University of Twente Student Theses
Examining the controller activities at MST
Bies, Edwin (2017) Examining the controller activities at MST.
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| Abstract: | MST needs to get more efficient in total. As a result the financial manager would like to address the efficiency and effectiveness of the controllers. Therefor he needs a clear overview of activities performed by the controllers and would like to compare these outcomes with activities controllers perform in peer hospitals. As a result of this provocation we formulated the following central research question. What are the main activities of a controller in respect to the literature and in comparison to peer hospitals to improve effectiveness and efficiency of the controllers at MST. We started this research with an extensive literature study from which we created our theoretical framework around the concept, role and activities of a controller. Besides this theoretical framework we performed a corporate style benchmark as suggested by Ammons (1999) existing of semi-structured interviews (N=22) and a questionnaire (N=25). In the literature there is little consensus on the exact definition of the controller(or management accountant) due to the fact that literature more speaks about the different roles of a controller. We found two profound roles a controller can execute: the control role and the service role (Sathe, 1983). The controle role: “To ensure that reported financial information pertaining to the relevant organizational unit is accurate and conform formal regulations and that internal control practices are conform to informal corporate policies and procedures”.The service role: “to assist and support the management team in their business decision-making.” The literature widely claims the change in the role of the controller over time: the shift from bean counters to business partner (Siegel, 1999, p.20) and often even member of the management team. However some researchers question whether this shift actually takes place, or should only be regarded as an ideal develop model (Knoop, 2015). Further,Sathe (1983) claims that when the controller is expected to fulfill both the control- and the support role at the same time, a role conflict could arise. Verstegen (2007) performed an extensive literature researchdistinguishing 37 different activities for controllers. We grouped the activities and enhanced them with hospital specific activities. Categories of controller activities: A. Activities regarding the control system of the organization G. Exchange of information B. Maintenance of (financial) information systems H. Activities regarding (operational) support role C. Activities related to planning within the planning and control cycle I. Activities regarding strategic support role D. Activities related to control within the planning and control cycle J. Activities regarding information generation E. Processing information K. Other activities F. Activities related to audits and risk L. Activities related to care administration We tested the provocation of this study and two different calculations support the managers feeling that MST employs too much FTE in their controlling function in comparison with the benchmark. We carefully concluded that the controllers operate in a less efficient way. MST's main categories of activities relate to performing audit and risk (F), operational support (H) and activities related tocare administration (L). Followed by activities related toinformation generation (J) and processing (E). The benchmark's main categories of activities relate to the strategic support role (I), control within the planning and control cycle (D), maintenance of (financial) information systems (B) followed by activities related to planning within the planning and control cycle (C). A Mann-Whitney U test shows that on the activities with the significant differences (I and F) and trends (H, D and L) are also opposites to each other (benchmark more strategic, MST more operational). Combined with the interviews, we concluded that the main activities of MST controllers are primarily of an operational/executive nature and the benchmark of a strategic support nature. The benchmark is therefore further in their development into the (strategic) service role. We concluded that business structure is the main cause for inefficiency at MST. This is mainly due to the physical location of the controller in the organization, the functional control of the controller and the absence of a separate care administration. Besides this some boundary conditions contribute to the problem: strong leadership, vision, and strategy, ICT and standardization, the maturity of the financial administration and the involvement in strategic decision making. We strongly recommend MST to make adjustments in the business structure by centralizing all controllers and establish a separate and centralized care administration.Beside this we recommend to: show strong leadership, formulate a clear job description, invest in the knowledge of the financial administration and standardize management reports. |
| Item Type: | Essay (Master) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 83 economics |
| Programme: | Business Administration MSc (60644) |
| Link to this item: | https://purl.utwente.nl/essays/73357 |
| Export this item as: | BibTeX EndNote HTML Citation Reference Manager |
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