PHYSICIANS AND RESOURCE MANAGEMENT: THE ROLE OF ACCOUNTING AND NON-ACCOUNTING CONTROLS

Abstract

Prior research has identified the difficulties associated with encouraging physicians to ’take resource management to their hearts’ and has questioned the efficacy of implementing management accounting systems (MASS) in the health care setting. Although physicians are now being integrated into management structures, they typically do not identifjr with managerial values and goals. This creates a potential impediment to the effective implementation of accounting-based controls. No prior research has, however, assessed if this impediment is equally significant in the effective implementation of other non-accounting forms of control. This paper builds on prior research and assesses the extent to which a physician manager's managerial orientation significantly influences the effectiveness of both accounting and non-accounting forms of control. The paper contributes to the literature by simultaneously assessing the effect of managerial orientation on the use and relative importance of three forms of control. The results confirm the importance of an identification with managerial values and norms for the effective implementation of management accounting systems. This orientation, did not, however, appear to be important for the effective implementation of non-accounting forms of control. These findings have direct implications for the design of effective management control systems in hospitals and other organizations dominated by professionals.