and bottom-up processes are the most interesting institutional studies

(see also Zucker, 1991).

These recent studies (Dillard et al. 2004; Ribeiro and Scapens, 2006; Scott, 2008)

point out to a combination and integration of both frameworks (NIS and OIE), i.e. the

consideration of macro and micro-levels in an institutionalization process. This

assumption derives from the fact that action and processes constitute determinant

factors to explain change in organizations. However, the internal dynamics of change at

the organization level have been understudied. In organizations, actors influence the

institutionalization process, but mainly with a reaction to pressures and trends from the

organizational context and the environment, which may be classified as convergent

change (Scott, 2008).

In this perspective, significant critiques have been made (Battilana et al., 2009;

Cruz et al., 2009; Dacin et al., 2002; Hopper and Major, 2007). Basically, researchers

contend that institutional theory has been focusing on the study of the pressures of the

macro-level (global) to the micro-level (local) and of recursive bottom-up influences,

neglecting the study of the internal dynamics of the organizations, which arise

frequently from voluntarism of the actors. These internal dynamics may imply the

implementation of more effective frameworks and outcomes. Zucker (1991) had already

mentioned the importance of these internal dynamics, by stating that “without a solid

cognitive, micro-level foundation, we risk treating institutionalization as a black box at

the organizational level, focusing on content at the exclusion of developing systematic

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explanatory theory of process, conflating institutionalization with resource dependency,

and neglecting institutional variation and persistence” (ibid.: 105).

Moreover, the study of practice that attends to institutional and micro-processual

dynamics and is based on more grounded forms of intra-organizational research, must

be highlighted (Lounsbury, 2008). Following this, Hopper and Major (2007) propose an

extended model of the institutional relational dynamics model of Dillard et al. (2004),

because it “accommodated many features of institutionalization but needed extension to

incorporate the public interest, the role of boundary spanners across social levels and

how intra-organizational factors and properties of the technology derived following

translation and praxis play a part” (Hopper and Major, 2007: 59). In fact, although

relatively robust, the model did not embrace all the observations of the case study

analyzed by these authors. Concretely, the “model is relabeled intra-organizational to

incorporate organizational dynamics associated with multiple, competing rationalities,

power and material issues” (Hopper and Major, 2007: 89). Operating and legitimate

practices (POF) in Dillard et al. (2004) model are translated into a working practice (P)

enacted at intra-organizational level. Concluding, NIS macro-explanations of

organizational similarity must incorporate a micro-level dynamic that focuses on

practice, action and interaction and helps to explain agency, diversity and change

(Hopper and Major, 2007).

Focusing more on actors and practices, institutional analysis has been directed

more recently to the study of organizational heterogeneity and practice

variation/diversity (Lounsbury, 2001, 2008; see also Ezzamel et al., 2012).

Furthermore, “the notion of performativity highlights how there is always a good deal

of natural practice variety that results from the idiosyncratic performance of actors as

they enact a particular practice” (Lounsbury, 2008: 356; see also Lounsbury and

Crumley, 2007).

However, a gap exists and more studies are needed that connect institutional

change to variation in the scope of organizational practices (Lounsbury, 2001; see also

Ezzamel et al., 2012). Moreover, practice variation must be studied and “institutional

theorists may be able to identify some boundary conditions that demarcate when and

where isomorphic processes are expected to operate and the degree to which certain

practices will become more or less institutionalized” (ibid.: 53). New insights into

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practice variation and the dynamics of practice also derive from the assumption that

fields are comprised of multiple logics. These multiple logics can create diversity in

practice by enabling variety in cognitive orientation and emphasize organizational and

intra-organizational research on practice (Lounsbury, 2008). This concept of logics

“refers to broader cultural beliefs and rules that structure cognition and guide decision-

making in a field; at the organizational level logics can focus the attention of key

decision-makers” (Lounsbury, 2007: 289).

The issues of local practice variation and its impact on institutionalization

processes (if and how practice variation can occur) have been the object of study of

some researchers (Cruz et al., 2009; Cruz et al., 2011). Traditionally, institutional

studies have identified convergent (or isomorphic) practices with external institutional

environments. On the other hand, more recently, studies on institutional formation,

change, power struggles, conflicts, resistance and destruction have emerged. However,

it is possible to observe both convergence with (global) institutional environments and

also practice variation resulting from the adaptation in the (local) organization (Cruz et

al., 2009).

To fully understand the impact of local practice variation, the concepts of

localization and globalization must also be depicted. Globalization “is associated with a

growing diffusion of goods, services, values and technologies around the world, the

consequence of which is the convergence of societies toward a uniform pattern of

economic, political and cultural organizations…and localization is a process through

which heterogeneous practices can emerge to facilitate the homogenizing tendencies of

globalization by complementing, rather than undermining or opposing, it;…localization

is just as powerful as globalization and, furthermore, it is essential for globalization”

(Cruz et al., 2011: 412, 424) (see also Cooper and Ezzamel, 2013; and Robertson, 1995,

who defines globalization as the universalization of particularism – heterogenization).

The inter-relation between globalization and localization is also influenced by the

globalization discourses when they are rendered practical, have material effects, and are

enacted by the sub-units of organizations (Cooper and Ezzamel (2013). These authors

analyzed the importance of external discourses in understanding control systems in

general and the way in which those discourses have impact in the internal practices of

the organization. In fact, a connection may exist between the discursive statements that

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the executives of a company intend to render practicable and the performance of the

firm, of the divisional managers, and of the workers in the shop floor, in general (ibid.).

To this end, the link between globalization and PMS “emphasizes the dynamics

between authority and molestation in showing how molestation is a restraint upon the

invention by authority and how molestation rescues discourse from being an

implausible dream (Cooper and Ezzamel: 312).

Robertson (1995) considers the importance of homogenizers and heterogenizers in

the discussion of globalization. The homogenizers tend to subscribe some sort of notion

of world system, looking basically at the presence of the universal in the particular, and

are directed to convergent development. Heterogenizers, on the other hand, disclaim the

distinction of universal and particular. However, heterogenization (or particularism)

does not exist without homogenization (or universalism) and the processes of

homogenization construct the local (Robertson, 1995) (see also Barrett et al., 2005;

Robertson, 1992). Within the scope of their case study, Cruz et al. (2011: 423) conclude

that “the particularization of universalism (or global) and the universalization of

particularism (or local) were simultaneously present and complementary in the

localization of the global management control systems (MCS)”

Localization is an essential part of globalization in the sense that the local is in

essence included in the global. Localization is neither necessarily in opposition, nor in

tension with globalization. Consequently, Robertson (1995) introduces the concept of

glocalization (replacing preferably the concept of globalization), which “involves the

simultaneity and the interpretation of what are conventionally called the global and the

local or – in more abstract vein – the universal and the particular” (Robertson, 1995:

30). Synthetically, Cruz et al. (2011) express glocalization as “a global outlook adapted

to local conditions” (ibid.: 414). Moreover, the local is best seen as an aspect of the

global, and not as a force resisting or reacting against it; even local variety can result

from an extra-local or global practice, rather than being its counterpoint (Robertson,

1995) (see also Barrett et al., 2005; Marquis and Battilana, 2009). Analyzing their case

study, Cruz et al. (2009) and Cruz et al. (2011) found convergence between the global

goals and the local practices and observed a process of globalization “leading to the

homogenization of management control practices as it was reproduced locally;

however…the locals did not simply reproduce the global MCS, instead they ‘made it

work for them’, and in so doing they reshaped/adapted it; as a result, distinctive

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(heterogeneous) practices emerged…and they were enacted alongside the global MCS”

(Cruz et al., 2011: 424; see also Barrett et al., 2005).

Consequently, “actors in dependent organizations may adapt ‘externally’ imposed

systems when integrating them into internal day-to-day work processes, showing that

practice variation can occur even where local actors do not resist the institutionalization

of the imposed systems” (Cruz et al., 2009: 112-113; see also Cruz et al., 2011, who

link practice variation to localization of global systems). Local practice variations may

even be inevitable when they are needed to implement global systems in a localized way

(Cruz et al., 2009; Cruz et al., 2011).

At the level of public sector, and following NIS research, public sector adoption of

new management accounting systems is shaped by the broader socio-political and

economic environment. Thus, framing in public administration reform (PAR) and

government reform initiatives, public sector organizations also have to respond to

macro-level pressures (Nor-Aziah and Scapens, 2007). “Consequently, a macro

perspective is crucial in understanding public sector reform, but a micro-level analysis

is also needed to explore the dynamic processes of accounting change, which involve

social actions and interactions in individual organizations” (ibid.: 213; see also Ezzamel

et al., 2012; and Modell, 2004, who addresses the need for researchers to explain the

evolution of public sector performance measurement by ‘spanning’ the macro and micro

levels of change analysis).

3. Research methods and methodology

The research method that has been followed in this investigation consists of an

in-depth and longitudinal case study embracing the time period from the early 2000s to

2011. Globally, the aim of the research is to analyze how a specific organization

(IGFSS) dealt with powerful external forces and trends for changing its MAS and how

the dynamics of accounting change can be explained by institutional theory.

Consequently, the purpose includes theorizing from the findings that are expected to be

found. Thus, the case study is basically explanatory, as existing theory is used to

understand and explain the specific (Ryan et al., 2002). Complementarily, following

Keating (1995) framework, the case study is categorized as an illustrative study

16

(illustrating a specific theory), in a broad categorization of theory refinement case

studies. Using this framework, the categorization depends on “what the findings of a

study suggest in theoretical terms” (Vaivio, 2007: 432). An illustrative study should

also ‘go a step further’ and develop the adopted theory in the light of the empirical

evidence (Vaivio, 2007).

The research was conducted between January 2010 and February 2012 and

comprised three phases. The first phase of the investigation encompassed a pilot study

in IGFSS from January to May 2010. Twenty-four interviews were conducted in this

phase. Interviews were conducted in the several business units of organization chart

(headquarters), as well as in decentralized departments. Consequently, a large number

of interviews were conducted in this phase, and the output obtained surpassed the

traditional pilot study (see Appendix).

The twenty-four interviews conducted in the pilot study lasted thirty-four hours.

The average was one hour and 25 minutes per interview. With the exception of one

interview (a representative of the BSC software supplier), all the interviews in this stage

were conducted inside the organization. Sixteen interviews occurred in the headquarters

and seven took place in the decentralized debt recovery local services (DRLS)

(integrating the debt management – DM - department) all over the country – managers

of Lisboa2 (twice), Porto, Aveiro, Leiria, Setúbal and Beja. In the headquarters, six

interviews encompassed managers of the board support (BS) department. The other ten

interviews in the headquarters encompassed managers and technicians of the following

departments – DM (two interviews); budget and account (two interviews); financial

management (one interview); real estate (RE) (three interviews); technical support (two

interviews).

The second phase of the investigation began in October 2010 and lasted till April

2011. The purpose was to generate evidence that could help to answer the research

questions drawn by the pilot study. Eleven interviews were conducted; interviews

provided insightful data on IGFSS practices and allowed for the comprehension of the

influences and impact from upper institutions that embrace the organization. Concretely,

those eleven interviews lasted fourteen hours and forty minutes (an average of one hour

and twenty minutes), and were conducted inside (six interviews) and outside the

organization (five interviews). The interviews conducted inside IGFSS encompassed the

17

BS department managers (three interviews), the members of the BD (two interviews)

and the representative of IGFSS in the quality program group (QPG) (also a human

resources department manager). Outside the organization, interviews were conducted

with former members of the BD (two interviews), with a Portuguese member of the

European Union quality steering group (EUQSG)4 (two interviews), and with a former

minister of MSSL in the period between 2004 and 2005.

The third and last phase of the research took place between September 2011 and

February 2012, and the main objective was to find explanations and answers to the

research questions (which were reassessed and re-defined at the end of the second

phase). A twofold set of research questions were posed: i) how did IGFSS respond to

the external pressures and trends for changing its MAS?; and ii) how does institutional

theory explain the dynamics of MAS change in IGFSS? In this phase, twelve interviews

were conducted, eight inside the organization (three in the headquarters and five in the

decentralized DRLS) and four outside. In the headquarters, the interviews encompassed

the chief executive officer (CEO) and two department managers (DM and RE). The

DRLS managers interviewed were: Leiria2, Santarém, Porto, Aveiro and Lisboa1.

Outside IGFSS the interviews were conducted with the existing Secretary of State

(MSSL) head of office, with the former minister of MSSL, with his permanent secretary

and with another Portuguese member of the EUQSG (also coordinator of QPG). These

twelve interviews lasted fourteen hours and forty minutes, implying an average of one

hour and thirteen minutes per interview.

The research has followed the main research steps delineated by Scapens (1990),

Ryan et al. (2002) and Yin (2009) to conduct a case study, which are: i) Developing a

research design; ii) Preparing to collect data and evidence; iii) Collecting evidence; iv)

Assessing evidence; v) Identifying and explaining patterns; vi) Theory development;

vii) Report writing. The steps have not been followed sequentially but interactively.

Research design is the “the logic that links the data to be collected (and the

conclusions to be drawn) to the initial questions of the study” (Yin, 2009: 24). Thus, a

preliminary research design was prepared to support the pilot study. After the first three

interviews (in January) with the head of the department responsible for the management

control model (BS department), decision was taken to advance with a pilot study.

4 EUQSG was the working group which created and launched CAF.

18

Concluding for its scientific interest, the final decision to advance with this research

project was taken. There was no need to sign a specific research protocol, but

authorization from the Board of the organization was granted through e-mails

exchanged with the researcher.

The collection of evidence comprised interviews to employees of the organization

(mainly managers and technicians) and to actors located at the PE level, and at the OF

level (Dillard et al., 2004). In total, forty-seven interviews were conducted, involving

twenty-six interviewees (see Appendix). These interviews lasted 63 hours and 20

minutes, which implies an average of one hour and 20 minutes per interview. The range

was from 30 minutes to two hours. Thirty-seven interviews were conducted in IGFSS

and ten outside the organization. Considering the interviews in the organization, twenty-

five were conducted in headquarters and twelve in decentralized DRLS throughout the

country. Considering the interviews outside the organization, one was conducted in

Quidgest (the supplier of BSC framework), four involved the MSSL (including the

former minister), three involved the European Union (EU) (the Portuguese members of

the EUQSG) and two involved former members of the board.

All the interviews in decentralized DRLS comprised head managers (nine) of the

service, but in headquarters the interviews involved three members of the Board

(including the CEO), eight top managers, one middle manager and five technicians. In

some situations, more than one interview was conducted to interviewees. This was the

case when time was not sufficient to conclude the interview in a profitable way or when

it was necessary to specify and clarify important questions. Most of the interviewees are

operational managers who use management information to support decision-making,

but there are also in the sample five producers of information.

Interviews were considered the most important source of data and evidence.

Generally, the interviews were semi-structured. A guide and some initial structured

questions supported the development of the interviews. Some interviews were

unstructured, mainly the ones involving the ‘producers’ of information – BS top and

middle managers.

Direct and non-direct questions were posed, depending on the purpose of the

researcher that collected evidence – to obtain quick and assertive answers, or to provoke

19

a developed reasoning. Usually, an open-ended discussion was carried out, so that

interviewees could express their own experience and perspective. Sometimes,

interviewees were encouraged to speak freely about what they thought about the new

management control systems, how these systems were implemented, and were affecting

them in their daily activities.

Most of the interviews were tape-recorded and transcribed. Only nine interviews

were not tape-recorded - the two initial ones with the BS department top manager (when

decision of going ahead with the case study was not yet taken); two with the former

minister; three in situations where there were no logistic conditions for tape recording,

and two where the interviewees explicitly required not tape-recording. Interviews were

conducted in Portuguese – the mother tongue of the interviewees, and the transcriptions

of the recorded ones were also in Portuguese. This procedure was held to ensure that

idiomatic expressions and specific meanings were not lost when analysing data.

Furthermore, some telephone and follow-up mail contacts were made in order to specify

short questions and to clear up some doubts.

Documentation was collected inside and outside the organization since the first

phase (pilot study). Inside IGFSS, the documentation and written material consulted

were: i) strategic plans 2010-2012 and 2013-2015; ii) annual financial reports (2003-

2012); iii) annual activity reports (2003-2012); iv) annual activity plans and budgets

(2004-2013); v) intranet newsletters; vi) documents and power-point presentations and

videos available in seminars and workshops about IGFSS, quality management, CAF,

new management model, BSC, internal communication, change management,

organizational culture; vii) newspaper/newsletter articles and news about the quality

program, the management model, the BSC framework, the quality awards, the results

and outcomes obtained; viii) organizational chart; ix) performance and management

control frameworks; x) BSC framework and its support documentation (including direct

observation); xi) strategy maps related to BSC and comprising the corporate and

department maps; xii) IGFSS site; xiii) mission charter (2005-2008); xiv) management

contract (2009-2012); xv) quality manual; xv) management control reports, including

BSC reports (2004-2012); xvi) internal and external satisfaction questionnaires; xvii)

partnership list.

20

Outside the organization documentation collected comprised the upper levels of

IGFSS (PE and OF levels): i) Common assessment framework (CAF) and European

Foundation for Quality and Management (EFQM) documentation; ii) EU

documentation, in particular reports and evaluation of public administration disclosed

by the European Public Administration Network (EUPAN) and the European Institute

of Public Administration (EIPA); iii) Organization for Economic Co-operation and

Development (OECD) documentation, in particular the report “Administration as

service, the public as client”; iv) Lisbon Strategy documentation; v) the US report of the

National Performance Review (‘Al Gore report’) and complementary reports and books;

vi) ISO 9001; vii) Public Administration Reform report (1994); viii) Governmental

legislation (SIADAP 2004 (law 10/2004); SIADAP 2007 (law 66-B/2007)).

Following Yin (2009) recommendations, some principles have been followed

during the research to assess evidence, in order to assure validity and reliability. Firstly,

multiple sources of evidence have been used. Secondly, a case study database was

created, in order to facilitate the management of data (in particular, the transcription of

the interviews) and the identification of patterns. Finally, a chain of evidence was

maintained. As a way to guarantee the quality of evidence, triangulation was made

whenever possible, concerning sources of information, data, and the use of different

methods (basically interviews and written documentation).

Identifying and explaining patterns is a complex but very important stage when

developing case studies (Eisenhardt, 1989; Miles and Huberman, 1994; Yin, 2009).

Considering that the interviews were the main source of evidence to help in the

identification and explanation of patterns, most of the interviews were tape-recorded

and transcribed. When conducting interviews, notes and observations were produced by

the researcher when some situations were visualized (gestures of the interviewees or

emphasis in response). When necessary, additional notes were taken immediately after

the end of each interview. Moreover, after each interview, the quality of tape-recording

was confirmed and, after transcription of the interviews, specific cardboards were

produced to support the analysis, summarizing and organizing the answers in themes

and including reflective and marginal remarks to facilitate the generation of patterns

(Miles and Huberman, 1994). This procedure proved to be very useful by helping to

review the conducted interviews, and to prepare the following ones.

21

Beyond the informal contacts (by telephone or e-mail) to specify and clarify

questions and doubts, ’feedback meetings’ took place with interviewees, whenever

necessary. These meetings and contacts were very useful to validate the interpretation

and the theoretical framing by the researcher and to validate the evidence collected.

Thus, the explanations previously raised could be confirmed. Consequently, some

tactics were implemented to test and confirm meanings, assuring the quality of the

conclusions, in order to “help the analyst to see ‘what goes with what’” (Miles and

Huberman, 1994: 245).

4. Case study

4.1. Overview of the organization

IGFSS is a public institute (government agency) that manages the social security

system in Portugal. Its main ‘business’ is to manage the debt from debtors to the whole

social security system. IGFSS develops its activity under the supervision of the MSSL.

This implies that it is integrated into the indirect administration of the state. However,

this institute has administrative and financial autonomy, and manages its own assets.

IGFSS was created in 1977 within the scope of the social security system, which

was still in its early stages in Portugal, but intended to be universal5. In the course of

time, it has become one of the strong pillars of the sustainability of the financial system.

IGFSS activity is divided into four different business units: i) budget and account

of the social security system, in general; ii) debt management; iii) real estate; and iv)

financial management. The main activity is the recovering and management of debts

from debtors to the whole social security system. It includes coercive collection and,

today, it manages almost two million processes of debt collection. The institute also

manages specific processes of extraordinary companies’ recovery, including extra-

judicial proceedings. These proceedings contribute significantly to the recovery and

viability of companies in a difficult economic and/or financial situation. These activities

represent the main financial outcome of the organization.

5 ‘Universal’ means that the aim for the social security system was to comprise the whole population.

22

Another important business unit concerns the management of nearly 4,500 real

estate (in 2012), rented as a ‘social’ or ‘free’ rent. Real estate usually comes from

pledge. This business unit ensures the management of tangible and intangible assets of

the social security system. Moreover, it also develops proceedings of real estate

evaluation and conveyance.

Another business unit manages the whole social security budget, amounting, in

2012, about 36.3 thousand million euros, the second largest annual budget of the

country after state budget. In this area, IGFSS proposes the measures of strategy and

financial policy to adopt within the scope of the social security system, and ensures the

corresponding implementation. IGFSS also manages the financial assets (surplus) of the

whole social security system. The purpose is to optimize the management of the

financial resources of the social security system.

The institute mission encompasses also its contribution to make the global social

security system stronger. Its intervention is decisive in the management of the economic

resources of the system, contributing to its sustainability. Moreover, IGFSS intends to

be a leading institute in the quality of public service.

The IGFSS organizational chart is divided into 4 business units, which correspond

to the operational areas, and 5 support areas. In spite of being organized in a central

structure, the institute has also decentralized services in the nuclear area of debt

management. These services correspond to the DRLS of the social security system. The

organization chart of IGFSS is divided by Support Areas and Business Units,

comprehending the top levels of management (top corporate, first level and second

level).

By the end of 2012, 379 collaborators worked in IGFSS. The figure has decreased

in the last years, in spite of the improvement of main key indicators and outcomes.

4.2. Change process and evolution and implementation of management

accounting and control frameworks

During the 2000s, a process of change has been developed in IGFSS. This process

led to the successive implementation of a MBO process, a quality management program

23

(similar to TQM and a sub-unit of CAF), a BSC, and a strategic plan, among others.

These management tools and frameworks were developed and bundled mainly after

2004/2005.

Just like most public institutes till the beginning of the 2000s, IGFSS used as a

support management model the traditional PA. This mode was orientated to

management of operations and to the accomplishment of legislation. There was no

concern about processes management, outcomes or concept of ‘clients’/citizens or

public service. The management model did not produce consolidated information, and

consequently decision was slow and difficult. As an example, in a process of coercive

debt collection, it took usually one to two years to formalize the process. Thus, the

model was disorganized and reactive. The management of processes was bureaucratic

and work-teams did not work in the same direction.

However, mainly in 2003, a new management philosophy began to be

implemented in order to define preliminary objectives and some performance indicators.

This new philosophy followed also a strong culture towards PAR, implying a

favourable environment, which appeared in Portugal during the 1990s, and in the EU

and other global entities such as OECD. This movement was boosted by different

political Portuguese governments. Monitoring of these indicators and objectives was

based on an excel sheet, managed by a central (in headquarters) staff office, and was

translated into a MBO process (2003/2004). This procedure developed and evolved in

the following years into a clear visualization of objectives and performance indicators,

which lead to a change process, mainly after 2004.

But the changes that occurred in the organization were also a response to

challenges and regulatory demands that came from the upper field levels of the

environment: the PE level and the OF level (Dillard et al., 2004). This is discussed

below.

Pressures and trends from the economic and political level

In 2000, following the ‘production’ of the first version of CAF (a pilot version) by

the EUQSG, a specific work group entitled ‘Innovative Public Services Group (IPSG)’

was created to promote exchanges and cooperation concerning innovative ways of

modernising government and public services in the EU member states. IPSG mission

24

comprehended likewise the conception and evolution of the CAF model. Consequently,

most European Union countries subscribed this framework, which was updated (new

versions) in 2002, 2006 and 2013.

‘The CAF is a tool developed in the European Union in 1998/2000 and applied in several

European countries. The ‘creation’ of CAF is closely linked to a European Union Quality

Steering Group (EUQSG) which appeared in 1998 with the aim of introducing new

developments concerning PAM. The members of this group were the countries that would

assume the Presidency of the EU between 1998 (second semester) and 2002 (first

semester) – Germany, France, Finland, Portugal, and Austria. Considering its experience

with EFQM and new public management, Great Britain also participated as observer. To

support technically the Group, the European Commission, European Institute for Public

Administration (EIPA), EFQM and the Speyer Academy (Germany) were also

represented’ (member of EUQSG, December 2010; see also EIPA, www.eipa.eu/CAF).

The CAF was inspired by the model for excellence (EFQM) but translates a

simpler model applied to PAM. CAF is a tool to assist European public-sector

organisations in the use of quality management techniques to improve their

performance. The CAF directs to outputs as organisational performance,

citizens/customers, which are achieved through leadership driving strategy and

planning, people, partnerships, resources and processes (EIPA, www.eipa.eu/CAF).

CAF was built on NPM, directed to quality and performance measurement (Staes and

Thijs, 2010; see also EIPA, www.eipa.eu/CAF; this statement was also mentioned by

several interviewees). The CAF is also closely linked to TQM, introducing public

administrations to the principles of TQM. Among its purposes, it facilitates self-

assessment in public organizations and promotes benchmarking between European

public organizations (EIPA, www.eipa.eu/CAF; see also Staes and Thijs, 2010).

The Portuguese member of EUQSG and coordinator of QPG (MSSL) states:

‘CAF was conceived initially as a tool to promote a European award for excellence, in

public administrations in Europe. CAF is an output based on EFQM guidelines and

followed TQM principles such as orienting results for clients/citizens and improving the

quality of rendered services. The aim was to improve quality in European government

agencies. But CAF intended also to achieve performance results similar to private

management, including promoting market-competition’ (February 2012).

25

This statement confirms the link between TQM, CAF and NPM (see also Pollitt,

2009; Staes and Thijs, 2010). Moreover, NPM and TQM were included in the main

themes of the 1st Conference on Quality for Public Administrations in the EU, in

Lisbon, where the pilot version of CAF was presented.

The implementation of quality management frameworks (CAF, quality

manual/TQM, EFQM guidelines, ISO 9001) in Portugal and in IGFSS, in particular, is

strongly influenced by economic and political trends. These trends were basically

identified by some interviewees (the minister of MSSL and the Portuguese members of

EUQSG) Firstly, the OECD approved, in 1986, a report called “Administration as a

service, the public as client” with the aim of improving the relations between the public

and the administration. This report is based on the concept of ‘responsiveness’ for the

public (as clients) as well as for the government. In this report ‘responsiveness’ is

defined as “the administration’s comprehensibility and accessibility; and whether the

administration satisfies, within the constraints of policies, the needs of clients; and the

extent to which clients participate actively in administrative processes” (p. 34).

Concretely, the report mentions explicitly that:

“The broad, institutional arrangements of the public service, at all levels, must be

considered as the essential context for improving administration responsiveness. Public

servants should be motivated, through incentive systems, to be responsive to clients.

Communication with clients and administrative procedures must be designed better to

satisfy the needs and capacities rather than the needs of hierarchy, control and internal

communication” (pp. 64, 94).

Concluding, the report states that:

“Increasing the responsiveness of the public service is a necessary goal of government. It

is necessary because it has become an issue of public concern and because of the extent of

the interdependence between clients and administrations for the achievement of policy

goals in OECD Member countries. Increasing responsiveness means reducing the cost to

industry of its ‘administrative load’ of red tape and paperwork; permitting the

administration to be more flexible in its response to enterprises and the labour force; and

enabling the administration itself to be more flexible in its participation in markets as a

producer and consumer of goods and services. Asking the administration to become

responsive to its clients is asking it to change the values and attitudes to which it has

become conditioned. These attitudes and values, it may be recalled, are positive.

26

Government now has a responsibility to the public to adjust the working of its public

service” (p. 126).

Thus, this OECD report is focused on quality management (quality to service

rendered to public/clients), efficiency, market-driven and reducing of costs and

bureaucracy. It is also oriented towards a NPM mode.

Secondly, specific trends came from the US concerning PAR, namely the

publication of the ‘Al Gore report’ in 1993 (“Government that works better and costs

less”). This report is directed to the creation of a government that works better and costs

less, and was actively followed in Europe, namely in Portugal. Moreover, other

publications were published in the US complementing ‘Al Gore report’, in particular the

books and articles by David Osborne, Ted Gabler and Peter Plastrik (e.g. “Reinventing

Government” (1992); “Banishing Bureaucracy: The Five Strategies for Reinventing

Government (1997)). These reports, books and articles explicitly mention ‘lessons from

private sector’ or the ‘client as customer’, and are linked to NPM.

The ‘Al Gore report’ influenced the quality movement in European public

administrations, including the development of CAF. Al Gore himself was present in the

3rd

Conference on Quality for Public Administrations in the EU, which occurred in

Rotterdam in 2004. In this event the themes analyzed and discussed were, among

others: i) customer orientation; ii) partnership; iii) change management; iv) TQM

models; v) cost-effectiveness; vi) challenges of quality management; vii) relationship

between public sector and civil society; viii) results, experiments and best practices

related to the use of CAF (EIPA, www.eipa.eu/CAF). Complementarily, the ‘Al Gore

report’ had also impact and influenced the quality program developed by the MSSL.

This report also proved to have a significant impact in the public policies in Western

countries.

These trends and movements coming from OECD and the US can be translated

into some key principles:

‘The reports and books related to public administration reform developed in OECD and in

the US (by Al Gore, Osborne and Gaebler) present important statements that can be

synthesized as follows: i) quality must be highlighted, and the clients/customers must be

in the ‘heart’ of the public services; ii) public services must be guided by missions and

27

results, and not by rules, regulations or resources; iii) ‘good’ public administration implies

delegation of authority and active participation of collaborators; iv) the market

mechanisms should be used only if their rules and principles assure a better service; v)

partnerships must be fostered between the public, the private and the society’ (Portuguese

member of EUQSG, January 2011).

Finally, important trends and guidance came from the EU, such as the Lisbon

Strategy (2000), which intended to deal with low productivity and stagnation of

economic growth in the EU comparing with the US. Other trends were visualized in

reports and studies produced by EIPA and EUPAN on European public administration,

quality management, or European policies. The conferences on quality for public

administrations in the EU (every two years, after 2000) always presented also very

significant conclusions regarding public administration policies and guidelines. The

Lisbon Strategy, in particular, was approved by the European council in Lisbon in 2000

and addressed a new strategy and challenge for growth and employment in Europe in

the 2000s. This strategy was the following:

“To become the most competitive and dynamic knowledge-based economy in the world

capable of sustainable economic growth with more and better jobs and greater social

cohesion” (European council, 23 and 24 March 2000 Lisbon, Presidency conclusions,

01/S-2000, Directorate-General for the Presidency, p. 12).

Among others, the key purposes and initiatives of this strategy were basically the

implementation of structural reforms to foster competitiveness and innovation in

Europe, and the co-ordination of macro-economic policies. To achieve this purpose, the

main policies and actions were directed to the modernisation of the European social

model, to the investment in people, and to the modernisation of the State, including the

supply of services for public interest (Lisbon Strategy - Initiatives recommendations,

Economic and Social council, Lisbon, 2005).

Pressures and trends from the organizational field level

In 2003/2004, a MBO process was adopted in IGFSS. The framework was mainly

oriented to results, basically financial but also some non-financial. In 2004, after the

publication of a specific government law (law 10/2004, which implemented SIADAP),

the Government launched a new phase of a public administration reform (PAR). This

reform, being based on SIADAP, followed previous experiences of public

28

administrative modernisation based on accountability and empowering of public

managers, namely EFQM guidelines. This new model of public administration was

based on CAF and followed also the NPM mode. Thus, it was similar to other European

Union countries reforms. Its main concepts were based on performance assessment,

ethics, and the consideration of public service as a mission. The slogan supporting the

reform states: “to serve the customer/citizen, as user of a public service, in an efficient

way”. The purpose was to combine efficiency (optimal use of resources) with

effectiveness (‘to serve and accomplish well’). SIADAP was compulsory by law

(meaning complying with regulatory powers). This system proved to be fundamental

concerning the further steps in the implementation of management accounting and

control systems in IGFSS. Being compulsory, and demanding performance assessment,

SIADAP worked as a trigger to change and to the implementation of management

frameworks in the organisation, BSC in particular. Besides the fact that this system

evaluated organizational performance, it also assessed individual performance of

collaborators.

MSSL was the pioneer on transmitting this project to the institutes and agencies

under its supervision by producing and disclosing a specific and ambitious quality

program (Ministry of Social Security and Labour, 2004). This quality management

program was developed by a QPG, and was based on CAF. Its main goals were, above

all, the emphasis on TQM and on continuous improvement of public services.

Consequently, the focus of the program was basically directed to the client as a

customer, to strong leadership, and to collaborators involvement. Finally, and following

the guidelines of NPM mode, the program explicitly addressed performance evaluation

and measurement (ibid.).

‘The quality program launched by the MSSL was very innovative and intended to

challenge the public institutions under its supervision (17 institutes) to introduce new

concepts and techniques oriented to better performance, results and outcomes. This

program was also followed by EIPA. In the first phase of the launching of the program,

only 2/3 of agencies went ahead with the program. Later, only four or five implemented

the program and also CAF. However, IGFSS was the agency in the MSSL that fully

implemented the program and even went further by implementing TQM, by receiving

high EFQM awards and by implementing a new management model. Other Ministries

tried also to implement a similar program, but only three or four launched later a specific

29

program, as well as some municipalities, more directed to CAF implementation’ (former

minister permanent secretary of MSSL, February 2012).

‘The quality program was based on self-assessment and intended to implement the

structure of enablers and results of CAF, directing the main outcomes to quality

management and to performance measurement. The program followed NPM guidelines’

(coordinator of QPG – MSSL, February 2012).

This quality program was developed by a working team in the sphere of MSSL

and was framed in the PAR taking place in Portugal. PAR was a major concern of

Portuguese governments in the 1990s. Both main political branches (socialists and

social-democrats) prosecuted important measures on this issue. The MSSL quality

program was also strongly influenced by the economic and political level pressures.

‘Within the scope of public administration science, high evolution has occurred. The

reports of OECD on the concerns of public service quality, the Al Gore report and the

studies and reports of Osborne and Gabler, in the 1980s and 1990s, implied a new

direction and new course to administrative knowledge. These guidelines were translated

into the new public management mode which is, today, the mainstream in public

management theory’ (Ministry of Social Security and Labour, 2004).

In 2005, the new BD presented a compromise to the Ministry – the mission

charter, a kind of management contract. This kind of contract was introduced by the

managers’ statute of public companies and, in the scope of PAR in 2004 it was extended

to some government agencies. Its implementation was influenced by CAF and SIADAP,

and followed the NPM paradigm. The mission charter was also compulsory, according

to the public managers’ statute. This statement implies a pressure from the

organizational field level (linked to PAR in Portugal) but, being a compromise of the

organization BD, it is, in fact, an output of IGFSS. The mission charter defined the key

objectives and targets to achieve during their tenure. Strategically, they strongly

emphasized the importance to develop, at all organization levels, a culture aiming at

results, considering it as the pillar of the management system which was intended to

implement. Supported in this mission charter, six strategic initiatives and seventeen key

performance objectives (financial and non-financial) for the period 2005/2008 were

publically assumed by the board.

30

In general, the six initiatives referred to optimization of procedures, operations,

financial planning, debt management and real estate management, beyond the

consolidation and optimization of the management frameworks of IGFSS. The

seventeen objectives can be divided into five groups: i) quantitative financial indicators

(and results); ii) quantitative operational indicators at the level of debt collection and

real estate management; iii) implementation of an intra-communication plan and

management control frameworks; iv) diffusion of satisfaction questionnaires; v) quality

certification and awards (e.g. ISO 9001 and EFQM “Committed to Excellence”).

As a conducting wire of managers and collaborators performance, the mission

charter of the first tenure defined right from the beginning, beyond the nuclear

objectives, the institutional vision and mission. Moreover, the BD took the initiative to

define a specific strategy aiming at a global positioning of the organization concerning:

debt management and dialog policy with partners. Consequently, a change process was

clearly assumed by the BD, through which it was intended to create and stimulate a

culture of results and performance.

In 2007, a second version of SIADAP was published as legislation (law 66-

B/2007, in December) with the purpose of implementation in 2008. The second

SIADAP was divided into three frameworks. The first framework consists of SIADAP

1, which intends to assess the performance of the organization as a whole as well as the

top management (BD). SIADAP 2 assesses the managers of the organization, and

SIADAP 3 assesses the collaborators individually. Concerning public services

performance assessment, a new reference was created, the QUAR, which correspond

broadly to SIADAP 1. This second SIADAP, including QUAR, is a compulsory tool.

This scorecard comprises the definition of a mission and the definition of strategic and

operational objectives. To measure performance, indicators are defined, as well as the

respective sources of information.

At the beginning of 2009, a new compulsory management contract (updating the

mission charter) was signed between the BD and the Ministry, following the favourable

results obtained so far (e.g. increase in debt collections, 367.9 million euros in 2008 vs.

55 million in 2004; increase in clients satisfied, 75% in 2008 vs. 64% in 2006; quality

management awards – EFQM and others). This new management contract is an output

of IGFSS, and reinforces the mission, the vision and institutional core values, and the

31

key objectives defined for the tenure 2009-2012. Beyond six strategic key initiatives,

linked to a new management model and the development of the model of debt

collection, six objectives (four financial and two linked to quality management,

including keeping up ISO 9001 certification) and nine indicators and respective targets

were identified. The indicators and targets follow the BSC approach and indicate three

different levels of achievement – target, above target and under target.

How did IGFSS react to pressures and trends from the upper field levels

PAR was a fashion in Portugal in the 1990s and, when CAF was launched in

several ministries in the early 2000s, some government agencies reacted in a favourable

way to the challenge. Later, in 2004, a new phase of PAR was developed in Portugal

(first SIADAP). In particular, the MSSL developed and disclosed to all institutes under

its supervision, in 2004, a quality program conceived by a specific quality steering

group (QSG), created under the direct supervision of the Minister himself. This quality

program followed EFQM guidelines and was very similar to TQM. PAR and CAF (also

associated to economic and political level trends from OECD, the US - e.g. Al Gore

report, and the EU - e.g. Lisbon Strategy) were the two main triggers of the

development of a deep change process in IGFSS in the following years, translated into

the implementation of a new management model and management accounting and

control innovations. Considering the response to the challenges of pressures and trends

that was put in practice, a convergent change process was developed.

Beyond its governmental initiative and orientation, IGFSS faced these reforms and

initiatives as a challenge. IFGSS reviewed its management tools and began a process of

modernity and development. The new BD designated in 2004 responded to the

challenges with voluntarism. First, as a relevant step, CAF began to be implemented in

the organization.

Later in that year, BS, a staff department (as a back support of the BD) was

created, in order to manage the initiatives and the changes associated with the

management model. This department was a key issue in the implementation of the new

management model and its staff included one top manager, one middle manager and

two technicians.

32

‘The BS team was the leader of the process; the team was multidisciplinary – the basis

was the quality group and the organizational functions under our supervision were

initially management control, communication, training and also intellectual capital (head

talents management)’ (head of BS department, May 2010).

Another relevant step of the change process consisted of the definition of the

vision, translated into an ambitious target: “To be an institute leader in the quality of

public service”. This vision, on the one hand, aims at the goal of being recognized as a

reference institute by other public organizations in Portugal. On the other hand, it means

the continuous improvement of the management quality system and the satisfaction of

clients/citizens’ needs. Thus, this vision meant the beginning of a road to build an image

of higher rigour and trust as far as its clients and the society in general are concerned.

This vision went much further than what was established by the compulsoriness of some

frameworks (SIADAP/QUAR and the management contract) and the challenge of

CAF/quality program.

At the end of 2005, when CAF was fully implemented in the organization, IGFSS

adopted the BSC methodology in an embryonic state, strongly sponsored by the BD. It

proved to be much more efficient and user-friendly than the previous MBO framework.

The main initial objective was to implement this innovative framework in a way it could

support the activity plan for 2006 and respond to the regulatory demands of SIADAP

and of the mission charter (the compromise with the Ministry in 2005). Consequently, it

was implemented as a way to refine the performance evaluation system and to carry out

an integrated tool of the several frameworks and indicators disseminated in the

organization. BSC was, at the time, a very well-known tool in Western countries,

including Portugal. Several seminars and workshops took place in Portugal in the

previous years, and some managers in IGFSS were familiar with the tool. Moreover, in

the organization, in 2005 and 2006, several managers attended seminars about

management in general and management control systems in particular, including the

BSC.

‘The management model is based on BSC and presents indicators that can measure

performance at financial and quality levels management; all collaborators are involved

and know their contribution to the global objectives of the organization; moreover, the

BSC allows the assessment through SIADAP and QUAR, but the framework presents

33

much more data than what is demanded by regulatory SIADAP. The objectives are

aligned using the BSC and, thus, deviations are clearly visualized in a way that regular

corrective measures can be taken. This model also implied the implementation of new

innovative practices’ (DM manager, March 2010).

Consequently, a change process was clearly assumed by the BD, through which it

was intended to create and stimulate a culture of results and performance. Supporting

this purpose, a ‘values charter’ was produced in 2006. In order to carry out this new

culture, management tools were improved. The BSC, as an innovative framework was

launched, implemented and developed in order to become a specific management

control tool, by monitoring and supporting decision-making in the organization. In

practice, to analyse and carry out an assessment of a specific service, deviations and

identification of its causes are also reported. In the scorecard that was implemented,

indicators also allow to visualize the degree of the outcomes achieved regularly over

time. This management perspective appeared as a challenge so that the organization

could implement innovative practices and go further than the standardized performance

assessment tools and than what was demanded, in a compulsory way (SIADAP and the

mission charter) or through the challenge of CAF and the quality program, by producing

better results and better outcomes. Thus, the management model and the BSC in

particular exceeded the compulsory or challenge demands.

The new management model implies also a behavioural and organizational

change. An example of the change process concerns the relationship with clients.

Indeed, the client/debtor relationship is, today, under a strong pressure to set right the

debts, because the inherent collector indicator is a key performance indicator (KPI).

Thus, IGFSS is much concerned with the relationship with clients, who became to be

seen as citizens. Another important stance of the organization is the consideration of

public interest and serving the citizen, instead of steering the customer. These new

practices, attitude and philosophy did not occur in the past.

‘A new management model was implemented and we established a compromise with

quality and with a better service to clients as citizens. An objective was clearly settled: the

involvement of all collaborators with an ideal of public service and with the mission of

social security. For our organization, people are in the first place and ‘quality is in

people’, as our quality policy slogan says. All collaborators accede online to results and

34

outcomes, which contributes to their involvement, motivation and satisfaction’ (‘IGFSS

winning change management’ video, March 2011).

‘After the cultural and management philosophy change, IGFSS began to consider the

public service as the citizens. In order to serve well and help citizens, it is crucial that the

collaborator must not be preoccupied with its specific workplace; this means that public

service is not market-driven. To be efficient and provide effectiveness is very important,

but the concept of public service mission is also essential, and to achieve that level, the

collaborators mind must be free and motivated. Today, in Portugal, NPM is still the

mainstream, but that is not the reality. A move to NPS is beginning to spread in Europe

and IGFSS is an example of this new trend’ (Secretary of state head of office - MSSL,

September 2011).

Considering the environment and the relationship with stakeholders, another

objective linked to the BSC implementation was to strengthen the external image of the

organization. The image of an organization implementing and using a tool associated

with pioneering and innovative management practices could help the improvement of

the customers’ satisfaction objective, as well as the services afforded in a perspective of

citizen orientation.

In 2007, the BSC was already full implemented as a framework of strategic

management (strategy maps were already produced), following the change management

evolution. Thus, the BSC efficiently supported the 2007 operational plan. The main goal

was the alignment with the time cycle of budget and planning. The process evolved

simultaneously with the ISO 9001 certification process (processes approach). ISO 9001

is a well-known international quality standard, largely used by organizations which

intend to conform to best practices concerning quality management. Furthermore, ISO

9001 was launched with the aim of getting a better and relevant external image. ISO

9001 was a concrete output framework which allowed more accurate assessment of the

quality program.

Consequently, a quality manual was implemented. This manual is compulsory for

ISO 9001 certification. The implementation of the quality manual followed a specific

consultant advice and its content was richer than the content of traditional quality

manuals. The head of BS department states:

35

‘The auditors who audit and monitor the certifications in our organization, such as ISO

9001 and EFQM awards, mention usually that our quality manual has specific

characteristics which imply that the manual goes further than what is demanded for this

kind of certifications. Some characteristics have been regularly mentioned as being

included in the manual, such as the existence of a strategic definition, the regular planning

of activities, or the implementation of a BSC framework. These frameworks and

procedures really make a significant difference. Moreover, the auditors also found the

effective implementation in the organization of a management control and monitoring

process, including deviations analysis and corrective measures for decision-making. This

management procedure has not been compulsory demanded for ISO 9001 certification.

But other characteristics have been found which go further than what is demanded, such

as the existence of OLA (operational level agreement) indicators, the more profound

description of the chapters , the identification of an organizational manual, or the creation

of a quality council’ (post dated telephone contact, December 2012).

At the level of the quality management program, some events must be strongly

emphasized. Firstly, in 2006, IGFSS obtained an award, the “Committed to Excellence”

of EFQM. This certification was comprised in the key performance indicators which

constitute the targets of the mission charter (2005-2008). This target was established for

2007, but the certification was assigned in 2006. EFQM certifications are the most

important quality certifications in Europe. CAF and the quality program did not demand

such assessment and evaluation. EFQM awards are attributed after an assessment

process takes place. This assessment process is developed under the supervision of an

external audit/APQ6 and is based on the quality program, ISO 9001 (after 2007) and

QUAR (after 2008).

Other important outcomes were obtained in the following years. In 2008, IGFSS

sponsored and participated actively in the ’report of the best companies’ where to work.

In 2009, IGFSS was certified with the “five star Recognized for Excellence” of EFQM

(a higher step than the “Committed for Excellence”, which needs to be confirmed every

two years). The recognition of EFQM “Committed for Excellence” was one of the

targets of the mission charter (2005-2008), not the “Recognized for Excellence”. This

means that the organization exceeded, in practice, what was compulsorily demanded.

IGFSS is, so far, the only Portuguese public organization that obtained this higher level

6 APQ (Associação Portuguesa da Qualidade – Portuguese Quality Association) is the entity responsible

for the assignment of EFQM certifications.

36

of certification. The initiative to follow these EFQM very demanding quality norms and

rules was taken by the BD following a volunteerism stance. In 2010, IGFSS was the

winner of OCI award7 for “best practice in management of change” in Portugal. Finally,

in 2011, IGFSS was again certified with the “five star Recognized for Excellence” of

EFQM, but now scoring higher points (580 vs. 550 in 2009), which means a further step

in obtaining higher EFQM recognitions than what was demanded.

Summing up the events and activities previously mentioned, figure 2 presents a

timeline diagram showing the evolution of the process of implementation of the new

management model and the several management accounting and control products and

frameworks in IGFSS.

Figure 2 - Change process and evolution of management accounting and control

systems

In 2008, after the publication of the law 66-B/2007, the new SIADAP was created

and, beyond the assessment of managers and collaborators (SIADAP 2 and SIADAP 3),

IGFSS as a whole began to be assessed through the QUAR/SIADAP 1. This new

SIADAP was compulsory and the purpose was to measure performance. Consequently,

objectives, indicators and targets were defined, as well as deviations. Moreover, these

components were cascaded through the several hierarchical levels of IGFSS. These

levels are the BD (encompassing the whole organization), the managers and the

collaborators.

7 OCI (Observatório de Comunicação Interna – Internal Communication Observatory) awards the best

management model put in practice in Portugal, and the management model of IGFSS, guided to

excellence and supported on the BSC, was distinguished (the members of the jury are representants of

top companies and organizations in Portugal).

2001-2003 2004 20062005 20082007 2009

PA

PA Reform/

Quality

Programme/CAF

SIADAP

BSC/Support

2006 Plan

ISO 9001

Certification

BSC

Software

New Management

Contract

Recognized for

Excellence 5 Star

(EFQM)

Objectives/

Performance

Indicators

MBO Mission

CharterCommitted to

Excellence

(EFQM)

Strategy

Maps

Report “Best Companies

where to work”

QUAR

(new SIADAP)

Values

Charter

2010

Strategic

Plan

3 years

2011

Recognized for

Excellence 5 Star

(EFQM)

(> score)

OCI

Award

2001-2003 2004 20062005 20082007 2009

PA

PA Reform/

Quality

Programme/CAF

SIADAP

BSC/Support

2006 Plan

ISO 9001

Certification

BSC

Software

New Management

Contract

Recognized for

Excellence 5 Star

(EFQM)

Objectives/

Performance

Indicators

MBO Mission

CharterCommitted to

Excellence

(EFQM)

Strategy

Maps

Report “Best Companies

where to work”

QUAR

(new SIADAP)

Values

Charter

2010

Strategic

Plan

3 years

2011

Recognized for

Excellence 5 Star

(EFQM)

(> score)

OCI

Award

37

IGFSS had already implemented a BSC in 2006/2007 and, consequently, SIADAP

became easier to use. Objectives, indicators, targets, deviations calculations and

analysis, and corrective measures were already a common practice in the organization,

allowing the performance evaluation of all hierarchical levels. The list of objectives and

indicators encompassed the organization as a whole and was much larger than the

compulsory demands of SIADAP. Thus, in 2008, taking advantage of the previous

experience with the first SIADAP, and from the full implementation of the BSC, the

results and outcomes associated with the law 66-B/2007 and the QUAR were easily

obtained. This means that IGFSS, by implementing the BSC, developed management

practices that went further than what was demanded by the first SIADAP (in 2004). On

the other hand, considering that the implementation occurred previously to the second

SIADAP/QUAR (in 2008), IGFSS anticipated the compulsory demands of QUAR.

‘We want to be recognized as an example in public administration regarding public

service and excellence in management practices. We have implemented innovative

management accounting and control frameworks that produce results and outcomes that

allow us to manage on time and with effectiveness the organization. The compliance with

the demands of QUAR and of the management contract is effective and we usually

exceed ourselves in decision-making and results. Other government agencies come and

see what we have done. They try to implement in practice a similar approach, by

following our management model’ (CEO, October 2011).

This change process is the way through which IGFSS is creating and stimulating

the culture of orientation to results and outcomes. Supporting this management

philosophy, the organization improved significantly the management frameworks and

the strategic alignment involving all collaborators.

At the beginning of 2009, a new compulsory management contract (updating the

mission charter) was signed between the BD and the Ministry, following the favourable

results and outcomes obtained so far, including efficiency. These outcomes are monthly

controlled by the BSC, facing the objectives listed in the management contract.

Furthermore, IGFSS is also concerned with external image and ‘management of

clients/citizens’. Thus, in some rooms of the facilities, placards are placed indicating

outcomes related to quality awards and to clients/citizens’ satisfaction. At this level,

beyond indicators, a placard presents a list of commentaries received from

clients/citizens in relation to the quality of service afforded by IGFSS. In relation to a

38

new attendance policy, pleasant and ‘friendly’ placards in the attendance locations can

also be seen, in order to facilitate the procedures and the posture of the clients. These

indicators are examples of innovative practices which were implemented so that IGFSS

could obtain the quality awards and certifications previously mentioned (some of them

not demanded by the upper field levels).

‘Concerning management frameworks, IGFSS is above all public organizations I know;

our frameworks are very effective, and so they induce higher productivity”, and “the

frameworks linked to quality certifications and awards are very relevant to the success of

the organization’(Two DRLS managers, December 2011).

By the end of 2009, IGFSS concluded that the several management control

innovations (MBO, quality program/TQM, BSC, SIADAP, CAF/EFQM) evolved,

developed and have been integrated in the course of time. Thus, a strategic plan was

approved for 2010-2012, integrating all the frameworks and translating the

organizational strategy into short term objectives. Strategic plans have not been applied,

in general, by public sector organizations (as some interviewees stated). Furthermore,

the pressures and trends on IGFSS did not include strategy plans. Thus, this was also an

innovative framework which transcended the demands for the organization. These

procedures allowed the organization to have full and easy access to indicators and

outcomes that allowed performance assessment using the BSC. This access is extensive

to all levels of the organization. All collaborators can regularly (monthly) consult the

global KPIs and the specific indicators of the inherent department. A middle manager is

very explicit:

‘I cannot live anymore without the BSC; it allows the implementation of continuous

improvement in the organization as a whole and in specific departments and DRLS’

(February 2010).

The new management model and innovative frameworks implemented in IGFSS

were partially followed later by other government agencies of the MSSL and, in few

situations, of other Ministries. The Portuguese member of EUQSG and coordinator of

QPG (MSSL) states:

‘The importance and value-added of the quality program launched by the MSSL were

not perceived by other government agencies under the supervision of the MSSL. When

they realized the value-added of the outcomes visualized in the innovative frameworks

39

of IGFSS, some of those government agencies tried to implement similar frameworks.

Concretely, the quality manual and the way how IGFSS implemented CAF in practice

were followed, but the results and outcomes were not so effective and efficient as in

IGFSS. Very few government agencies under the supervision of other Ministries and

some municipalities also tried to follow the practical case developed in IGFSS, in

particular CAF implementation, but the results obtained were far from being

satisfactory’ (February 2012).

In summary, the evolution of some KPIs is presented as a way to show how the

change process was translated into results and outcomes. First, and most important,

there was an increase in debt collections - 583 million euros in 2012 vs. 66.2 million in

2004. On the financial perspective, IGFSS also presented an increase in financial

balance (surplus), 413 million euros in 2012 vs. 291.2 million in 2004. But good

performance was also extended to non-financial outcomes. For example, the clients

satisfied increased from 64% in 2006 to 82% in 2012, and the collaborators satisfied

increased from 69% in 2006 to 77% in 2012. At the level of quality management,

quality certifications and awards have also been regularly assigned.

5. Discussion and conclusions

The findings show that a deep change process occurred in the organization in the

2000s, more significantly after 2004/2005. Concretely, innovative management

accounting and control frameworks were implemented in IGFSS. A quality

management process (including CAF, quality program/TQM, ISO 9001/quality

certification, or EFQM guidelines) was implemented with strong effects on processes,

rules and working routines. Profound changes in management have occurred,

comprehending processes management, or relationship with clients/citizens. MBO was

firstly implemented and, later, a BSC was launched (in 2005/2006). The implementation

of a BSC implied more accuracy in the definition of objectives, targets and indicators,

properly aligned and spread out through the whole organization, thus involving all

managers and collaborators. This did not happen before. Moreover, the practices

associated with the BSC implied that an effective management process was

implemented, originating the calculation and analysis of deviations, and the introduction

of corrective measures to support decision-making. The adoption of the BSC went much

40

further than what was compulsorily demanded by SIADAP (in 2004/2005) and later by

the second SIAP/QUAR (in 2008), and also by the management contracts as

commitments between the BD and the Ministry. BSC was adopted as a way to achieve

internal purposes of management accounting and control, and it anticipated also, in

2007, the compulsory demands of the second SIADAP/QUAR, scheduled for 2008.

As argued before, this convergent change process that occurred in IGFSS was

implemented as a response to pressures and trends that came from the upper field levels,

particularly the PE level and the OF level (Dillard et al., 2004). These trends (national

and international) are closely linked to organizations which are a part of an

organizational context. Figure 3 shows a diagram of the organizational context in

IGFSS, where management change is visualized.

Drawing on Dillard et al. (2004), three levels are identified – i) the economic and

political level; ii) the organizational field level; and iii) the intra-organizational level. At

the economic and political (PE) level, the trends previously mentioned (OECD, US -

‘Al Gore report’ and others - and EU - Lisbon Strategy and others) influence and have

impact on the lower level, the organizational field (OF) level, consisting of the MSSL in

Portugal. Taking into account that some issues encompass the global public sector in

Portugal, MSSL is added with the reference ‘public sector in Portugal’.

41

Figure 3 – IGFSS management change drawing on Dillard et al. (2004)

These trends induce what happens at the OF level. The output produced at the PE

level (the CAF) induces pressure on the activities of the OF level. The CAF was based

on EFQM assessment model, was developed by the EUQSG, and was disclosed in EU

PE Economic and Political Level

Output • Trends: OECD

US (Al Gore report and others)

EU (Lisbon strategy and others) • CAF

• Trends : PAR in Portugal

OF Organizational Field Level

Output

MSSL/Public Sector in Portugal

• Quality program (TQM)

IO Intra - Organizational Level

IGFSS

Output

• Management contract

(KPI)

• SIADAP/QUAR

compulsory

non - compulsory

• Quality manual

• EFQM awards

• BSC (including monitoring)

• Strategic plan

42

countries in order to improve quality management in public services. There were

Portuguese members in this steering group. On the other hand, the disclosing was made

by the Presidency of the EU. These are sufficient reasons to consider that CAF induces

pressure and is the trigger that leads to the process of organizational change in IGFSS.

CAF was also implemented in the organization.

PAR is a trend developed by successive governments to foster a climate of public

modernization in Portugal in the 1990s and 2000s. The main outputs of the reform were

the first SIADAP (in 2004) and the second SIADAP/QUAR (in 2008). These

frameworks were compulsory, and are visualized in the OF level. The quality program

was an output which followed the guidelines of the reform as well as the structure and

content of CAF. This quality program (not compulsory) was a very important challenge

to IGFSS in order to achieve the purposes of a new management model based on

innovative management accounting and control frameworks. The management contracts

(in 2005-2008 and 2009-2012) were a compromise between the BD of the organization

(at the IO level) and the Ministry, and they were also compulsory. The management

contracts included several objectives and targets, measured by KPIs, financial and non-

financial (including ISO 9001 certification and EFQM “Committed to Excellence”).

The accomplishment of the objectives and targets of the management contracts was

facilitated by the outputs and practices associated with the BSC, which exceeded largely

what was demanded, as it was previously discussed.

Despite the convergent change, practice variation can be identified in the

organization. Some of the local practices were reproduced, such as the SIADAP/QUAR

or the management contracts demands (IGFSS fulfils the requests). However, other

practices were distinctive (reshaped, adapted or innovated), taking the form of practice

variation (Cruz et al., 2009; Cruz et al., 2011; Lounsbury, 2001, 2008). Considering

also the perspectives of multiple logics that can create diversity in practice (Lounsbury,

2008), practice variation was visualized in the implementation of innovative

management accounting and control frameworks, categorized as non-compulsory

outputs at the organizational level (see figure 3). Complementarily, practice variation

can also be analyzed within the scope of the different levels of performance

management and quality management which were implemented in IGFS, as explained

below.

43

Level of performance management

IGFSS exceeded in a significant way the compulsory demands visualized at the

upper field level (MSSL and the public sector in Portugal). First, a new perspective was

translated into strategic definition of vision and the implementation of a strategic plan.

But the most relevant step was the implementation of a BSC, ‘working’ as an effective

management control framework to support decision-making. The practical

implementation and the content of the framework went much further than what was

compulsorily demanded (first SIADAP and management contract). These procedures

and management initiatives were not compulsory. Finally, the BSC anticipated in 2007

the compulsory demands of the second SIADAP/QUAR, scheduled for 2008.

Level of quality management

At the level of quality management, the organization went also further than the regulatory

demands of MSSL. EFQM guidelines and awards exceeded also the compulsory demands

of the management contract. In 2009 (reinforced in 2011), IGFSS was certified with

EFQM “Recognized for Excellence 5 star”, a award much more demanding than the

compulsory “Committed to Excellence”. In a broader scope, the emphasis that the

organization places on a citizen perspective, a characteristic of NPS (Denhardt and

Denhardt, 2000), implies also a distinctive approach facing previous PAM mode of

NPM (where the emphasis is placed on the customer). A different perspective (non-

compulsory) was followed concerning the management philosophy encompassing

PAM. In particular, the guidelines and orientations of collaborators have been directed

mainly to public service and public interest, with the aim of providing a better service to

clients as citizens. Concretely, collaborators were asked to serve citizens instead of

steering customers and, above all, the collaborators must consider public service as a

mission of social security. These are characteristics of NPS that distinguish PAM from

NPM mode (Denhardt and Denhardt, 2000; see also Dunleavy et al., 2005; Osborne,

2006). The public sector in Portugal and the MSSL in particular followed the NPM

logic (at the level of SIADAP/QUAR, CAF, or the quality program).

Level of performance and quality management

Regarding ISO 9001 and the implementation of the corresponding quality manual,

specific characteristics and the content of the manual imply that the organization went

44

much further than what is demanded for this certification. In fact, the demanding ISO

9001 certification in the management contracts implied the implementation of a

common quality manual, based on quality standards. However, IGFSS implemented a

quality manual based on global and local performance of the organization, beyond the

quality paradigm. A different non-compulsory perspective was followed, comparing

with the standards defined at the upper field level, the MSSL.

These statements, which have been presented at three different levels of

management frameworks, imply the full answer to research question number one

(reaction of IGFSS to external pressures and trends for changing its MAS). Practice

variation is associated with the management accounting and control innovations that

were implemented in IGFSS (the local), in response to the trends, norms and rules

identified at the upper levels of the context (the global). These innovative frameworks

are more effective tools to put in practice the norms, rules or pressures that arise in a

top-down process. In sum, insights from Lounsbury (2001), Cruz et al. (2009) and Cruz

et al. (2011) on practice variation were applied to fully analyze the reaction of IGFSS to

pressures for changing its MAS, as a complement of Dillard et al. (2004) model and of

Hopper and Major (2007) revised model.

With respect to research question number two (explanation of the dynamics of

MAS change in IGFSS), the institutionalization process as depicted in figure 3 (framing

in the institutional relational dynamics model - Dillard et al., 2004) allows the analysis

of the internal dynamics of the organization. The internal dynamics of MAS change

were translated into practice variation (Lounsbury, 2001), as previously mentioned.

Several events and actions which occurred in the organization implied the

implementation of new and innovative frameworks, associated with the new

management model of IGFSS. To fully understand the scope and the extent of these

events and actions the concept of multiple logics (Lounsbury, 2008) is used. In fact, the

field site under analysis followed different logics comparing with the logics defined at

the upper field levels.

First of all, regarding compulsory demands from the supervisor ministry, the

organization developed internal dynamics that implied the achievement of outcomes

that went much further than what was demanded. To comply with the assessment of

IGFSS and the BD (defined by law – SIADAP and QUAR), of the managers, and of the

45

collaborators in general, the organization implemented a BSC (including monitoring)

and a strategic plan. The logic supporting this action was voluntarism linked to the need

that IGFSS identified in implementing a management control system to support the

managers’ decision-making process. Moreover, the BSC anticipated and presented, as

outputs of the scorecard, KPI in 2007 that would be only compulsorily demanded in

2008. Regarding the management contract, the outcomes and results obtained also

surpassed the objectives agreed with the ministry, at the financial and also non-financial

levels (e.g. EFQM awards at a higher level than the objective set), as a response to the

logic directed to the image of the organization.

But the organization also showed different logics with respect to other non-

compulsory frameworks. CAF was fully implemented in the organization in such a way

that very high assessment scores were obtained. Consequently, other public

organizations tried to follow similar approaches. But this experience that occurred in

IGFSS implied also a logic directed to quality management that extended the logic

visualized at the upper field levels in CAF framework and also in the quality

program/TQM (MSSL). Concretely a quality manual was implemented going much

further than what was demanded in terms of quality certifications. Complementarily, a

different logic was followed with respect to public administration - the logic of public

service as a mission and emphasizing a citizen perspective (a NPS approach oppositely

to the logic linked to a NPM approach, found in CAF and in the quality program).

Concluding, and answering question number two, the dynamics of MAS change

in IGFSS were translated into practice variation, explained by different logics followed

in the organization, comparing with the logics coming from trends and frameworks of

the upper field levels. To this end, the role of the actors in the field site, as key decision-

makers (Lounsbury, 2007) was crucial to the results and outcomes obtained, namely the

board of directors, the board support department and particularly its head, and the

business unit managers, all involved in a collective process.

46

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50

Appendix - IGFSS Interviews

No.

Interviewee Date Length Status

First phase (pilot)

1 BS Manager 2010.01.15 1h. 55m. Not tape-recorded

2 BS Manager 2010.01.18 1h. 45m. Not tape-recorded

3 BS Manager 2010.01.22 1h. 30m. Tape-recorded

4 DM Technician 2010.02.05 1h. 50m. Tape-recorded

5 BA Technician 2010.02.05 1h. 40m. Tape-recorded

6 BS Middle Manager 2010.02.08 1h. 30m. Tape-recorded

7 AIC (FM) Manager 2010.02.09 1h. 15m. Tape-recorded

8 BS Middle Manager 2010.02.15 1h. 20m. Tape-recorded

9 Ac (BA) Manager 2010.02.17 1h. 30m. Tape-recorded

10 RE Manager 2010.02.19 1h. 50m. Tape-recorded

11 DRLS Lisboa II (DM)

Manager

2010.02.22 50m. Tape-recorded

12 DRLS Aveiro (DM) Manager 2010.02.24 1h. 50m. Tape-recorded

13 DRLS Porto I/II (DM)

Manager

2010.02.24 1h. 35m. Tape-recorded

14 DRLS Lisboa II (DM)

Manager

2010.03.01 1h. 10m. Tape-recorded

15 TS Manager 2010.03.01 1h. 25m. Tape-recorded

16 DM Manager 2010.03.04 1h. 45m. Tape-recorded

17 RE Technician 2010.03.15 45m. Not tape-recorded

18 DRLS Leiria (DM) Manager 2010.03.19 1h. 50m. Tape-recorded

19 RE Technician 2010.03.23 40m. Tape-recorded

20 DRS Setúbal (DM) Manager 2010.03.24 1h. 15m. Tape-recorded

21 DRS Beja (DM) Manager 2010.03.25 1h. 30m. Tape-recorded

22 Quidgest (supplier)

Technician

2010.04.16 50m. Tape-recorded

23 TS Technician 2010.04.28 55m. Tape-recorded

24 BS Manager 2010.05.18 1h. 35m. Tape-recorded

24 interviews 34 hrs.

Second phase

25 BS Manager 2010.10.15 1h. 20m. Tape-recorded

26 BS Middle Manager 2010.11.04 1h. 10m. Tape-recorded

27 BS Middle Manager 2010.11.15 1h. 25m. Tape-recorded

28 Member of Board 2010.11.17 1h. 45m. Tape-recorded

29 Member of Board (Vice

President)

2010.12.15 55m. Tape-recorded

30 Member of EUQSG and QPG

(MSSL)

2010.12.30 1h. 55m. Not tape-recorded

31 Former Minister MSSL 2011.01.04 1h. Not tape-recorded

32 Former Member of Board 1 2011.01.14 1h. 10m. Not tape-recorded

33 Member of EUQSG and QPG

(MSSL)

2011.01.25 2h. Tape-recorded

51

Ac – Accounting AIC – Agreements and Internal Control BA – Budget and Account

BS - Board Support DM – Debt Management DOR – Debt Ordinary Recovery

DRLS – Debt Recovery Local Services FM – Financial Management

HR – Human Resources MSSL – Ministry of Social Security and Labour

EUQSG – European Union Quality Steering Group QPG – Quality Program Group

RE – Real Estate TS – Technical Support

34 HR Manager and Member of

QPG (MSSL)

2011.03.02 1h. 05m. Tape-recorded

35 Former Member of Board 2 2011.04.07 55m. Not tape-recorded

11 interviews 14 hrs. 40 m.

Third phase

36 Secretary of State head of

office (MSSL)

2011.09.28 1h. 10m. Tape-recorded

37 DRLS Leiria (DM) Manager 2011.10.25 1h. 25m. Tape-recorded

38 CEO 2011.10.29 1h. 15m. Tape-recorded

39 DRLS Santarém (DM)

Manager

2011.11.10 1h. 25m. Tape-recorded

40 Former Minister MSSL 2011.11.16 30m. Not tape-recorded

41 RE Manager/RE Technician 2011.11.18 1h. 40m. Tape-recorded

42 DRLS Porto I/II (DM)

Manager

2011.12.06 55m. Tape-recorded

43 DRLS Aveiro (DM) Manager 2011.12.06 1h. 35m. Not tape-recorded

44 DRLS Lisboa I (DM)

Manager

2011.12.28 45m. Tape-recorded

45 DOR (DM) Manager 2012.01.05 50m. Tape-recorded

46 Former Minister permanent

secretary (MSSL)

2012.02.13 55m. Tape-recorded

47 Member of EUQSG and

coordinator of QPG

2012.02.28 2h. 15m. Tape-recorded

12 interviews 14 hrs. 40 m.

Total 47 interviews Total 63 hrs. 20 m.