Financial management of public services in a hybrid organisation: a learning approach in inter-organisational settings

Abstract

This paper uses organisational learning theory to analyse the process of implementing a budget cuts policy imposed by a political hierarchy in a public sector organisation. Data is from a field study conducted in a hospital district in Finland from 2009 to 2015. The study shows that delegating managerial power to the managers of clinic groups, positive managerial coaching, active communication among clinic managers, allowing clinic managers to set priorities in redesigning clinical activities, specifying the budgetary responsibilities of clinic managers and using a specific timetable to monitor clinical performance, are among the factors that facilitates inter-organisational learning and change at clinic group levels. To institutionalise the change at organisational level, members of the executive committee of the hospital district use their systemic power and managerial diagnostics systems to monitor the implementation of managerial goals in clinic groups regularly.