Abstract
This study examines the impact of management control systems on the effectiveness of public cultural institutions in the context of an emerging economy. Despite studies confirming the possibility of adapting various management control aids to meet the needs of cultural institutions, empirical evidence on the efficiency of their implementation is missing. Using a sample of 57 cultural institutions from Poland, we establish that the implementation of an advanced management control system may enhance the effectiveness of cultural institutions and the likelihood of fulfilment of their mission. In case of public museums, an efficient management control system appears to facilitate the receipt of public funding. In contrast, public theatres, which seemingly enjoy greater financial flexibility, are seen to primarily use management control aids to foster the growth of non-subsidy financing. The implementation of advanced management control systems in public cultural institutions is found to positively contribute to the fulfilment of their mission, even as it improves the self-assessment of their financial standing. The effectiveness of the sampled cultural institutions is found to be related to the educational background of their managers; further, economic/managerial education enhances the likelihood of fulfilment of the institutions’ mission.
Highlights
In most European countries, a non-negligible part of public funds is allocated to finance cultural infrastructure (Last & Wetzel, 2010)
We demonstrate that the presence of an advanced management control system is positively associated with the likelihood of fulfilment of the cultural institutions’ mission – something frequently ignored in unidimensional financial performance appraisal
The aim of the present study was to analyse the impact of the management control systems on the effectiveness of the public cultural institutions in Poland
Summary
In most European countries, a non-negligible part of public funds is allocated to finance cultural infrastructure (Last & Wetzel, 2010). Our goal is to present convincing evidence on the benefits of comprehensive multidimensional management control systems in terms of fulfilling cultural institutions’ mission, as well as the amelioration of their financial standing through monitoring and management of both financial and non-financial performance indicators. The overwhelming majority of cultural institutions rely on budget subsidies as their primary source of financing; the non-subsidy operational revenues constitute a minor part of the disposable financial resources of cultural institutions The latter fact may potentially skew operational decision making and shift performance priorities towards the monitoring of subsidy allocation even at the expense of fulfilling the institutions’ mission.
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