The Role of Boundary Objects in Management Control System Change: a Longitudinal Study of an Implementation of Casemix in Healthcare

Abstract

The objective of this research is to understand the dynamics of boundary objects in interorganisational management control system (MCS) change within the public sector. This research examined MCS change involving several organisations involved with the development and operationalisation of a new casemix system in a New Zealand healthcare setting. The longitudinal case study involved the change from a traditional Fee-For-Service (FFS) MCS to a new casemix MCS across multiple organisations. Existing research has recognised that casemix systems are a type of MCS that contribute to the integration of clinical and financial information to improve the efficiency and effectiveness of hospital operations. The adoption of a casemix system is intended to provide a comprehensive financial picture of the cost of treating individual patients categorised into casemix categories based on resource usage and serve coordination and integration with and across organisations. To analyse the dynamic process of inter-organisational MCS change, this research used boundary objects as the theoretical lens. Boundary objects can be an abstract concept or an explicit prototype that assists communication between different groups given a specific context. The study of boundary objects provides insight into how people with diverse knowledge backgrounds, or holding divergent viewpoints, can complete a cooperative task without necessarily requiring consensus. Accordingly, the overarching aim of this research was to understand the dynamics of boundary objects in the context of inter-organisational MCS change in a public healthcare setting. This research conducted a longitudinal case study over a four-year period across five organisations to observe the development and implementation of a new casemix system. The implementation of the casemix system involved Kiwi Health, a project team and three pilot DHBs. Data analysis was based on the chronological order of events alongside the process of casemix implementation starting from idea generation to the pilot use of the casemix system. The findings were firstly organised starting from idea generation to data validation, dedicated to the casemix development. Then this research presented the findings of operationalisation of the casemix system, which covers four parallel activities of operationalisation as well as the pilot use of the casemix system in the three pilot DHBs. Taken together, these two phases contributed to the dynamics of the boundary objects over the casemix project. Data analysis of this research indicated that the role of boundary objects was critical in understanding the dynamic process of inter-organisational MCS change in the public sector. Specifically, this research contributed to the existing literature in three ways: First, this research argued that the roles of boundary objects are two-fold in the process of developing and operationalising the casemix system, being heuristic roles or decisive roles. More specifically, heuristic roles include inspirational, creative, brainstorming, unifying, enriching, and contextualising roles, all of which enabled MCS change to progress under a chain of activities. Decisive roles incorporate establishing, scoping, solidifying and empowering roles, which support decision making in setting the direction of MCS change over the entire process. Together, the dynamic process of change in MCS elements (cultural controls, planning controls, cybernetic controls, and administrative controls) is logically and chronologically revealed and presented in a sequential order, which provides a comprehensive view for understanding the process by which MCS change occurs. Second, this research developed a generic model of boundary objects in MCS change by extending the existing model of the dynamics of boundary objects. Key insights from this model include the existence of Antecedent Boundary Objects (ABO), which contribute to the emergence of boundary objects and assist in explaining MCS change associated with strong historical and external factors. The Functional Boundary Objects (FBO) contribute to the crystallisation process of the ABO and assist in explaining MCS change subject to the integration between operational levels and strategic levels within an organisation. The Crystallised Boundary Objects (CBO) are dedicated to the standardisation process for explaining MCS change in relation to the diffusion and integration of MCS change across organisations. The descendants of boundary objects represent the outcome of the MCS change, including three forms: the accretions of boundary infrastructure constitute the new live MCS; Limbo Boundary Objects (LBO) and Reincarnated Boundary Objects (RBO) are the residual components. Thus, the findings of this research provide an end-to-end process of MCS change starting from idea generation to the pilot use of a new MCS. Third, this research contributes to the understanding of the dynamic process of interorganisational MCS change in the public sector by adapting key themes and perspectives from the private sector to the public sector. The first implication shows that ABO can contribute to the explanation of the initiation of inter-organisational MCS change in the public sector. The second implication shows that studying inter-organisational MCS change in the public sector should pay more attention to the complexities of knowledge exchange to support coordination and collaboration from a micro dynamic view. The last implication shows that trust can be important as a complementary control mechanism because it helps to promote the adaptive and flexible use of boundary objects to different circumstances during inter-organisational MCS change in the public sector. This research provides a foundation for future research, whereby the generic model of the role of boundary objects in MCS change developed in this research could be used to explain the process of MCS change in organisations within different contexts.