Budgetary Mechanisms and Performance Accountability during Financial Restrictions: a Resource Dependency Approach in a Public Sector Organisation

Purpose —This study analyses the relationship between organisational resource dependency and performance accountability among organisational units.

 Design/methodology/approach — Drawing on resource dependence theory, we conducted a case study in a Finnish public university. Data was gathered through document analysis, interviews, meetings observations and continuous interactions with key informants from 2014 to 2016.

Findings — Findings show that macro financial restrictions convey a strong message to the university that it must improve resource efficiency,  reallocate existing resources to competitive fields, and keep improving its financial and non-financial performances. It is difficult to monitor financial performance accountability of each scientific discipline, however, because top hierarchy has no incentives to activate accounting mechanisms that would provide financial performance data thoroughly. A theoretical contribution is to show a contrast between organisational resource dependence and loose coupling with financial performance accountability mechanisms at operational unit levels.

Practical implications — The study shows the potential limitations of using strict budgetary policies of the state to improve financial performance accountability among organisational units in a public sector university.