Performance measurement and institutional processes: A study of managerial responses to public sector reform

Institutional aspects of performance measurement (PM) in public sector organizations are attracting increasing research interest. Only recently, however, has the literature on this topic recognized the pertinent critique of neo-institutional sociology (NIS) pivoting around its view of managers and organizations as primarily passive adaptors to change. This paper explores how the properties of institutional processes associated with recent reforms in the Norwegian health care sector impinge on the extent of pro-active choice exercised by senior management in the development of multidimensional PM reflecting the interests of a wider range of institutional constituencies. Addressing this issue, we draw on Oliver's (1991) conceptual framework, based on a continuum of responses characterized by a varying degree of pro-active choice. The study thus provides a more detailed analysis of the managerial tactics in developing organizational PM than most prior research informed by NIS. We find support for several of Oliver's hypotheses regarding the influence of institutional aspects, particularly those pertaining to the causes of the adoption of PM practices, the pattern in which these are diffused and the influence of constituency multiplicity and dependence, but also identify some areas requiring conceptual refinement in this respect. © 2001 Academic Press.