Medical Managers and their Use of Management Control in Small, but Growing Healthcare Organizations

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Medical Managers and their Use of Management Control

in Small, but Growing Healthcare Organizations

Master Thesis

MSc Business Administration Organization & Management Control Specialization in Healthcare Management

Faculty of Economics and Business University of Groningen

Marloes Dijkstra S2372436 m.dijkstra.49@student.rug.nl

Supervisor: Dr. B. (Ben) Crom Second assessor: Dr. E.G. (Elma) van de Mortel

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ABSTRACT

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Most healthcare organizations in the primary care sector are small organizations. This can be granted to one of the main goals of primary care professionals, namely to ensure easy access for their patients (Sofianopoulou et al., 2012). These organizations are often led by managers who have a medical background. These managers are often referred to as ‘medical managers’, which means that the manager is a healthcare professional from origin (Goodall, 2011). An example of an organization within the primary care sector is the general practice. Within the Netherlands, the general practitioner (GP) has played the gatekeeping role for years in determining which patient has access to which medical service (Jacobs, 1998; ING, 2015; Schäfer et al., 2016; de Eerstelijns, 2017). However, the environment the GP is operating in is undergoing some major changes. Developments in technology and society have led to higher informed and more care-demanding patients and higher quality expectations (ING, 2015). This puts high pressure on the GP to change their work processes in order to meet current demand. It is therefore of societal relevance to define and organize the care around the patient.

In 2016, the composition of general practices in the Netherlands consisted of around 5000 general practices and around 9800 working general practitioners (NIVEL, n.d.), with an average FTE of supporting staff around 1,6 (Landelijke Huisartsen Vereniging, n.d.). These small-scale practices often have an informal work environment with short communication lines. The number of employees a patient comes in contact with is limited, which can be considered efficient and effective since the points of contact are limited and everyone involved knows what is discussed.

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Management control can help medical managers with this new, demanding role. Management control can be defined as the systems, rules, practices, values and other activities management put in place in order to direct employee behavior (Malmi & Brown, 2008). Currently, management control is not widely used in small healthcare organizations. This can be related to the fact that most managers of small healthcare organizations are healthcare professionals and thus, not educated for a management role and are not knowledgeable of different management controls. They learn by doing. However, previous literature found that the use of a performance measurement system (PMS), which is part of management control, has a positive effect on organizational outcomes in hospital environments (Abernethy & Lillis, 2001). This research aims to understand how medical managers use management control within their organization. By analyzing current work processes of a small, but growing healthcare organization and combining these findings with current literature, this research aims to provide new propositions for these organizations on how to use management control.

The use of management control by a medical manager within the primary care sector has not received much attention in current literature (Kirkpatrick et al., 2012). This research aims to be one of the first to explore how a medical manager of a such an organization can use management control. Next to the improvement of management control within these organizations, this research contributes to scientific literature by extending part of the theoretical model of Abernethy et al. (2001) to the primary care environment. This research specifically looks at the influence the attitude a medical manager has towards using management control on the organizational outcomes, within an environment where there recently has been an enlargement of practice.

In order to do so, the following research question is formulated:

How does a medical manager use a management control system in order to achieve higher organizational outcomes within a small, but growing healthcare organization?

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explanations of that phenomenon (Baxter, 2016). In other words, this case study will be used to gain a better understanding of the current situation of a small, but growing healthcare organization. This research uses multiple research methods in order to interpret and complement the survey results.

The remainder of this paper will proceed as follows. First, the theory section reviews the relevant literature, evidence and resulting conceptual model. Second, the case site is discussed, which reveals the current situation and structure of the specific general practice. Third, the research method, data collection and analysis will be described. Fourth, the results of the analysis are presented. Finally, the conclusion and discussion are presented, which includes recommendations, limitations and future research directions.

THEORY

Within this section, relevant literature will be discussed, propositions are formulated and a conceptual model is given. First, the concept of management control will be explained. Next, the origin of medical managers as well as their attitude towards management control will be discussed. This will all be researched in the context of a growing organization, so this factor will be elaborated then. Further, the contribution of the use of management controls to organizational outcomes will be discussed. Finally, a conceptual model is designed to give the reader a visual image of the mutual connections of all variables.

Management control in small healthcare organizations

The concept of management control has been defined differently in previous studies. Malmi et al. (2008) reviewed current literature for these different definitions. They found that different conceptions can be considered when looking at management control. The lack of a clear definition has resulted in different uses and purposes of the same concepts, which sometimes leads to conflicting outcomes (Malmi et al., 2008). Therefore, it is important to have a clear conception of what management control is and how it should be used. After analyzing multiple definitions, the authors came up with the following definition: management controls are the

systems, rules, practices, values and other activities management put in place in order to direct employee behavior (Malmi et al., 2008).

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Management control is designed in such a way that the day-to-day tasks performed by all employees are ensured to come together in a coordinated set of actions which lead to overall goal attainment (Otley et al., 1995; Speklé, 2001; Kastberg et al., 2013). This is primarily the planning and coordination function of management control. Regular observations and achievements reports are part of the monitoring and feedback function of management control (Otley et al., 1995). Both functions should be addressed. Management control systems (MCSs) are designed to ensure that resources are used efficient and effective (Kloot, 1997) and organizational goals are achieved in the same way (Otley, 1980; 1999; Oates, 2015). They assist managers by performing all the control functions of planning, decision-making, motivating, coordinating, communicating objectives, providing feedback and others (Kloot, 1997).

Management control has primarily been used in large healthcare organizations, specifically hospitals (Jacobs, 1998). Though this statement was formulated two decades ago, it still stands today. When first implemented, management accounting and management control led to conflicts between healthcare professionals and management (Jacobs, 1998). However, it is argued that this is mostly related to the hierarchical hospital environment and not so much a general aversion doctors have towards management control. Managers of small healthcare organizations can benefit from management control, which can lead to a different attitude towards MC. This is also what Jacobs (1998) found in his research. The GPs studied in his research actually found this new dimension an extension of their education as a GP and believed it would have a positive outcome on the overall primary care. However, results of existing research are twofold. One stream indicates that healthcare organizations use management control not at all or to a limited extent, where other studies claim that after implementation, management control is used in multiple ways than first intended (Kastberg et al., 2013). One reason for this division is that the organizational structure of general practices received minimal attention in existing literature (Tallia et al., 2003). It is possible that within existing literature, different types of organizations were studied which resulted in different outcomes.

Medical managers in control

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working, as a medical professional. In previous research, this term is also labeled as clinical-oriented managers, doctor managers, clinical leaders or physician-leaders (Fitzgerald et al., 2006; Edmonstone, 2009; Goodall, 2011).

The presence of a medical manager in the board of a healthcare organization often leads to positive organizational outcomes (Xirasagar et al., 2005; Goodall, 2011; King’s Fund, 2012; Veronesi et al., 2013). Medical managers are often considered to be more engaged than regular managers (King’s Fund, 2012) and are more likely to experience greater credibility among peers (Goodall, 2011). And since decision-making is often of collegiate nature, managers with a clinical background have a head start here as well (Ham, 2003). On top of that, clinicians are trained to think in a particular way, with a prime micro-view focus on the patient, and a strong emphasis on individual responsibility (Edmonstone, 2009). They will never forget about the main goal of their profession, namely improving the health of their patients.

Despite these benefits medical managers bring, they may also face some challenges. Within small healthcare organizations, the management team usually consist of one or more healthcare professionals, with a top-down decision-making process (Tallia et al., 2003). This can lead to friction between managers and healthcare professionals with the same profession and other personnel at the subordinate level (Xirasagar et al., 2005). They have to maintain a formal authority towards their colleagues, while also working together with them as peers. These responsibilities as both a healthcare professional and a leader can be conflicting (Fitzgerald et al., 2006).

When managing a healthcare organization, medical managers can use management control to assist them in their management tasks. According to Malmi et al. (2008), there are five categories of controls, namely cultural, planning, cybernetic, reward & compensation and administrative controls. They concluded that management control should be researched as a package, instead of a single item. They argue that these control mechanisms do not operate individually, but act and react to each other. Therefore, this research will combine multiple categories of control, namely the two most present in a small healthcare organization (BRON). These categories are administrative controls and clan controls.

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controls consist of mechanisms and procedures such as authority structures, rules, policies, standard operating procedures, budgets and incentive systems (Hopwood, 1976). Administrative controls enable managers to establish certain role expectations and can help monitor and evaluate employees (Marginson, 2002).

Healthcare professionals, however, prefer to work in an environment where norms and values are created by the profession itself, instead of following rules and procedures (Abernethy et al., 2001). This can be labeled as professional control and is associated with the autonomous nature of the profession (Abernethy & Stoelwinder, 1995; Kurunmaki et al., 2003). Professional control is similar to clan control. Clan controls are part of the cultural controls within the model of Malmi et al. (2008), but were already formulated by Ouchi in 1979. These controls can be defined as the establishment of values and beliefs within a specific group, such as a profession, organizational unit or division, through the use of ceremonies and rituals (Ouchi, 1979). Professional controls occur when professionals have the knowledge and experience to perform complex tasks and are socialized to act independently without any formal or administrative controls (Abernethy et al., 1995; Kastberg & Siverbo, 2013). Clan- and professional controls are based on social- and self-control processes (Abernethy et al., 1995). Social controls are those controls that enhance “social structures and processes that aim to prevent and reduce deviations” (Hollinger and Clark, 1982). Self-controls can be defined as the responsibility the individual takes for his or her work produced (Jaworski and MacInnis, 1989, p. 410). These controls become functional when they are complemented by training implemented by management (Abernethy et al., 1995). However, professional control remains an external form of control (Orlikowski, 1991), thus it will not necessarily be effective to ensure that the organizational values and norms are internalized.

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in social- and self-controls and mastered during the entire education of the healthcare professional and are embedded in the way of working. Administrative controls are often seen as a necessary evil since they form the formal structure of the organization but can lead to added tasks which are deducted from the time available for patients. They will thus be present in the healthcare organization but probably not used to their full extent.

The attitude medical managers will have towards using management control systems is conflicted in existing literature. It can be expected that medical managers will have an open-minded attitude towards using management control, since it can be seen as a way to improve organizational performance (Jacobs, 1998). However, since medical managers often are not trained to be managers, their attitude towards management can be somewhat restrained. They do not know how to implement it and therefore are reserved to use it.

Concluding, medical manager will experience both benefits and challenges in managing their organization. Management controls can assist them, specifically administrative- and clan controls. Within a small healthcare organization, clan controls in the form of professional controls are mostly present. They are reflected in social- and self-controls. The extent to which a medical manager will use these controls depends on the attitude the medical manager has towards them. Therefore, the following proposition has been formulated:

Proposition 1: If medical managers have a positive attitude towards the use of management control, they will use a mix of management controls (mostly social and self-controls).

Growing healthcare organizations

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When a healthcare organization is small, their use of management control is limited. Small businesses rely mostly on traditional income statements and financial ratio analysis when they conduct their performance evaluation (Jänkälä, 2007). Non-financial controls, like social- and self-controls, are moderately used. There are several reasons for this. First, and fairly important, there is a lack of human resources to conduct these controls (Jänkälä, 2007). Second, small firms usually are not so oriented to their long-term planning and monitoring their external environment than the bigger companies are (Jänkälä, 2007). Healthcare organizations will always have work to do, their main goal is to get through the day and help as many patients as possible. They are more focused on the daily activities than the long-term vision. However, management control is believed to be important for small organizations to support operations (Burns & Scapens, 2000). Due to their small size, they are less able to benefit from economies of scale (Aragón-Sánchez & Sánchez-Marín, 2005). In order to work as efficient and effective as possible, personnel has to be employed in such a way that every person can do the work they are supposed to be doing with the least amount of obstruction.

When an organization is growing, it can face some important challenges. One of the main concerns found in existing literature is the ability of the initial founders/managers to manage an organization bigger than what they are essentially used to (McKenna & Oritt, 1981; Greening et al., 1996). The skill set needed for this growth and the evolving larger organization can possibly be different from the skill set needed for managing a small company (McKenna et al., 1981; Greening et al., 1996). Next to this, human resource issues arise as well. These issues include training, information management and the sharpening of communication skills and are essential in making sure the growth process evolves satisfactorily (Greening et al., 1996). Therefore, it can be expected that management control will become more important when an organization is growing and thus the following proposition is formulated:

Proposition 2: When a small healthcare organization is growing in size, the use of management controls will increase as well.

Contribution of controls to organizational outcomes

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(2001) studied the relationships between strategy, internal management structures, performance measurement systems (PMSs) and organizational outcomes. The research was focused on the hospital environment. This research will use part of their model and introduce it to the primary care sector. PMSs are here translated to management controls, since a PMS is a system that executes the measuring of performance using performance indicators in a consistent and complete way (Lohman et al., 2004) and are part of management control. Since this research will pave the way in understanding managing a primary care organization, the choice has been made to look at the overall MC. This will give enough room for the discovery of this concept in this context.

Following the work of Abernethy et al. (2001), the organizational outcomes are divided into effectiveness and efficiency. The choice has been made to make this division in order to gain a multidimensional view of organizational performance (Abernethy et al., 2001).

Effectiveness is related to the outcomes of the internal processes. In the case of a healthcare organization, this is related to the wellbeing of the patients. In a healthcare context, effectiveness can thus be defined as “the extent to which an intervention achieves health improvements” (Purbey et al., 2007, p. 247) and can be measured in different ways. Patient satisfaction is one of them, which can be measured by looking at waiting time (Purbey et al., 2007). Service quality is another way to control for effectiveness. This can be measured by the quality of care provided, quality of clinical investigations, the presence of a quality mark, the cleanliness of the general practice itself etc. (Purbey et al., 2007). Taken these measurements together, the effectiveness of the general practice can be examined in a fairly comprehensive manner.

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Effectiveness Efficiency

Measures Patient satisfaction

- Waiting time Service quality

- Quality of care provided - Quality of clinical

investigations

- Presence of a quality mark - Cleanliness of organization Resource utilization - Utilization of space - Deployment of personnel - Use of materials Cost reduction - Reduced expenditures

(comparable to the previous year) Table 1: Overview of possible measures

Based on the information provided above, proposition 3 is formulated:

Proposition 3: The use of management controls within a healthcare organization will lead to positive organizational outcomes, both on the effectiveness and the efficiency of the organization.

Conceptual model

This research is structured by formulating three propositions. To recap, these propositions are:

Proposition 1: If medical managers have a positive attitude towards the use of management control, they will use a mix of management controls (mostly social and self-controls).

Proposition 2: When a small healthcare organization is growing in size, the use of management controls will increase as well.

Proposition 3: The use of management controls within a healthcare organization will lead to positive organizational outcomes, both on the effectiveness and the efficiency of the organization.

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controls can help managers in structuring their operations and provides them with up-to-date and detailed information about the organization and its performance.

Together, these propositions form the base for the conceptual model. This model is a representation of the relationships between the different propositions. Below, a visual representation of the conceptual model is given:

Figure 1: Conceptual model

Next, this research will explore how these expected relations are reflected in a small, but growing healthcare organization itself. Below, the case site will be explained in more detail.

CASE SITE

The general practice studied in this research is located in the north of the Netherlands, in a rural area. The company is a partnership of two general practices, divided into three practices, with a total of three locations, all of which located in small villages. Figure 2 gives a systematic overview of the structure of the general practice discussed in this research.

General Practice Holding

General Practice A General Practice B

Location X Location Y Location Z

Practice A Practice B1 Practice B2

Figure 2: Organizational structure of General Practice Holding

Combined, the two practices have 31 employees, of whom six are working in both practices. In total, there are two management doctors and six general practitioners, of whom one is in training. The remaining personnel consists of physician assistants, practice assistants and pharmacy assistants and supporting staff. This practice is also a dispensing general practice, thus also has an in-house pharmacy, which is uncommon in the Netherlands. There are also multiple external healthcare providers present within the same building. These providers consist of dietitians, physiotherapists, a speech therapist, a home care provider and specialty

+ P1

+

P3 - Efficiency

+ P2 - Effectiveness

Change in organizational size

Organizational outcomes of the healthcare organization Use of management

controls (mostly social- and self-controls) within a healthcare organization Attitude of medical manager(s)

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nurses. Figure 3a shows the division of the employees of the general practice and figure 3b shows the total amount of employees working per general practice.

General Practice A General Practice A + B General Practice B

Doctors

2 management doctors

1 general practitioner 4 general practitioners

1 general practitioner in training

Medical staff

1 doctor assistant

2 doctor assistants 2 doctor assistants

2 pharmacy assistants 4 pharmacy assistants

1 pharmacy + administrative assistant

1 pharmacy help 1 pharmacy help

1 practice assistant somatic 1 practice assistant mental

health 1 physician assistant 1 physician assistant in training Supporting staff 1 deliverer 1 deliverer 2 cleaners 1 cleaner

Figure 3a: Division of employees by profession

Number of employees only in general practice A 10 Number of employees only in general practice B 15 Number of employees working in A and B 6

Total 31

Figure 3b: Total amount of employees per practice

The practice has grown significantly, due to the takeover of another practice. This takeover was the result of the upcoming threat of the closure of the previous general practice on that location due to retirement. The recent growth of the total general practice has led to a number of challenges. The first three challenges are related to administrative controls, the fourth challenge is related to social controls and the last one relates to the overall use of management control, and especially how both managers are managing their employees.

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teams together, the uniformity of the work processes diminished. This uniformity is important, especially regarding the administrative tasks of the employees. When every employee does this in his or her own way, it becomes possible that another employee cannot figure out what is meant by the first employee. This could lead to mistakes or can take more time than necessary. Second, the general practice is missing a good benchmark to measure their outcomes and compare them. As of now, management finds it difficult to come up with measures they can use to see how well they are doing. Next to that, there is not a “normal standard” readily available for the practice.

Third, the general practice has an informal way of working. This used to work for them when the practice was in one location and relatively small, but as the general practice increases, so does the need for more formal rules. The former informal way of working isn’t sufficient anymore. However, the shift in management style from informal to formal causes friction between management and its employees.

Fourth, the sudden increase in the number of staff members reduced the social cohesion within the group. Due to the increasing number and the fact that most employees work part-time within the practice, the feeling of a team working together is missing. When employees feel like they are working together in a team, it is more likely that they are willing to go the extra mile for an employee when necessary.

Fifth and final, management also has faced some difficulties with carrying out their policies and the changes in these policies towards their employees. Often, changes fail to succeed due to bad communication or lack of a follow-up. Mostly, management communicates orally or by email. When something is communicated orally, the possibility is high that not all employees are being reached due to the huge number of part-time contracts. Also, it is very time-consuming to talk to each employee individually. When something is communicated through email, the risks are that employees do not read the email properly or that they do not understand its content. On top of that, the current way is very unstructured, which makes it unclear for the employees to know when to expect important information.

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METHODOLOGY

Research design

The aim of this study is to gain a deeper understanding of the use of management control within healthcare organizations. Specifically, this research looks at the influence a medical manager has on the use of management controls in the organization. The research method chosen is of qualitative nature, which allows for an examination of people’s experiences in detail (Ritchie & Lewis, 2003; Hennink et al., 2011). It is particularly useful to understand and explore work processes and complex issues, since it studies phenomena in their natural setting. Hence, this research approach is suitable for ‘how’ questions that describe processes or behavior (Ritchie et al., 2003; Hennink et al., 2011). In particular, this study adopts an interpretive approach, which views phenomena in terms of the meanings people bring to them (Hennink et al., 2011). This will give an emic or inside perspective of the research topic (Morey & Luthans, 1984; Henning et al., 2011). Within the interpretive approach, reality is seen as socially constructed as people’s experiences occur within their social, cultural or personal contexts. Thus, it recognizes that perceptions and experiences studied are subjective, and therefore, there is more than one single truth (Henning et al., 2011). This perspective is useful in this research, since its aim is to provide recommendations on how the medical managers of a healthcare organization could use management control. This will be investigated in one general practice, where multiple participants share their experiences and opinions on challenges and possible improvements. These experiences are personal and may not align among participants, therefore, this study will not present a one-size-fits-all solution for how medical managers should use management control. Rather, it gives some propositions for small, but growing healthcare organizations on how they can use management control. In doing so, theory refinement is done in understanding the use of management control within small, but growing healthcare organizations by medical managers.

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As mentioned before, this study is designed as a case study, in which usually multiple data collection methods are combined (Eisenhardt, 1989). In the current research, personal observations, information about the organization available on their website, internal documents, a questionnaire and semi-structured interviews are included.

In understanding the current situation of managing a small healthcare organization by a medical manager, a literature review has been conducted. This literature review discusses the current knowledge on the use of management control within the primary care sector as well as the influence a medical manager has on managing an organization. This theoretical framework served as an input for the research direction and propositions. Furthermore, they were tested in this specific context and were included in the questionnaire and interview guide.

Next, observations were made throughout the study by the researcher. These observations were made during a physical tour through the organization, to see and experience the work-culture of these practices. Other observations were made when the researcher came in contact with different parties of the organization, both from a distance when making appointments as from up close when visiting the practice. These observations were written down in field notes and used to gain a better understanding of the results (Eisenhardt, 1989).

The website was analyzed to make sure some of the observations the researcher made and some of the statements that were said during the interviews were also mentioned on the website. The website is primarily designed for the patients of the general practice to get information about opening hours, working staff and services provided in the practice. It also offers the possibility for patients to submit complaints and/or compliments to the general practice.

Further, internal documents were used to confirm certain statements made during the interviews. These internal documents included a personnel list, minutes of a work meeting and the daily agenda of multiple GPs. Due to the lack of clear financial documentation, these were not included in this research. These documents could have provided further insights into the efficiency and effectivity of the organization. However, the lack of documents available resulted in a limited view on these outcomes.

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questionnaire were mostly related to the communication inside the organization. This choice was made because the implementation of management controls starts with the communication of these implementations. Thus, the questionnaire provides an exploration of relevant themes which the interviews will further elaborate on. The response rate of the questionnaire was 59%. The questionnaire and the outcomes of the questionnaire can be found in appendix 1a and 1b. These themes are added to the interview guides. In this way, a complete and comprehensive view of the atmosphere at the workplace, current situation and possible problems is received. Finally, in-depth, semi-structured interviews were conducted. These semi-structured interviews start with specific questions from the interview guide but allows the participant to introduce topics he or she finds relevant (Blumberg et al., 2014). The choice has been made to conduct interviews, and thus generate the data (Ritchie et al., 2003), to gain a complete understanding of the participants’ perspectives. Ritchie et al. (2003) mention, a key feature of interviews is their in-depth focus on the individual. This is necessary to understand the personal perspective of the interviewee on the research topic.

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Title Description Remarks Interview duration

A Manager and Founder

View of management on current and future situation

Since the merger both participants A and F have reduced their contact with patients in order to focus on their management duties

1:22

B General Practitioner

Experiences in practice and possible improvements

Part-time GP, used to be in training in the general practice

0:26

C General Practitioner

0:28

D General Practitioner

0:23

E Advisor/Physician Assistant

Own role and vision, view on current situation and

experiences in practice

Has an informal advisory role for management and has multiple tasks. Perceived as an extension of MT

1:13

F Manager and Founder

View of management on current and future situation

Since the merger both participants A and F have reduced their contact with patients in order to focus on their management duties

0:43

G General Practitioner

0:31

H General Practitioner

0:24

Figure 4: Characteristics of interviewees

Data analysis

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beforehand, and are based on the literature, the interview guide and professional insights of the researcher. The opinions of the interviewees on these codes are collected during the interviews, and where possible the statements they make about these codes are confirmed using other sources of data. Inductive codes will emerge during the coding process. This approach will ensure most appropriate codes are included in the analysis. The codebook can be found in appendix 6. The codes were labelled in the text, to determine themes and similarities between different transcripts. They were quantified in the form of a table to make comparison possible. As such, the data was interpreted by connecting categories and finding patterns and the results were drawn.

Reliability and validity

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sure the outcomes are generalizable (Johnson, 1997), the study could be expanded to multiple practices. However, due to time and resources constraints this does not seem realistic. Therefore, by interviewing multiple participants of each occupational group, the interviewer aims to gain a more holistic view.

RESULTS

This chapter will present the results from the case study and is structured following the three propositions formulated in the theory section. First, the attitude medical managers have towards the use of management control is discussed, as well as the type of controls they use or are more willing to use. Second, the enlargement of the organization and its effect on the use of management control is elaborated. Third, the relationship between management control and organizational outcomes is discussed, divided into effectivity and efficiency. At the end of each section it is discussed if the proposition still represents the results.

Medical managers and management control

During the interviews, all participants acknowledged the added value of having medically schooled professionals managing the organization. The most listed perks of managers having a medical background were the fact that they fully understand the complete process of the organization and that they have the ability to always put the interests of the patients first. When asked about the way they were leading the organization, both managers acknowledged that there were points of improvements they could make. The management style these managers had adopted, matched their profession, as they are guided by the agenda, where the patients have the leading role.

“I think a (business) manager looks more from an organizational point of view. We are more focused on the substantive aspect of it all. [..] It is hard for us to look forward.”

– interviewee F

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“You do get a confirmation that things are working or not. [..] I think at a certain point, you need to have clear parameters.”

Although both managers acknowledge the benefits of having more information readily available about the organization, they have mixed feelings about using management controls. During the interviews, it became clear that one of the main reasons for their hesitation lies in the origin of their profession. Both managers acknowledged that since they are medically trained, they have not obtained the knowledge to understand and use financial data. This was reflected during the observation that they did not have information available that could support claims they made during the interviews. For instance, when asked about the parameters they used to measure organizational performance, it was often the case that although they intended to measure certain things, these measures were currently not in use.

The concern was also raised during the interviews that the implementation of controls should also fit the organization. Within a small healthcare organization, it is not desirable nor possible to change the organization it into one where every task is monitored and every outcome is measured. Both managers and their advisor mentioned this in their interviews. As interviewee F stated:

“You cannot measure everything, but we are aware of this. It is not the case that doctor assistants are checking their stopwatch to make sure everything is done within the according

time.”

The interviewees acknowledge themselves that this should also not be the aim of the organization. The controls highlighted in this research are administrative controls and clan controls, where the last category is divided into social- and self-controls. In the upcoming section these controls are further discussed.

Administrative controls

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organization is structured in a top-down manner, where the managers are on the top of the pyramid. Their advisor is in between the managers and the GPs, but not fully part of the management team. The GPs are in the middle and the assistants are on the bottom. This organizational structure was confirmed by Figure 5, which is a copy of a figure presented in the minutes of a work meeting and gives a visual representation of this structure.

Figure 5: A visual representation of the organizational structure

When talking to the GPs, it became clear that this structure causes some issues. They explained that although they are personally responsible for the way they provide care to their patients; the assistants are managed by the managers and fall under their medical responsibility. This means that the managers make all the decisions regarding the work processes of the assistants, including those relating to the cooperation between the GPs and the assistants. This was also confirmed by one of the managers, interviewee F, in his interview. He explained that these decisions are then discussed during work meetings, which the GPs are not invited into, since they are divided per profession. He said that this decision was made in order to keep the work meetings as effective and efficient as possible. However, all GPs declared that they want to be included in these meetings. As one of the GPs put it:

“I think it is a good idea for the GPs to be present at the work meetings of the assistants. We work with them on a daily basis and some things are just hard to see when you are above

them.” – interviewee G

The GPs all find this even more important because the control within the organization is experienced as insufficient. This issue was first highlighted in the outcomes of the

Managers

Assistants GPs

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questionnaire, which was issued to the entire medical staff, excluding both managers. Analyzing these outcomes, it became clear that over half of the employees thought the current way of managing could be improved. Currently, the briefing of the employees occurs through multiple channels. The results of the questionnaire show that the organization uses verbal communication, written communication through e-mail, WhatsApp, minutes of work meetings or written protocols and other documents and non-verbal communication such as the presence of the managers. E-mail and verbal communication between employees were mostly used (92%), followed by communications through WhatsApp (85%) and verbal communications by management (62%). It is intended that all information about the organization and its daily operations should be communicated by e-mail and when needed during a work meeting. WhatsApp should only be used for informal, “fun” information, like planning a team activity. This was all explained by both managers. However, to date, this is not yet the case. The participants of the questionnaire found that the things that needed most improvement were related to the briefing of employees and the design of the work meetings. These points of improvement were corroborated by all interviewees. The following quotes reflect how employees are experiencing the current way of managing and the briefing of new information. For confidentiality purposes, the specific interviewee has not been mentioned here.

“I think the fact that they are with the two of them, makes it more difficult. I’m not sure how much they communicate with each other, [..] but it doesn’t always go smoothly. And the trick

is to pass it on downwards. That is a big issue.”

“Things go as they go, and when it becomes an issue then they will tackle it. I think they are thinking about it, but you will never hear about it. That’s why it seems chaotic at times, I

think.”

“I think that they think they’ve communicated certain things when they didn’t. [..] They will mention something like; as you know … and we think; well we don’t know that. [..] That’s

definitely a point of improvement.”

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27 Social controls

Social controls are for the majority reflected in the autonomy of the GPs. Although the GPs have to follow the general rules of the organization, they are free to decide how they treat their patients. All GPs explained this during their interviews. As interviewee B said:

“Within patient care I, as a GP, am allowed to do the tasks independently.”

This was confirmed by both managers, as is reflected in the following quote:

“I do not control the GPs professionally.” – interviewee F

Although the autonomy of the GPs is part of the origin of the profession itself, it is enhanced by the fact that all GPs employed by the organization are also trained within the organization, as explained by both managers as well as all GPs. In this way, as they acknowledge, both managers know how each GP performs their tasks and the managers have influence in the development of the GPs’ professional paths. An added bonus for the organization is that the managers have the opportunity to select the best GP suited for their practice, or as they say it themselves: “we can sort the wheat from the chaff” – interviewee A.

Overall, social controls are clearly present within the organization. This result is not surprising, since social controls are part of the profession this organization is centered around.

Self-controls

Within the organization, the self-controls can somewhat be found in the deviations registration system. As explained by both managers, employees can register any deviation they experience during their work day into this system. All deviations are then collected and categorized by one of the managers, to gain an overview of possible problem areas within the organization. As both managers acknowledge, the purpose of this system is to gain insights in the work processes of the organization. They do not intend to assess employees with this system, but use its outcomes for educational purposes. These outcomes are then discussed during a work meeting, as well as the solution for the problem. By doing this, as both managers explained, employees are made aware of problem areas as well as the solution for these problems. During his interview, one of the managers explained how this system is supposed to work:

“I will give an example. When a patient report at the desk to collect his medicine that was prepared for him and the assistant cannot find it, it is a deviation. The assistant submits this

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This system used to be analogue but with the introduction of the web portal it is digitalized. The current problem management has with this system and was brought up during the interviews is that it cannot be monitored if every deviation that occurs is being submitted into the system. The managers and their advisor hope that the digitalization of this system should give some insights in differences between the number of deviations submitted per employee. However, they explained that the outcomes of this system will never be complete, since they cannot measure if every deviation is actually registered.

Concluding, the organization has found a way to incorporate self-controls into their operations. These outcomes are used to improve the current work processes of the organization.

Taking these controls altogether, it can be concluded that the medical managers are already using management controls within their organization. They recognize the benefits these controls can bring and are relatively open-minded towards using more. However, these managers are using more administrative controls than initially expected. Therefore, based on these results, proposition 1 will be slightly adjusted and will become:

If medical managers have a positive attitude towards the use of management control, they will use a mix of management controls (administrative controls, as well as social- and self-controls).

Organizational growth and management control

During the interviews, it became clear that the organization has grown significantly since its establishment. As both managers explained, this enlargement affected the organization on multiple levels. First, the number of employees increased. The total employee count has gone from under ten employees in 2004 to 31 employees in 2018, which was confirmed when looking at the personnel list. Second, the organization expanded to multiple locations. Third and last, the population served by the organization increased as well. These three changes are further explained below.

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something important happened or needed to be discussed everyone was already present. However, at this moment, the total number of employees has increased, accompanied by the fact that almost all employees working on a part-time basis. This makes the transfer of information increasingly challenging, as well as directing the employees. As one of the GPs expressed:

“It (managing the employees) has especially become worse because the organization has become so big.” – interviewee E

Also, the increased staff resulted in bigger teams as well. Both managers explained that due to a merger of two organizations into one, existing teams were united. This meant that different cultures and methods were combined. During the interviews with both managers it became clear that they give high importance to a well-coordinated team where there is a lot of collegiality and where employees feel safe and enjoy their work. As interviewee A puts it:

“The teams, they have our highest priority. Do the people [..] who are in one team get along?”

In order to bring more cohesion between teams, management has implemented an obligatory morning break with the whole team. Before, because the teams were combining out of separate general practices, each employee had their own planning. By implementing a common coffee break in the morning, the employees have at least one moment together with everyone which already leads to a greater sense of cohesion, as was explained by interviewee A.

The GPs who were interviewed also recognized the challenges that this merger brought. Although they were not part of the teams who were merging, they work closely together with these teams. As interviewee G mentioned:

“There were some startup problems. [..] Two general practices were merged; new employees entered the organization and old employees suddenly have a new manager and a new

location. This has caused difficulties.”

Thus, the increase in employees caused challenges for the managers and the employees. This resulted in the need for more structure regarding the management of these employees.

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“We used to work together side by side. Now that they aren’t present in the workplace, and this has grown gradually, the collaboration has changed as well. This takes some time to get

used to.” – Interviewee H

The GPs at location Z reacted to these changes by working together even more closely. Gradually, a self-monitoring team emerged here. As they mention themselves in their interviews, when someone runs into a problem, they try to find a solution together. The new GPs are helped out by their colleagues when they cannot figure something out on their ow. Other things, like the weekly planning, they solve internally.

Due to the enlargement of the organization, both managers are more managing from a distance. As a result, they have decided to make more time available for their managing tasks.

“We have made more time available for management tasks. [..] We think that the quality is improving by leaps and bounds.” – interviewee F

They both acknowledge that the increase in size of the organization demands more from them as managers. As they formulate it themselves:

“We are still searching for the right policy. [..] That is also allocated to the fact that we do

not stand next to our employees on a daily basis.” – interviewee A.

It can be concluded that both managers are acknowledging that they need more time and controls to perform their management duties. The recognition is there, but they are still looking for the right way to do this.

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the patients’ satisfaction has evolved in an even important topic since the growth of the organization. As interviewee E mentioned:

“We think it is important for our patients to be healthy, we work preventively [..]. We think it is very important that our patients are satisfied.”

In order to maintain their promise to their patients, the managers and their advisor all confirm that they need to gain more insights in the patient satisfaction of their organization. These insights fall under the outcomes of the organization and are therefore discussed in the upcoming section.

Summarizing, managing the organization has become increasingly complex since the growth of the organization. Both managers confirm that they need more tools to perform their management tasks. The use of management controls has already assisted both managers here, but expanding this can be the answer. This is in line with the formulated proposition and will therefore remain the same:

When a small healthcare organization is growing in size, the use of management controls will increase as well.

Management control and organizational outcomes

Both managers, as well as their advisor, recognized that more information about the organization could lead to better informed decisions which could subsequently lead to higher organizational outcomes. During the interviews, it became clear that the organization uses some of the measures mentioned in the theory section, but not to their full extent. Below, the measures used within the organization are discussed, divided into their contribution to either the effectiveness or efficiency of the organization.

Effectiveness

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“We are expected to conduct a survey, but I do not have a lot of faith in it. [..] This survey is answered by 20 people and apparently, that is enough to draw conclusions.”

Next to the patient satisfaction, effectivity can also be measured by the service quality of the organization. In order to do so, the organization makes sure they comply to the rules necessary for the certification of their quality mark. Recently, the organization has appointed an employee to oversee this process. According to the management advisor, the submission for the certification proceded smoother then normal since this designation.

Although the organization has put some controls in place to measure the effectivity of the organization, they do not use them to their full extent. The other measures available to measure effectivitity could improve the insights into the effectivity of the organizational processes.

Efficiency

The efficiency of the organization represents the output related to the input. Currently, the organization measures only if the deployment of personnel is adequate. As was explained during the interviews by the managers and their advisor, the number of consults combined with the workload experienced by the employees influence the placement of the number of FTE’s. Other measures are not captured, but are controlled based on the gut feeling of the managers. Although it is recognized that not everything that can be measured is measured, both managers and their advisor wondered if the benefits outweigh the costs of implementing this. As of now, they do not experience any problems relating these measures.

Thus, although the organization does not measure its efficiency fully, they do not experience any difficulties in their organization regarding these outcomes.

To summarize, the organiation uses measures to measure their organizational outcomes to some extent, and in some areas these measures lead to higher outcomes. However, within a small organization, the benefits does not necesarily outweigh the costs. This should be taken into consideration when choosing certain measures. Overall, the results are in line with the third proposition and it will therefore remain:

The use of management controls within a healthcare organization will lead to positive organizational outcomes, both on the effectiveness and the efficiency of the organization.

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DISCUSSION AND CONCLUSION

This study examined how medical managers use management controls in the context of a small, but growing healthcare organization. This final chapter discusses the key findings of this research. These results are compared with the existing knowledge presented in the theoretical framework and are presented in a revised conceptual model, accompanied by the revised propositions. The practical and theoretical contribution is then discussed. Next, the limitations of this research are presented together with the future research suggestions. This chapter will end with a conclusion.

Discussion of key findings

Research on the use of management controls by medical managers remains relatively scare, especially within small organizations. Most research tend to focus on the hospital environment, thus left the primary care sector underexplored (Kirkpatrick et al., 2012). In order to gain more insights into the way medical managers can use management controls, an in-depth understanding is necessary on how medical managers lead their primary care organization. In this case, the tasks of the medical managers became more demanding, due to an enlargement in size of the organization. To address the current gap in the literature, this research has tried to provide some initial insights into how medical managers perceive their level of control within the growing organization and gives an insight on how their employees perceive this control as well. The following research question was formulated:

How does a medical manager use a management control system in order to achieve higher organizational outcomes within a small, but growing healthcare organization?

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resistance among healthcare professionals towards using these controls. This finding led to an adjustment in the first proposition.

The enlargement of the organization was expected to lead to an increasing need for management controls. One of the main concerns found in existing literature was the ability of the managers to manage an organization bigger than what they are essentially used to (McKenna & Oritt, 1981; Greening et al., 1996). Both managers acknowledged themselves that they experienced difficulties with the enlargement of the organization. These difficulties were mostly related to directing and informing the employees. This was confirmed by the GPs of the organization, who experienced this as well. As they confirmed, there is more need for structure within the organization, which can be offered by implementing management controls. Therefore, the second proposition will remain the same.

The last part of the conceptual model relates to the relationship between the use of management controls and organizational outcomes. The study of Abernethy et al. (2001) found that this relationship is positive, since the use of management controls can help managers structuring their operations and provides them with up-to-date and detailed information about the organization and its performance. During the interviews, both managers and their advisor acknowledged that they want to move their organization towards a more controllable one, where more information is readily available. The implementation of management control should enhance organizational performance and not harm current processes. They should also match with the managers capabilities and preferences, in order to be used to their full extent. Although this study could not confirm if the use of management controls did enhance the organizational outcomes with financial data, all relevant interviewees agreed with this statement. Therefore, the last proposition has not been reformulated and remains the same. These results lead to the following revised conceptual model:

Figure 6: The revised conceptual model

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35 Theoretical and managerial implications

Theoretical implications

This paper extended current research on the claim that medical managers have a positive attitude towards using management controls. Medical managers are eager to learn and highly motivated to make sure their organization is performing in the best possible way. Often, they have the support of their subordinates to learn on the job as well. This paper builds on theory of Jacobs (1998), who claimed that GPs are open to accounting systems, since they can be seen as an extension of their education. Second, this paper also builds on the model of Abernethy et al. (2001), which claimed that the use of management control has a positive effect on organizational outcomes within the hospital sector. The current research takes a first step in the direction of proving that this claim is also applicable in the primary care sector and specifically within the environment of a small, but growing healthcare organization.

Managerial implications

This study has a few managerial implications. First, it gives confirmation to medical managers to use management controls within their organization. As this research shows, the use of management controls was encouraged by the employees of the organization, because they needed more structure in the directions they received from management. This is in line with the overall goal that management control aims to achieve, namely to ensure that daily tasks performed by employees come together in a coordinated set of actions which lead to overall goal achievement (Otley et al., 1995; Speklé, 2001; Kastberg et al., 2013). Second, this research provides the tools the medical managers need to include management controls within their organization. These tools are reflected in the administrative-, social-, and self-controls.

Limitations and future research

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Second, this research was of exploratory nature, where qualitative methods were used to gain some first insights in the managerial environment of small healthcare organizations. Specifically, the attitude of medical managers towards using management control was assessed. Claims made were not tested on a large scale, nor were they tested during a long time period. Also, due to financial data missing in the available data set, this research could not confirm the statement that the use of management controls led to higher efficiency and effectivity. Further research could close this gap.

Third, the interviewees chosen for this interview work in a small organization, which can cause some confidentiality issues. Although they were reassured this research would handle their answers as careful as possible, it cannot be neglected that there is a possibility that the interviewees did not tell the full story.

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Medical Managers and their Use of Management Control in Small, but Growing Healthcare Organizations