Per Nikolaj Bukh

This paper examines the role of boundary systems in operational risk management. The paper is based on a case study of a large Scandinavian bank for which effective Anti-Money Laundering (AML) is a regulatory requirement. Relying on interviews as the primary data source, the study demonstrates how the management control system develops over time in response to regulatory intervention. While the literature has previously accentuated the role of interactive and diagnostic systems in strategic risk management, this study demonstrates the importance of boundary systems in operational risk management. Establishing a separate diagnostic system for AML reporting was ineffective and so was embedding AML in the interactive budgeting system. Instead, establishing AML as a boundary system that delineates rules to be followed rather than opportunities to be sought counterbalances the beliefs systems in decentralised organisations, where effective AML is a prerequisite licence to operate and engage with strategic risks. This paper is one of the first to unravel how boundary systems can be established and operated as part of a management control system. The case study is not only relevant to the banking sector but practitioners in other settings may also consider how boundary systems can ensure effective operational risk management.

This article applies institutional logics to examine the implementation of a performance‐funding programme for Danish public schools. The programme introduced a potential bonus aimed at incentivizing improved educational outcomes for academically low‐performing students. We investigate the implementation of the programme through decoupling, compromising, and differentiation between an incumbent educational logic and the programme's intruding economic logic, drawing on a qualitative study of a Danish municipality's responses using semi‐structured interviews with administrators, school managers, and teachers. The findings demonstrate how a programme is translated into organizational practice, where solving some tensions induces new ones. The article contributes by highlighting different enactments of responses to tensions based on divergent interpretations of accounting technologies and institutional logics. It shows how an accounting technology goes through different translations from policy to influencing front‐line personnel and how responses can involve compromising and manipulation as well as unsuccessful decoupling.

Purpose: This study focuses on ratcheting and budget behavior in nonprofit museums. Specifically, the authors examine how performance compared with the budget affects future revenue budgets, and how this differs from the extant literature focused on for-profit organizations. The study focuses specifically on the relationship between museums and their sources of public funding and how this affects how museums prepare budgets.Design/methodology/approach: Based on four years of data covering 97 state-subsidized Danish museums, the authors analyze budget ratcheting using least absolute deviation (LAD) estimations in the form of median regressions.Findings: The authors find that when actual revenue from admission charges is below the budget, the decrease in the following year's budget is greater than the increase in the following year's budget when actual revenue from admission charges is above the budget (i.e. the authors find asymmetrical ratcheting).Research limitations/implications: The findings are based on a specific setting (Danish museums), and the results may not be generalizable to other settings.Practical implications: This study provides insights into the museum sector and other sectors with similar characteristics and contributes to understanding the differences between museums and for-profit organizations when it comes to budgeting. As private-sector management practices are gaining ground in the museum sector, it is important to learn more about budgeting-related issues in this sector.Originality/value: The asymmetrical ratcheting the authors find is the opposite of ratcheting typically found in for-profit organizations. The authors attribute the results to the incentive conflict between museums and their public funding sources. The authors point to the museums' dependence on public funding as an explanation for the results and, thereby, extend the knowledge on ratcheting to organizations with different characteristics than traditional, for-profit organizations.

This paper examines how managers in a Danish municipality balance tight budgetary control with flexibility when providing quality services. Using the levers of control framework as an analytical lens, the study shows how managers tackle complexities and uncertainties using accounting information and interactive control processes. Furthermore, it demonstrates how control processes enable professional judgments while simultaneously achieving tight budgetary control. While previous research within social services has often emphasised resistance to accounting information, this study shows how interactive control systems facilitate innovation and achieve tight budgetary control.

Purpose: This paper studies how performance funding of education is perceived by principals, teachers and administrative staff and management. The dysfunctionality of performance measures often reflects how the measures prevent an organisation from achieving its goals. This paper proposes that perceptions of dysfunctionality can be analysed by separating the perceptions of the programme's intentions, of the school-level actions and of the outcomes for students.Design/methodology/approach: Following a qualitative methodology, semi-structured interviews were conducted with teachers, school management, staff specialists and top management in a large Danish municipality when outcome-based funding was introduced.Findings: The performance-funding programme affected teaching by changing educational priorities. Different perceptions of the (dys)functionality of intentions, actions and outcomes fuelled diverging responses. Although the performance measure was generally considered incomplete, interviewees' perceptions of the financial incentivisation and the dysfunctionality of actions depended on interpretations of the incentivisation and student-related outcomes of the programme.Research limitations/implications: Dysfunctionality can be contested; the interpretations of the intention of a performance-funding programme affect the perceived dysfunctionality of reactions. Both technical characteristics of funding schemes and administrators' and principals' mediating roles are essential for the consequences of performance funding.Originality/value: The paper examines conditions for dysfunctionality of performance measures. We demonstrate that actions can be perceived as dysfunctional because of a measurement's intentions, actions themselves and the actions' outcomes. Further, the paper illustrates how the reception of performance funding depends on how consequences are enacted based on educators' interpretations of the (dys)functionality of intentions, actions and outcomes.

High-stakes testing is meant to create a positive washback effect on student learning. Performance funding can raise stakes. However, it is not often used, and its washback is uncertain. The purpose of this paper is to examine performance-funding programs based on students’ exam results. We study principals’ perceptions and interpretations of how this influenced stakes and washback effects of the exit exams. For that purpose, we selected four schools based on theoretical sampling criteria. The empirical data comprise semi-structured interviews with management over the 2-year program and documents describing the performance-funding program. The findings indicate that implementing performance funding increases stakes and has washback effects, but that stakes depend partly on the principal’s choices. Although the consequences were unintended, the program and its effects were mostly perceived as positive. The paper shows how unintended consequences call for careful consideration of the pros and cons of accountability systems when high-stakes test-based funding mechanisms are introduced.

Purpose - This paper explores how the introduction of new accounting information influences understandings of cost-consciousness. Furthermore, the paper explores how managers use accounting information to shape organizational members’ understanding of changes, and how focusing on cost-consciousness influence professional culture within social services . Design/methodology/approach -The paper is based on a case study, drawing on sense-making as a theoretical lens. Top management, middle management, and staff specialists at a medium-sized Danish municipality are interviewed. Findings - The paper demonstrates how accounting metaphors can be effective in linking cost information and cost-consciousness to operational decisions in daily work practices. Further, the study elucidates how professionalism may be strengthened based on the use of accounting information. Research limitations/implications - The study is context-specific, and the role of accounting in professional work varies on the basis of the specific techniques involved. Practical implications - The paper shows how managers influence how professionals interpret and use accounting information. It shows how cost-consciousness can be integrated with social work practices to improve service quality. Originality/value - The paper contributes to the literature on how accounting information influence social work. To date, only few papers have focused on how cost-consciousness can be understood in practice and how it influences professional culture. Further, the study expands the limited accounting metaphor research.