An Australian Public Sector Organisation's Transition to Extended Performance Reporting

Paper presented to the Ninth International Research Symposium on Public Management, Bocconi University, 6-8 April 2005, Milan, Italy

27 Pages Posted: 17 Mar 2009

See all articles by Christina Boedker

Christina Boedker

affiliation not provided to SSRN

Suresh Cuganesan

Swinburne University of Technology

James Guthrie

Macquarie University - Department of Accounting and Finance; University Of Bologna - Department of Management; Macquarie University, Macquarie Business School

Date Written: April 6, 2005

Abstract

Australian and international public sector organisations have faced, and continue to encounter, a plethora of reforms under the umbrella of 'New Public Management' (Guthrie et aI., forthcoming). Underpinning these reforms have been imperatives of budget surpluses and reduced government debt, with NPM reforms generally characterised by budget cuts, accountability for performance and privatisation (Gruening, 2001). Public sector organisations face a number of challenges in responding to these NPM reforms. Specifically, these challenges include demonstrating the realisation of economic and social value in the short term while, simultaneously, investing in organisational renewal and replenishment and value creation capacity in the medium to long term.

Concurrently, traditional financial reporting frameworks used within the private and public sectors are increasingly criticised for their failure to incorporate information on non-financial performance. This criticism is set within a context of socio-economic change, in which organisational performance is increasingly determined by a wider range of knowledge-based resources, also known as intellectual capital (IC). Arguably, the sustainability of organisations is contingent upon investment in its employees' competencies, its systems, processes and practices, and in its relations with external service providers, clients and customers as well as other stakeholders. Indeed, the application of these 'intangibles' to the operations of the organisation is central to service delivery and to its ability to sustain value creation over the medium to long term (Drucker, 1993).

However, explanations as to why organisations should engage in extended performance reporting mainly stem from a 'demand-side' perspective. This paper considers a 'supply-side' perspective and discusses the motivations of an Australian public sector organisation for engaging in extended performance reporting. In advancing the idea of an 'emergent' as opposed to 'normative' approach to establishing extended performance reporting practices, the contributions of the paper are two-fold. Firstly, it provides a supply-side perspective on performance reporting within the public sector context that contrasts to the dominant demand-oriented narrative in prior literature. Secondly, it examines how performance reporting might be extended beyond the domain of accrual accounting reports and NPM frameworks of outputs and outcome to measure the activities of an organisation in managing its IC.

Keywords: Australian Public Sector, Performance Reporting, Intellectual Capital, New Public

JEL Classification: M4, M41, M42, M49

Suggested Citation

Boedker, Christina and Cuganesan, Suresh and Guthrie, James, An Australian Public Sector Organisation's Transition to Extended Performance Reporting (April 6, 2005). Paper presented to the Ninth International Research Symposium on Public Management, Bocconi University, 6-8 April 2005, Milan, Italy, Available at SSRN: https://ssrn.com/abstract=1361389

Christina Boedker

affiliation not provided to SSRN ( email )

Suresh Cuganesan

Swinburne University of Technology ( email )

Cnr Wakefield and William Streets, Hawthorn Victor
3122 Victoria, Victoria 3122
Australia
+61 3 9214 8388 (Phone)
+61 3 9819 2117 (Fax)

James Guthrie (Contact Author)

Macquarie University - Department of Accounting and Finance ( email )

Sydney - NSW, 2109
Australia

University Of Bologna - Department of Management ( email )

P.Le Vittoria 15
Forli', 47121
Italy
+39-0543-374-621 (Phone)

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

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