The Implementation and Use of Benchmarking in Local Government: A Case Study of the Translation of a Management Accounting Innovation

• Published date: 01 May 2014
• DOI: http://doi.org/10.1111/faam.12031
• Date: 01 May 2014

Financial Accountability & Management, 30(2), May 2014, 0267-4424

The Implementation and Use of

Benchmarking in Local Government:

A Case Study of the Translation of a

Management Accounting Innovation

SVEN SIVERBO∗

Abstract: Benchmarking is a management accounting innovation (MAI) that can

be used for performance measurement and management in both the private and

the public sectors. Although public sector accounting researchers have reported

some success with the use of benchmarking, frequently charged problems exist in

implementing and using this management technique. To look beyond the technical

and institutional explanations, this paper takes a translation approach and presents

a case study of a local government benchmarking network. We conclude that there is

a link between benchmarking implementation problems and initiators’ failure to build

a strong network of benchmarking allies. Implementation is facilitated if actors,

other than the initiators, recognize the possibility of making benchmarking more

relevant and less cost focused. However, even when a network of actors has a

favourable attitude towards benchmarking, benchmarking may still appear as an

unruly ‘actant’. Furthermore, the perception of implementation failure and success

is heterogeneous and connected to various actors’ adoption of benchmarking. We

also conclude that there is a connection between the use of benchmarking and 1)

actors’ possibilities to use benchmarking in the struggle for resources and 2) the

perception of benchmarking information as ‘factual’ or ‘factual enough’. However,

the perception of benchmarking information as ‘factual’ or ‘factual enough’ seems

not only a matter of correct or incorrect ratios but also of whether such information

serves actors’ interests. A final conclusion is that the use of benchmarking increases

when actors other than the initiators complement the original idea and ‘counter

interest’ the initiators.

Keywords: benchmarking, management accounting innovation, public sector, local

government, translation, use, implementation

∗The author is from Karlstad Business School at Karlstad University.

Address for correspondence: Sven Siverbo, Karlstad Business School at Karlstad University,

651 88 Karlstad, Sweden.

e-mail: sven.siverbo@kau.se

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122 SIVERBO

INTRODUCTION

Benchmarking is a management accounting innovation (MAI) that can be used

for performance measurement and improvement in both the private and public

sectors. It can be used to compare performance (e.g., costs, productivity or

results) and processes. In the private sector, benchmarking is one of the most

adopted and popular management techniques (Rigby and Bilodeau, 2007). In

the public sector, interest in benchmarking in the last decade has greatly

increased in several countries. One aspect of this interest is the external use of

benchmarking, that is, organizations’ use of various ratios to compare their units’

performance with similar units in other organizations (Northcott and Llewellyn,

2003). The United Kingdom is at the forefront of this movement. The British

government has used benchmarking since the end of the 1990s to control and

stimulate performance improvement at the local government level and in health

care organizations (Broadbent et al., 1999; Bowerman and Ball, 2000; Bowerman

et al., 2002; Jackson and Lapsley, 2003; and Northcott and Llewellyn, 2005).

Public authorities in many other countries are also involved in benchmarking

activities. Among these countries are the United States (Dorsch and Yasin,

1998; and Cavalluzzo and Ittner, 2004), New Zealand (Broadbent et al., 1999),

the Netherlands (de Bruijn and van Helden, 2006; and ter Bogt, 2008), Norway

(Johnsen, 2007; and Askim et al., 2008), Denmark (Triantafillou, 2007) and

Sweden (Siverbo and Johansson, 2006; and Johansson and Siverbo, 2009).

Although some researchers have reported success by users of benchmarking

and similar techniques (see Bowerman and Ball, 2000; Lapsley and Wright,

2004; Llewellyn and Northcott, 2005; Siverbo and Johansson, 2006; Askim et al.,

2008; and Johnsen, 2007), other researchers have frequently observed problems

in their implementation and use (see Bowerman and Ball, 2000; Ammons et al.,

2001; Northcott and Llewellyn, 2003; Askim, 2004; Northcott and Llewellyn,

2005; Llewellyn and Northcott, 2005; Johnsen, 2005; Pollit, 2006; ¨

Ostergren,

2006; Triantafillou, 2007; Askim et al., 2008; and Johansson and Siverbo, 2009).

This situation is similar to that facing other MAIs in the public sector (see, for

example, Preston et al., 1992; Chua, 1995; Geiger and Ittner, 1996; de Lancer

Julnes and Holtzer, 2001; Cavalluzzo and Ittner, 2004; ter Bogt, 2004; and

Arnaboldi and Azzone, 2010) and MAIs in general (see, for example, Gosselin,

1997; Langfield-Smith, 2008; and Otley, 2008).

In previous research on benchmarking in the public sector, problems with

the use of this technique are largely explained as technical problems, as poor

implementation strategies and even as commitment problems (see a literature

review in Siverbo and Johansson, 2006). Arnaboldi and Azzone (2010) present

similar reasoning about performance measurement systems in the public sector.

In general, this research, which takes an upper management perspective,

reveals a lack of interest in social and political factors and in how the MAI

unfolds over time (cf. Modell, 2007; and Arnaboldi and Azzone, 2010). To some

extent, New Institutional Sociological (NIS) theory has been used to explain

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