A STUDY OF RESPONSIBILITY ACCOUNTING IN THE COUNTY COUNCIL OF KRONOBERG
Lars-Göran Aidemark
PhD, Associate Professor
School of Management and Economics,
Växjö University,
Sweden
E-mail: Lars-Goran.Aidemark@ehv.vxu.se
The focus of this study is responsibility
accounting and cost control in a County Council (the principal providers of
health care in Sweden). It investigates attempts of managing financial difficulties
in a health care organisation by different accounting reforms. Special
attention is drawn to whether the introduction
of a ”free internal market” could pave the way for responsibility accounting in
a health care organisation. The objective is to understand if and how
accounting reforms influence, and in turn are influenced by, the context.
During the second half of the 1980s,
the accounting deficit increased alarmingly in the Kronoberg County Council. In
1989, the financial situation was disastrous. Day-to-day activities were
financed with borrowed money. However, by 1994 the financial situation had
changed and by 1995, the Kronoberg County Council was in a better financial
state than most councils in Sweden. During this period of time the County Council
had decided to implement several accounting reforms: decentralised budget
responsibility, performance evaluation on a regular basis, buy/sell system,
competition and privatisation.
Four
different conceptual models have informed this inquiry into management control
in Health Care: the institutional theorist’s perspective, agency theory, the
importance of receptive contexts (Pettigrew 1992) and the concept of
”appreciative judgement” (Vickers 1965). Each of these frameworks discloses
different interpretations of the accounting reforms. Among others the study
suggests that decentralised budget responsibility and the buy/sell system are
solutions to different problems.