The Use of Control Systems in Public Sector Organizations: An Empirical Investigation in Dutch Municipalities


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Abstract

The aim of this study is to explain whether the goals of public sector organizations drive the use and effectiveness of attributes of management control systems. Specifically, the focus is on the use of behavioral controls, cultural controls and financial and non-financial results controls; in addition, the study distinguishes between quantity performance (quantities produced, efficiency) and quality performance (employee morale, innovation). The results of a survey of departments of Dutch municipalities indicate that departments with clear and measurable goals tend to rely to a larger extent on cultural controls as well as on financial controls. The use of cultural controls is positively associated with quantity as well as quality performance. The use of financial as well as non-financial controls is positively associated with quantity performance, yet does not affect quality performance. These results suggest that the joint use of cultural controls and result controls in public sector organizations is necessary in order to increase efficiency as well as effectiveness. In other words, the introduction of solely results controls may increase efficiency yet may not improve effectiveness in public sector organizations.
 
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Paolo Perego
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Anna Nöteberg
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