Management Control Systems as Enabling Use in Professional Bureaucracy : Evidence from Management Reform of a Public Hospital

This study explores the role of management control systems in a professional bureaucracy through a case study of a public hospital in Japan. Given the rapid growth of health care expenditures in the developed countries, the implementation of management control systems in public hospitals has been seen as an effective way to restrain medical costs. While previous studies show the administrative control has little effects on physician efficiency in providing medical service, our findings indicate the critical role of management control systems in improving quality and efficiency of medical care. This study applies the concept of enabling (Adler and Borys, 1996) to our case. In our case, an enabling use of management control systems helped medical doctors to understand the financial impacts of their daily clinical decisions and to provide more productive service without sacrificing service quality. Our results offer new insights into management control in the process of management reform in professional bureaucracies