Exploring healthcare authorities’ decisions to sustain or abandon a management control initiative

Abstract

AbstractWe explore how a management control initiative travels across and is translated within organizations—from the decision motives for adoption or rejection to the subsequent decision motives for sustaining or abandoning the control—through the lens of diffusion theory. Our empirical case is the journey of activity‐based funding of hospitals across 21 Swedish healthcare authorities. We develop a framework in which the abandonment or sustainment of a management control is explained by the interplay between the decision motive underlying the adoption and the propensity to continuously adapt it in response to new organizational goals and circumstances. This propensity is determined by fits and misfits between organizational characteristics and properties of the control.