Strategic Performance Management during Budgetary Suffocation: Learning and critical realism

This study analyses factors that motivate managers to take positive performance actions when organisational resources are decreasing. The study uses critical realism to extend the theory of organisational learning at three conceptual levels: the real, the actual and the empirical domains of reality. Intensive field study based on interviews; document analysis and participation in meetings was conducted in hospital district, a regional city and public health care unit from 2008 to 2015 in Finland. Main findings are that strategic performance management tools, such as, balanced scorecards, cannot be taken for granted to provide strong bases for positive managerial actions in the empirical domain of reality when organisational resources are under suffocations in the actual domain of reality. A well-designed strategic plan, however, provides managers with appropriate mechanisms in the real domain of reality to learn how to implement their strategies despite political pressure to cut costs.