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Public sector reforms and balanced scorecard adoption: an Ethiopian case

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Article in Accounting Auditing & Accountability Journal · May 2017

DOI: 10.1108/AAAJ-03-2016-2484
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Accounting, Auditing & Accountability Journal
Public-sector reforms and balanced scorecard adoption: an Ethiopian case study
Belete Jember Bobe, Dessalegn Getie Mihret, Degefe Duressa Obo,
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Public sector reforms and balanced scorecard adoption: an Ethiopian case study
Abstract
Purpose—This study examines adoption of the balanced scorecard (BSC) by a large public
sector health organisation in an African country, Ethiopia, as part of a programme to
implement a unified sector-wide strategic planning and performance monitoring system. The
study explains how this trans-organisational role of the BSC is constituted, and explores how
it operates in practice at the sector and organisation levels.
Design/methodology/approach—The study employs the case study method. It analyses

semi-structured interview data and documentary evidence by drawing on the concept of
translation from actor–network theory.
Findings—The case study organisation adopted the BSC as part of broader public sector
reforms driven by political ideology. Through a centralised government decision, the BSC
was framed as a sector-wide system aimed at: a) aligning the health sector’s strategic policy
goals with the strategic priorities and operational objectives of organisations in the sector, and
b) unifying performance monitoring of the sector’s organisations by enabling aggregation of
performance information to a sector level in a timely manner to facilitate health sector policy
implementation. While the political ideology facilitated BSC adoption for trans-
organisational use, it provided little organisational discretion to integrate financial
administration and human resource management practices to the BSC framework. Further,
inadequate piloting of information system use for the anticipated BSC model—originating
from the top-down approach followed in the BSC implementation—inhibited implementation
of the BSC with a balanced emphasis between the planning and performance monitoring
roles of the BSC. As a result, the BSC underwent a pragmatic shift in emphasis and was
reconceptualised as a system of enhancing strategic alignment through integrated planning,
compared to the balanced emphasis between the planning and performance monitoring roles
initially anticipated.
Originality/value—The study provides a theory-based explanation of how politico-

ideological contexts might facilitate the framing of novel roles for the BSC and how the roles
translate into practice.
Paper type—Research paper
Keywords—balanced scorecard; actor–network theory; Ethiopia; framing and overflowing;

public sector
1
Acknowledgments (if applicable):
The authors are grateful to the interview participants for generously sharing their views. The
authors also gratefully acknowledge the helpful comments received from the guest editors of
this special issue of Accounting, Auditing and Accountability Journal, and from two
anonymous reviewers on earlier versions of the paper.
Introduction
The increasing adoption of accounting ideas in the contexts of developing countries over the
past few decades has attracted considerable research interest to determine how these ideas
translate into organisational practices in new contexts (Ezzamel and Xiao, 2011). The
literature discusses numerous experiences of adopting private sector management accounting
tools in the public sectors of developing countries, resulting from pressure for improved
public service delivery (see, for example, Rahaman et al., 2007; Uddin and Hopper, 2003;
Uddin and Tsamenyi, 2005). The wave of new public management reforms since the 1990s
(Hood, 1995; Lapsley and Wright, 2004) and associated pressure on public sector
organisations to enhance performance (Brignall and Modell, 2000; Hoque and Adams, 2011;
Liguori, 2012; Northcott and Taulapapa, 2012; Nyamori and Gekara, 2016) have facilitated
balanced scorecard (BSC) adoption in the public sectors of developing countries
(Sutheewasinnon et al., 2016). The practical role of the BSC tends to be context dependent
(e.g., Dechow, 2012; Modell, 2012); thus, social, political and economic realities may shape
the way the BSC is conceptualised and practised in particular ways in developing countries.
Nevertheless, this phenomenon remains to be further explored because BSC use in the public
sector in general (Northcott and Taulapapa, 2012) and in developing countries in particular
remains under-researched (Graham et al., 2009; van Helden and Uddin, 2016). Given the
complexity of performance measurement in the public sector (Hoque, 2014), this observation
suggests that we know little about how and whether performance management systems such
as the BSC translate into trans-organisational practice in such new contexts.
The complexity of the political and social environment in the public sector makes
performance management generally more difficult than it is in the private sector (Hoque,
2014). Further, performance measures in the public sector need to achieve conflicting
objectives due to the diversity of pertinent stakeholders of public sector organisations,
compared to their private sector counterparts (Hood, 1991). Arguably, the BSC has promise
for addressing diverse stakeholder needs because the core idea of the BSC rests with
balancing multiple organisational goals (see Sundin et al., 2010). Although the corporate
sector origins of the BSC and its original emphasis on hierarchical relationships among
organisational goals—such that achieving financial goals is articulated as an ultimate end to
which all other goals should contribute—could undermine the appeal of the BSC to the public
sector, the BSC’s current conceptualisation embraces broader goals that can accommodate
public sector needs. As Sundin et al. (2010) observed, the BSC has evolved from its initial
idea of a scorecard focused on key performance indicators (Kaplan and Norton, 1992) to a
strategy scorecard (Kaplan and Norton, 1996a, 1996b) and gradually to a stakeholder
scorecard (Kaplan and Norton, 2001). The role of the BSC has also transformed from having
a narrow focus on performance measurement (Kaplan and Norton, 1992) to being a
‘management tool for describing, communicating and implementing strategy’ (Kaplan, 2010,
p. 2). The BSC architecture also tends to be amenable to adaptation, depending on the
purpose and context of its application (Hansen and Schaltegger, 2016), consistent with the
2
general understanding that management accounting ideas transform to suit their contexts of
application (Justesen and Mouritsen, 2011, p. 170).
Another issue that adds a layer of complexity to public sector performance
management is that multiple organisations are often connected through shared policy goals
and/or common ideological commitments. This notion portends the need for trans-
organisational performance management systems. Nevertheless, the literature is yet to
provide evidence of BSC use as a trans-organisational system to synchronise performance
management for organisations interlinked with broader shared goals. This study draws on the
concept of translation from actor–network theory (ANT) (Callon, 1998a, 1998b, 1999) to
explain how the BSC was implemented in the Ethiopian public health sector as a sector-wide
system aimed at unifying performance planning and monitoring by mediating among multiple
organisations operating in the sector. This study examines case study evidence drawn from a
large public health organisation: All African Leprosy Research and Training (ALERT).
ALERT’s BSC adoption idea originated from sector-level actors’ interest in addressing the
lack of a unified performance management system to align performance planning and provide
aggregate sector-wide performance tracking to assist health policy implementation in
Ethiopia. The actors articulated this trans-organisational role of the BSC with a balanced
emphasis on fostering sector-wide strategic alignment through integrated planning, while
tracking the performance of organisations operating within the sector. The study examines
how this relatively new role of the balanced scorecard is constituted, and explores the extent
to which the BSC serves the anticipated purposes at the organisation and sector levels. This
study interprets the BSC adoption as a process of translation (see Callon, 1986; Latour and
Porter, 1996) that occurs through the interaction of actors in the construction of actor-
networks in particular contexts (Latour, 1986). Drawing on recent ANT research in
accounting (e.g., Christensen and Skærbæk, 2007; Kastberg, 2014), this study analyses how
the BSC idea was initially framed, and how overflows (that is, emerging eventualities that
challenged the original framing) influenced the implemented form of the BSC.
This study interprets the rationale for and process of BSC adoption in Ethiopia in
view of the politico-ideological framework within which public sector management is
practised. Ethiopia’s public sector reforms—funded by international funding bodies, such as
the World Bank and International Monetary Fund (IMF) (Mihret and Bobe, 2014)—provided
the background for BSC adoption. Ethiopia is characterised as a state-centred society
governed through a developmental state ideology, which advocates that a ‘vanguard party’—
namely, the Ethiopian People’s Revolutionary Democratic Front (EPRDF)—should maintain
long tenure in power to realise sustained economic development. In this context, the party
often makes decisions centrally and passes these decisions down only for implementation to
various levels of the public sector administrative hierarchy (Hagmann and Abbink, 2011;
Lefort, 2012; Vaughan, 2011). This study seeks to explore how such a centralised politico-
ideological practice shapes the framing of the BSC as a trans-organisational strategic
planning and performance monitoring system, and influences the practicality of the framing.
This study makes an important contribution to the literature in two ways. First, it
provides contextually grounded insights into the translation process in which the BSC’s trans-
organisational role is constituted. This is an important contribution because, although prior
research has explored BSC adoption by individual public sector organisations, the role of the
BSC beyond individual organisational boundaries remains unexplored. At a more general
level, the study responds to calls for research to examine diversity in practical applications of
the BSC (e.g., Dechow, 2012; Modell, 2012), and enriches systematic understanding of
management accounting change in relation to BSC adoption—the need for which prior
research has advocated (Busco et al., 2007). Second, this study enriches the methodological
3
literature on management accounting change (see also Lounsbury, 2008; Qu and Cooper,
2011) by using the relatively less explored ANT perspective to examine BSC adoption and
use (Hoque, 2014). The adoption of an ANT perspective is significant because it enables a
constructivist understanding of the dynamics of such changes in particular contexts.
The remainder of this paper is structured as follows. Section 2 provides the social and
political context of Ethiopia, as well as some background information on the public sector
reforms that facilitated the BSC adoption. Section 3 develops an analytical framework for the
study and formulates the research questions. Section 4 outlines the research methods,
followed by analysis of case study evidence in Section 5. Section 6 discusses the findings of
the study, while Section 7 concludes the paper.
Social and political context and health sector and public sector reforms in Ethiopia
Ethiopia is an ancient multi-ethnic country located in East Africa. It has
approximately 80 different languages and as many diverse cultures (Ethiopian Government,
2012). Its estimated population was 103.7 million as of March 2017 (Worldometers, 2016).
The current government of Ethiopia seized power in 1991 under the leadership of the EPRDF
[1], which overthrew a military regime (commonly known as the ‘Dergue’, meaning
‘committee’) after 17 years of civil war. The EPRDF introduced a federal system of
government through a new constitution adopted in 1995 (Ethiopian Government, 2012). The
constitution defines the political, fiscal and administrative institutions governing the federal
government, nine regional states and two city administrations.
The EPRDF invokes the developmental state ideology to gain legitimacy and exercise
almost absolute political authority and long tenure in power. The practising of revolutionary
democracy, which originates from the Leninist principle of democratic centralism, enables
the ruling party to make decisions centrally and pass them down only for implementation
through the public sector administrative hierarchy (Gudina, 2011). The late leader of the
EPRDF, Meles Zenawi, who ruled Ethiopia from 1991 to 2012, openly criticised the
neoliberal ideology and advocated developmental state ideology as a suitable alternative for
Africa (Zenawi, 2006, 2012). Nevertheless, it is worth noting that Ethiopia undertook public
sector reforms amidst a dialectical relationship between the neoliberal ideology promoted by
international funding agencies and the EPRDF’s developmental state ideology (Feyissa,
2011; Lefort, 2012). Ethiopia received both financial and expert assistance from international
financing agencies in undertaking the reforms (Mihret et al., 2012), and the adoption of
neoliberal management tools, such as the BSC, occurred against this background.
By drawing on the developmental state ideology, the EPRDF advocates that a
vanguard party (itself) must rule Ethiopia for decades to realise the country’s development
goals through a sustained effort. Since 1991, the EPRDF has largely controlled the Ethiopian
parliament to the extent that the party’s critics consider Ethiopia a de facto one-party state
(Bach, 2011; Gudina, 2011). In the two most recent elections conducted in 2010 and 2015,
the EPRDF and its affiliated parties claimed to have won 99.6% and 100% of parliamentary
seats, respectively (BBC, 2015; National Electoral Board of Ethiopia, 2015; Zimeta, 2010).
This absolute control of parliamentary representation enables the EPRDF to pass any laws
and implement any policy reforms with little challenge.
The Ethiopian health sector is the third largest sector nationally by number of
employees, following defence and education. The sector is organised into federal and
regional levels. At the federal level, the Ethiopian Federal Ministry of Health (FMH) is the
highest organ vested with the power to formulate national health policies (Ethiopian FMH,
2012a). At the federal level, the sector is financed through general government revenue,
4
donor aid/external assistance and foreign loans, and service fees (Ethiopian FMH, 2012b).
Ethiopia has one of the poorest health service delivery indicators, even by Sub-Saharan
African standards (Wamai, 2009), although it has achieved improvements over the past two
decades. As of 2015, life expectancy at birth was 63 for males and 67 for females, child
mortality under five years of age was 64 per 1,000 births (2013 data), and physician (nurses
and midwives) density per 1,000 population was 0.025 (0.202). Life expectancy at birth for
both genders increased by 13 years between 2000 and 2012; in comparison, the average for
the Africa region increased by seven years over the same period (WHO, 2015). Health sector
reforms—to which the BSC adoption initiative is one recent addition—are arguably behind
this improvement. The central concern in this study is to examine the BSC adoption initiative
in the Ethiopian health sector, with specific reference to the case of ALERT.
Analytical framework and research questions

This study draws on the concept of translation from ANT—particularly Callon’s
(1998a) notions of (re)framing and overflowing to analyse implementation of the BSC by
ALERT as part of a sector-wide performance management system. ANT has multiple

streams, with the works of Bruno Latour, Michel Callon and John Law commonly adopted in
accounting research (Justesen and Mouritsen, 2011) [2]. The ANT lens is often employed to
address some of the limitations of the essentialist approaches to studying adoption of new
ideas by organisations (Cooper et al., 2012) because the theory provides conceptual tools to
examine how complex social, political and technical factors shape the processes and
outcomes of the phenomena. The ANT approach challenges the functionalist assumption that
ideas are implemented with essential, unalterable attributes. Instead, it supports the
philosophical stance of pragmatism, which maintains that practical applications of ideas
cannot be abstracted from their temporal and spatial context. This view challenges logical
positivism that ascribes an unalterable essential form to ideas, irrespective of the context of
their application (Baker and Schaltegger, 2015; Barnes, 2008). It conceptualises that ideas
‘emerge contingently and experimentally in response to the particular needs and practices of
actors’ (Barnes, 2008, p. 1544). This is consistent with ANT’s view that practices are shaped
to suit actors’ interests and circumstances (Latour, 1986) in a process that configures actors
relationally in actor-networks (Callon et al., 1983). The literature provides evidence of the
adaptation of the BSC for specific purposes in particular contexts (Butler et al., 2011; Hansen
and Schaltegger, 2016; Nikolaou and Tsalis, 2013). The BSC’s tendency to translate to
organisational practice in the distinctive contexts of developing economies (see van Helden
and Uddin, 2016) suggests that a non-essentialist investigation of BSC adoption in such
contexts may offer new insights.
The non-essentialist view maintains that the final form of adopted practices may not
necessarily reflect the essence of the associated idea the actors originally advocated (see
Latour, 1986). ANT provides suitable conceptual tools to understand how ‘connections’
established between human actors and/or non-human elements in an actor-network shape the
adoption of ideas (Latour, 1996, pp. 372-3). This point is central to ANT-based analysis of
BSC adoption because non-human elements—namely, objects that strengthen or weaken the
BSC system—could facilitate or inhibit human action in consolidating the actor-network that
makes the BSC operational. Objects, such as inscriptions, systems and other non-human
elements in actor-networks, grant power to actors (Cresswell et al., 2010) and play an
important role in constituting organisational activities, as well as the thinking of individuals
(Chua, 2011; Ezzamel and Xiao, 2015; Skærbæk and Tryggestad, 2010). ANT’s concept of
translation (Latour and Porter, 1996) enables understanding of the process of modification
5
that may transform the BSC model into organisational practice. This concept underscores the
role of actors in shaping the outcome of the adoption process, and thus challenges the
essentialist view of adoption of ideas. The introduction of performance management systems
such as the BSC can be analysed using analytical lenses of (re)framing and overflowing
marking key milestones in the translation process (Callon, 1998a). Framing involves
problematisation of phenomena and articulating solutions in such a way that proposed ideas
are presented as indispensable to address the problem (Bloomfield and Best, 1992)
manifested as an overflow. Overflowing signifies that an existing frame fails to contain
interactions in the actor-network (Callon, 1998a). Overflows reflect ‘disagreements with the
frame that may generate various contradictive behaviors’ (Christensen and Skærbæk, 2007, p.
106) that render the framing unstable (Callon, 1998a). Relationships among actors
established during the framing provide the basis for defining the expected actions of the
actors and expected outputs of the relationships within a specific boundary (Kastberg, 2014;
Skærbæk, 2009). Continual reframing occurs to address inevitable overflows (Skærbæk and
Tryggestad, 2010) that necessitate redrawing the boundaries for the interactions by
internalising the eventualities and/or redefining emerging relationships within a new frame
due to external factors not considered in the initial framing (Callon, 1998b).
The frame continues to evolve as the original frame proves inadequate to contain
interactions that deviate from the original frame (Callon, 1998a). The interactions of actors
within a frame (Law, 1992) are mediated by objects such as management accounting tools,
including the BSC (Briers and Chua, 2001). Performance management systems that enhance
accountability among organisational actors by minimising goal ambiguity and that foster
performance through incentives can be conceptualised from this perspective (Speklé and
Verbeeten, 2014). Objects play an important role in establishing interdependencies among
actors (Law, 1992; Lowe, 2001). Variants of the objects could emerge through the processes
of modification resulting from framing and overflowing that occur in two ways. First,
relationships defined within the original frame could change in ways that make the original
frame inadequate to contain the emerging interactions. Second, the external environment,
from which a network cannot be detached, could induce changes to the frame (Callon,
1998a).
Translation tasks are undertaken to implement changes stipulated in the framing. The
translation process introduces the framed ideas into practice through a dynamic process in
which actors interact. Focal actors often advance the translation process by progressively
enrolling actors into the new actor-network. The enrolment of actors may involve invoking
strategies including coercion, whereby some actors impose changes and other actors are left
with no choice except to become part of the actor-network. Some actors contribute to the
development of the emerging actor-networks as knowledge elites, such as consultants, who
provide the intellectual basis of the framing and subsequent translation (Mihret et al., 2017;
Waring, 2014). The process of translation often indicates the constitutive nature of the ideas
introduced (Lowe, 2001), which suggests variable actor ontology in the sense that actors’
perceptions, goals and strategies shift over time (Callon, 1998a).
The central premise of the present study is that investigating the complex social and
political processes involved in BSC adoption and use in new contexts and/or for new
purposes necessitates adopting a non-essentialist research approach. In this respect, the
concept of translation can enable theorised investigation of public sector accounting in
general, and BSC adoption in the public sector in particular (see Jacobs, 2013; Northcott and
Taulapapa, 2012). This study examines how BSC adoption is framed and implemented
amidst diverse socio-political and technical dynamics, using the following research questions
as a guide:
6
Research Question 1: What are the processes by which the trans-organisational
(sector-level) roles of the BSC are constituted vis-à-vis the common
conceptualisation of the BSC as an organisation-level tool?
Research Question 2: To what extent does the BSC translate into a trans-
organisational (sector-level) system of performance management?
Research methods
This paper is based on a case study of BSC adoption by ALERT. As a public sector
organisation that runs one of the four largest public hospitals in Addis Ababa (Ethiopia’s
capital) within the FMH, ALERT derives its strategic priorities from those of the health
sector. In view of this institutional context, this paper’s use of the case study method enabled
incorporation of organisational, political, social (Uddin and Tsamenyi, 2005) and technical
factors pertinent to BSC adoption that the ANT framework illuminates. Qualitative research
evidence was collected principally through face-to-face, semi-structured interviews at the
interview participants’ office premises, with follow-up interviews conducted via telephone to
clarify any doubts about participants’ views expressed during the face-to-face interviews.
Thirteen participants—two from the FMH and 11 from ALERT—were interviewed (details
are summarised in Table 1). ALERT’s BSC adoption project is part of the cascading of the
FMH’s BSC design to organisations within the public health sector; thus, the data collection
commenced at the FMH to gain an initial understanding of the background and origin of BSC
adoption at the health sector level. The researchers chose ALERT as the main site of study
because the two interviewees from the FMH, who championed the BSC adoption project for
the health sector, indicated that ALERT was one of the public health sector organisations
considered to have successfully implemented the BSC. Capturing data from both the FMH
and ALERT enabled the researchers to unravel the extent to which conceptualisation of the
BSC was translated into the circumstances of the various organisational units, or,
alternatively, to explain if and how the initially articulated purpose had been altered.
<Insert Table 1 here>
The prime criterion used for participant selection at the FMH and ALERT was
participants’ organisational positions and close involvement as actors in the BSC adoption
process. Accordingly, the two interviews at the FMH were conducted with policy and
planning experts in charge of designing the BSC model for the Ethiopian health sector and
cascading the design to individual organisations, including ALERT. At the time of the
interviews, the two FMH participants had worked full time on the ‘BSC project’ for more
than two years. The first interview at ALERT was conducted with a focal participant
(Participant 3) who played a liaison role between the FMH and ALERT, and was closely
involved in the BSC adoption process. This participant was interviewed multiple times at
different stages of the data-collection process. The other participants interviewed included
heads of departments from the three ‘core processes’ of ALERT (hereafter referred to as
‘divisions’ for consistency with the literature)—namely, a hospital, research centre and
training institute. These participants were interviewed after the first interview with the focal
participant.
Two of the authors conducted the interviews with participants from the FMH. One of
these authors was assisted by an experienced research assistant to conduct the remaining
eight interviews, while the other author conducted the final three interviews. The same author
7
also conducted all follow-up interviews via telephone. All face-to-face interviews were
audio-taped to facilitate data analysis. The research assistant organised interview meetings
and conducted recordings, while one of the authors asked the interview questions and handled
all the intellectual aspects of the conversations with the interviewees. The interviews were
conducted in Amharic [3]. One of the authors transcribed the audios and translated the
transcripts into English for subsequent data analysis.
The researchers analysed the data using Miles et al.’s (2013) and Braun and Clarke’s
(2006) approaches to qualitative data analysis. To gain a sense of the entire content of the
interview responses (Graneheim and Lundman, 2004), two of the authors (one of whom was
involved in conducting the interviews) read through the transcripts. The researchers
independently interpreted the transcripts with a view to generating initial coding categories
based on ANT concepts articulated in the analytical framework of this study, thereby
applying a theory-driven coding approach (Braun and Clarke, 2006). The researchers
discussed the codes and determined the initial codes based on which transcripts and
quotations from relevant documents were collated to make sense of the data. In this process,
the following coding categories were identified: actors involved, problematisation, original
framing of the BSC, justification for trans-organisational BSC use, relations of actors,
mediating role of the BSC object, translation to the health sector, translation to ALERT,
practical role of the BSC, shift in emphasis of aims and constitutive role of the BSC.
Secondary data were collected from the organisational records of ALERT, policy documents
of the FMH and Federal Ministry of Civil Service, and other pertinent published sources.
Using the interview and secondary data collated into the codes, the researchers identified
preliminary themes independently and refined the themes, before conducting further
interpretation of the data and commencing writing the paper.
Analysis of case study evidence: BSC adoption by ALERT

This section analyses the constitution of the BSC system in Ethiopia’s health sector
using case study evidence from ALERT. It begins by providing background information
about ALERT and an overview of Ethiopia’s public sector reforms that served as an
antecedent to BSC adoption in Ethiopia. It then presents this study’s analysis of the
translation process involved in implementing the BSC at ALERT.
Background of ALERT
ALERT was jointly established in 1965 by Addis Ababa University and the then
Ethiopian Ministry of Health. It operated as a self-funded, non-profit, partially government-
owned organisation until it became a full public sector organisation in 2007 (ALERT, 2013).
When ALERT was established, it was charged with a specific mission to control leprosy by
conducting research and providing pertinent training to medical professionals in Africa. It
subsequently broadened its mission to serving as a
specialised Medical Care, Research and Training Centre for Ethiopia, Africa and beyond with
a focus on leprosy, TB (tuberculosis), HIV/AIDS (human immunodeficiency virus/acquired
immunodeficiency syndrome), tropical dermatology and other infectious diseases based on
best practice to improve the wellbeing of the community (ALERT, 2013).
ALERT runs a teaching hospital—operating with a 240-bed facility—that serves patients

from specified catchment areas in Addis Ababa and all over Ethiopia. The hospital treated
approximately 298,000 patients in the 2013 to 2014 financial year, which was the highest
8
number recorded for any of Addis Ababa’s hospitals. The hospital operates a private wing in
which physicians may earn additional income by working after regular working hours.
ALERT is organised into three divisions—medical care (clinical), training and
research—and 10 support functions (see Figure 1) (ALERT, 2013), each headed by a
director. The hospital division is the largest responsibility centre at ALERT, with five
departments further divided into 35 ‘case teams’ (hereafter referred to as ‘sections’ for
consistency with the literature). ALERT has 23 departments: five at the hospital and five at
general services; and three, two and eight, respectively, at the divisions of human resources,
finance and procurement, and research. As of December 2015, ALERT employed
approximately 1,200 professional and support staff. While ALERT is primarily funded by the
Federal Government of Ethiopia, it also generates income from external research grants and
training fees. ALERT’s extra incomes are channelled to the federal government’s treasury
and transferred back as necessary for ALERT’s use, according to government financial
regulations.
<Insert Figure 1 here>

Public sector reforms and ALERT’s BSC adoption

Ethiopia’s multifaceted national public sector reforms provided the broader context
for ALERT’s BSC adoption. The EPRDF invoked its developmental state ideology to defend
its dictatorial, top-down flow of policy decisions on political and administrative matters, as
well as the party’s long tenure in power in the face of neoliberal critiques. To accomplish its
development goals and meet donor expectations, the EPRDF government has been
undertaking numerous public sector reforms since the early 1990s, largely supported by
international donor agencies. The first phase of public sector reforms (1991 to 1996) was
conducted under the umbrella of the IMF/World Bank–led structural-adjustment programmes
(Chanie, 2001). While the reforms were largely portrayed as ‘home-grown’ initiatives,
overseas actors conspicuously participated through development funding and expert advice.
The reform programme was designed by Harvard University’s Institute for International
Development and funded by the United States Agency for International Development
(Peterson, 2001). The major steps taken during this phase of reform included restructuring
government institutions and retrenchments in the public sector (Nigussa, 2013). In the second
phase of the reforms (1997 to 2001), the government launched 14 capacity-building
programmes in 1997, including the Civil Service Reform Program (CSRP) (Ministry of Civil
Service, 2012), which is the most relevant programme to the current study. The goal of the
CSRP is closely intertwined with the developmental state ideology. As indicated by a policy
review report published by the Ministry of Civil Service (2012), the government embarked on
the reforms:
to redress the backwardness and the deep-rooted, age old and anti-development paradigm that
tightly dominate and govern the overall structure and environment of the civil service in the
country that hinder the appropriate realisation of the policies and programs of the country.
As a management tool adopted by the Ethiopian public sector against this backdrop:
the BSC is [intended to be] used to plan, implement, monitor and measure the performance of
all actors involved in the implementation of the goals and objectives of the country. It is an
integrated approach to strategically plan, implement, and measure the performance of all
actors involved. Because of its [strategic] approach, balanced set of measures and [strategic]
alignment, BSC has been taken as the most important tool to be implemented in almost all
government institutions throughout the country (Ministry of Civil Service, 2012).
9
Within the broader context of public sector reforms, health sector reforms were undertaken in
Ethiopia to improve healthcare management and subsequently enhance healthcare delivery
(Hartwig et al., 2008). In particular, the health sector adopted the BSC in 2007 (BSCI, 2009,
p. 2), following the government’s decision that all public sector organisations adopt the BSC
as a performance management system (Participant 1). The use of the BSC in the FMH was
advocated to enable aggregation of performance information of individual health sector
organisations to track progress towards sector-wide strategic goals. The rationale for BSC
adoption originated from the perceived limitations of the performance management tools
used by the sector. The FMH needed comprehensive planning and performance monitoring to
advance the health sector’s goals, strategies and initiatives that originated from the Health
Sector Development Program, which guided Ethiopia’s health policy since the 1997/1998
budget year (Wamai, 2009). The sector employed ‘Marginal Budgeting for Bottlenecks’ to
identify constraints to healthcare service delivery and to determine budgetary needs to
remove the bottlenecks (see Knippenberg et al., 2003). It also conducted ‘Business Process
Re-engineering’ to enhance the efficiency of major organisational processes (see Zairi and
Sinclair, 1995) in individual organisations in the sector. Further, the Ethiopian health sector
employed ‘Results-oriented Performance Appraisal’ for employee performance appraisal.
The pre-BSC management systems were considered unsuitable for providing big-picture
perspectives to sector-level actors to plan and monitor performance. In particular, these
systems were considered incomprehensive to accommodate strategic (five-year) planning and
to align plans across the various levels (the health sector, individual organisations in the
sector, and responsibility centres within individual organisations) (Participant 1).
Recognition of the shortcomings of the pre-BSC performance management systems
served as an overflowing that facilitated framing of the BSC. In 2005, the then Minister of
Health, Tedros Adhanom, attended a BSC training workshop at the Balanced Scorecard
Institute (BSCI)—a BSC consultancy company based in the United States (US). He was
quoted as saying:
I am here to learn the strategic tools needed to provide a good sense of direction and focus for
my country’s Health Sector. From a strategic (mission and vision-focused) perspective and a
tactical (day-to-day) perspective, my team needs to be able to monitor and measure
performance of the Health Sector, as well as individual performance (BSCI, 2013, p. 1).
The BSCI was enrolled in the emerging actor-network as a knowledge elite. The
involvement of a top government official from the FMH in the BSCI’s training workshop was
a significant step for the subsequent problematisation of the FMH’s performance
management system. The fact that the official was convinced about the potential benefit of
the BSC facilitated translation of the BSC idea into organisational practice through
governmental resource commitment to further explore the idea. In 2006, a team of three
experts from the FMH—including the director of the Policy Analysis and Planning
Department of the FMH—attended BSC training at the BSCI in the US. These developments
indicate that the sector-level actors needed planning and performance management systems
that could mediate relations between individual health sector organisations and the FMH,
representing the health sector. Apart from the government mandate of BSC adoption in the
public sector, the FMH officials’ recognition of a lack of comprehensiveness in the pre-BSC
performance management systems facilitated enrolment of the FMH into the BSC actor-
network. The ministry officially embarked on a BSC adoption initiative in 2007, as the first
ministry to implement the government’s requirement to use the BSC in all public sector
organisations. In 2008, the FMH secured funding for its BSC initiative from the Ministerial
10
Leadership Institute (MLI) (Gizaw, 2011). The MLI is a four-year initiative funded by the
Bill and Melinda Gates Foundation and the David and Lucile Packard Foundation, which
financed the BSC design and implementation throughout the Ethiopian public health sector.
The MLI’s objective is to strengthen the leadership capacity of ministries of health, which
matches the FMH’s interest, thereby facilitating the MLI’s enrolment into the developing
actor-network. The MLI stated: ‘the full implementation of the balanced scorecard will serve
as an important tool for planning, monitoring and managing health sector development
activities efficiently and effectively in Ethiopia’ (BSCI, 2009). This quotation illustrates that
the MLI was persuaded about the need for the BSC in the health sector. The MLI’s funding
of the BSC initiative signifies this actor’s enrolment in the emerging actor-network.
Conceptual specification of the BSC for the Ethiopian health sector

Once the FMH commenced the BSC adoption initiative in 2007, various processes
continued until 2013, including developing the conceptual specification of the BSC,
calibration to the health sector, piloting, and cascading the design and implementation of the
BSC to individual health sector organisations. A European consulting company (country not
disclosed to protect privacy) was engaged to provide training for the trainers. However, the
team felt that this consultant did not adequately tailor the BSC to the public health sector
context. As Participant 1 recalled, the European firm:
did not demonstrate full understanding of the health sector’s needs. It did not customise its
training and manuals to the health sector context. For example, in our context, the financial
goal is only a constraint to be considered in our endeavour to achieve other goals. It is not an
ultimate goal we focus on.
Participant 1 also emphasised that: ‘As the BSC model is primarily developed with private
sector corporations in mind, we had to significantly adapt each element to the nature and
conditions of the Ethiopian health sector’s context’. From the ANT perspective, this
contextualisation task constituted a core aspect of constructing the actor-network with the
BSC as an object around which actor relationships are established. As such, modifications to
the BSC object occurred throughout the process. In search of better contextualisation of the
BSC, the team approached the BSCI. With the help of the BSCI, the team conceptualised the
BSC as a system for monitoring the Ethiopian health sector’s progress towards strategic
goals. The three officials from the FMH who attended the BSCI training provided initial
training workshops to FMH staff. The FMH staff conducted the sector-level calibration task,
which subsequently served as the basis for ALERT’s further adaptation of the BSC to its
needs. As the BSCI stated:
Piloting the balanced scorecard [at the FMH] was perceived to lower the risk of
implementation and provide proof of concept to the Ministry Leadership … For almost two
and a half years, Minister Tedros and his three colleagues led efforts to develop a strategic
balanced scorecard for [the] Federal Ministry of Health (BSCI, 2009, p. 2).
This quotation illustrates how the piloting at the FMH was used as the basis to gain support
for adopting the BSC to the sector, and cascading to individual organisations in the sector.
The BSCI was a key actor that served in the capacity of a knowledge elite by raising
awareness of the BSC through its generic training and tailored advisory services. The training
workshops attended by the minister and the three FMH experts facilitated articulation of the
framing for BSC adoption. Subsequently, the BSCI assisted in the BSC translation process as
a consultant. The three officers who attended the BSCI training served as focal actors who
drove the translation process. A BSC Champions Team was established to create broad
11
awareness among staff, champion BSC implementation at the FMH, and provide support to
individual organisations in the sector, one of which was ALERT. The team had nine members
drawn from various parts of the FMH. The members had worked together for a long time and
developed productive working relationships. They were all experienced in strategy
development and worked full time on the project, which was chaired by the director of the
Policy Analysis and Planning Department of the FMH, who was one of the three officials
trained at the BSCI.
The FMH engaged the BSCI in August 2009 to assist in building the BSC model and
cascading it throughout the Ethiopian health sector with appropriate further adaptation (BSCI,
2009). Calibration tasks included defining the mission and vision of the sector, identifying
key strategic challenges, setting strategies to accomplish goals, and developing suitable
measures to track and monitor progress towards goals. The BSCI and FMH team created
three pillars (strategic themes) by consolidating six building blocks (pillars) of the World
Health Organization (WHO) and associated strategic results (summarised in Table 2).

Following a positive assessment of the piloting results at the FMH and further
progress towards cascading, the MLI provided additional funding for the project. MLI
Ethiopia’s country lead wrote:
After observing the impressive results that were being achieved by the recalibrated FMH
scorecard, Ministry Leadership subsequently decided to adopt an overall Health Sector
scorecard. With additional project funding provided by the [MLI for the period] 2011-2013,
the Ministry … began cascading the strategic scorecard throughout all levels of the Health
Sector (Gizaw, 2011).
A further translation task followed this event when the Champions Team developed
the four BSC perspectives and 10 objectives by making adaptations to suit the context of the
Ethiopian health sector (presented in Table 3).
Participant 1 commented that the BSC serves as a strategy vantage point that enables
viewing of the sector’s strategic plan, which ties together the strategies of individual
organisations:
BSC enabled alignment of thinking and practice across the sector towards shared vision. Plans
have always been prepared but the BSC helped to align them … The greatest benefit of BSC
is to clarify and articulate our conceptualisation of the sector’s business process. For example,
when we replaced the ‘customer’ perspective by the ‘community’, it was a significant
philosophical shift (Participant 1).
Participant 1 argued that all four perspectives of the BSC are equally important and
are not prioritised. This participant also noted that some actors at the national level proposed
assigning varying weights to the different perspectives when implementing the BSC.
However, the FMH rejected this approach by arguing that varying weights would produce
dysfunctional behaviour by sending the wrong signal that some goals are less important than
others. It was also felt that prioritisation causes people to spend too much time measuring
performance, rather than performing jobs.
Cascading the BSC to ALERT

12
The BSC was cascaded to ALERT from the health sector BSC. This approach enabled
ALERT to develop strategic goals aligned with the sector’s strategy, crafted by the FMH.
ALERT’s BSC adoption occurred in two phases, as explained in the following subsections.
Phase 1—Adaptation of FMH’s BSC design to ALERT’s context: A series of

contextualisation tasks were conducted to adapt the BSC model to ALERT’s context, based
on the generic template the FMH developed to assist cascading to individual organisations.
Key actors involved in the process included the members of ALERT’s senior management
team who received extensive training on the BSC and became the Champions Team for the
adoption, the responsibility centre managers at ALERT, BSCI experts, and FMH expert
teams. Although there was little debate on whether to adopt the BSC, the implementation
aspect was a well-considered iterative process. The Champions Team prepared ALERT’s
strategic plan and developed ALERT’s strategy map (Figure 2). Upon completion of the
strategic plan, responsibilities were assigned to each senior manager for implementing one
strategic objective in order to ‘make the implementation of the plan systematic and
organised’ (Participant 2). The use of the strategy map served to consolidate managers’
understanding of their roles within the broader picture by analytically presenting the
relationships among ALERT’s principal goals.
<Insert Figure 2 here>
Here, the Champions Team consolidated the emerging actor-network by defining

relationships among the managers using the strategy map as an object. An expert from the
BSCI assisted the team to develop ALERT’s BSC-based strategic plan. The expert closely
reviewed draft strategic plans, recommended some improvements, and then used the
document as a practical training resource for ALERT’s employees. This indicates that the
strategy map was an object produced in the translation process that served to consolidate the
actor-network.
ALERT’s final BSC model comprised eight of the 10 strategic objectives shown in
the health sector’s BSC model, and incorporated one objective specific to ALERT. The two
sector-level objectives excluded from ALERT’s objectives were P4: ‘Improve regulatory
system’ and P5: ‘Improve evidence-based decision making: harmonisation and alignment’.
The new objective added by ALERT was CB2: ‘Enhance Information and Communication
Technology (ICT) utilisation’ (see Tables 3 and 4). This goal has far-reaching significance
from the ANT standpoint because actors’ ambitions to use the BSC as a mechanism to
aggregate sector-level performance presume the presence of an ICT object that mediates
between sector- and organisation-level actors.
ALERT’s overall strategic plan was then cascaded down to the organisation’s
divisions and departments, which defined their goals based on the organisation’s strategic
goals. For example, the training division’s goal was to make ALERT ‘the best healthcare
training provider in Africa by 2020’ (ALERT, 2015, p. 23). The Champions Team reviewed
the plans of each responsibility centre and department, and provided technical support to
improve planning. The process was integrated with a series of training workshops provided to
approximately 50 members of middle- and lower-level management. Two rounds of three- to
four-day training workshops were conducted in 2007 and 2008. ALERT also commissioned
the Ethiopian Management Institute—a public sector management consulting organisation—
13
to provide training to staff members who had not participated in the training sessions for
managers. Further, two staff members from the Policy Analysis and Planning Department of
the FMH conducted a refresher workshop for three days to evaluate progress and develop a
common understanding about the BSC. This training focused on cascading issues and helped
staff to understand the basic concepts and principles of the BSC, thereby facilitating the
translation process.
A challenge that arose in the BSC implementation process was that, initially, the
training was not well received by some staff members. The principal problem was that the
training seemed generic because the BSC measures were not initially adequately
contextualised to ALERT’s needs. For example, the number of patients treated was
considered a measure of output for some tasks in the hospital. The professionals undertaking
the training challenged the validity of this measure, arguing that it failed to capture the
varying degree of complexity of patient cases. This issue illustrates the role of actors in
shaping the ideas being adopted. The original framing that the Champions Team took for
granted was subsequently rendered inadequate through interactions with other key actors—
namely, the responsibility centre heads. Through continuous consultations, the number of
patients—categorised by level of case complexity—was agreed to be a reasonable basis to

measure a physician’s daily performance target.
To further address similar concerns, the FMH conducted a progress review in 2009,
based on which two trainers from the BSCI provided two further rounds of three-day training
workshops. One-on-one coaching sessions were then provided in 2013 to improve the
training sessions’ relevance to the managers’ needs. A common understanding emerged over
time, and staff members began to recognise the value of the BSC in planning their jobs,
which reinforced staff commitment to the BSC implementation.
The responsibility centre managers at ALERT were key actors in the actor-network
that was being constructed. The enrolment of these actors was not at their discretion.
Consistent with ANT’s propositions, the decisions by sector-level actors and ALERT’s
management implied the necessary enrolment of responsibility centre managers.
Nevertheless, the role of these actors to strengthen the actor-network could be taken for
granted. The above process shows that these actors actively interacted with the focal actors to
influence the outcome of the adoption process.
Phase 2—Implementation of the BSC model at ALERT: Several social, political and
technical issues produced eventualities that necessitated further modifications to ALERT’s
BSC used in practice. A lack of institutionalisation of the BSC as an organisational practice
was a critical issue in this regard. This issue occurred due to staff turnover, which was a
major challenge confronting the Ethiopian health sector in general. This challenge emerged
when Ethiopia moved to a policy of mixed health service delivery in the mid-1990s, which
encouraged private sector providers to supplement healthcare provision. The subsequent rise
in private health service providers—which often offer better financial rewards than public
health service providers—instigated an ‘internal brain drain’ in the public health sector in
Ethiopia (a flow of the medical workforce to the private sector) (Lindelow and Serneels,
2006, p. 2231). As a result, ALERT’s BSC adoption tended to be dependent upon the
champions and key individual staff. ALERT suffered from high staff turnover as experienced
staff frequently resigned and joined the private sector:
there is a high staff turnover which has serious implications for the BSC implementation
success … There might be several factors for changing employment, but the performance
reward system in the public sector is one of the main factors for experienced staff to go to the
private sector (Participant 3).
14
Consolidating the BSC actor-network demanded expensive training and mentoring
that involved time-consuming processes; thus, staff turnover considerably changed the
dynamics of the actor-network construction. ALERT attempted to address the issue of poor
compensation through the private wing of its hospital ‘with additional pay’ (Participant 12),
while concurrently addressing the issue of a lack of accountability of health personnel
towards patients. That is, there was a perception that health personnel in the public sector
generally did not exhibit a high level of accountability to patients, who sometimes felt forced
to seek treatment from private sector providers and subsequently incur higher fees (Lindelow
and Serneels, 2006). This practice also encouraged ‘opportunistic referrals’ to private sector
providers, where some medical staff worked part time (Lindelow and Serneels, 2006, pp.
2228, 2231). To ensure physicians’ accountability to patients, ALERT offered the
opportunity to work in the private wing only to physicians who had seen all their patients
booked for the day, according to the BSC plan. From an ANT perspective, this practice
offered an incentive to physicians to help consolidate BSC use at ALERT through
engagement with BSC-based planning and performance reviews.
The BSC implementation process also demanded addressing the issues of poor staff
perception and attitude towards the reforms. Initially, there were misconceptions and
scepticism regarding BSC adoption. Some professional staff felt that, as with reform tools
introduced in the past, the BSC could increase paperwork and distract people from their
regular duties. Participant 7 noted: ‘professional staff in the nursing area consider any
administrative paperwork as hindrance to their work. The nurses are there to do nursing
duties and not completing forms’. This comment suggests that some actors may not embrace
the BSC object as a welcome link between them and other actors. Thus, actors’ attitude
regarding the value of the BSC was a crucial issue in the effort to institutionalise the tool as a
performance management system.
A further misconception that generated unfavourable attitudes was that, during the
initial stage of introducing the BSC, ALERT staff, including members of the management
team, perceived the BSC as a tool relevant only to for-profit organisations. This
misconception made staff sceptical about the relevance of the tool in the context of ALERT.
Moreover, an addition issue influencing the implementation of the BSC was a tendency for
ALERT staff to associate reforms with the government’s political agenda. For example, the
few people who were champions of the BSC project were often suspected of being members
of the ruling party. People were suspicious of the motives and values of the reforms, largely
due to the undemocratic nature of the change process, since the top-down approach involved
little real consultation with the people affected by the project. However, ALERT’s employees
began to understand the benefits of the BSC over time (Participant 3). For example,
Participant 3 noted that ‘a manager who was initially a fierce opponent of the BSC was
ultimately convinced about the values of the BSC, and organised training for his staff,
covering the cost from his departmental budget’. This participant stated:
the BSC helped improve employees’ and managers’ way of thinking about strategy … the
BSC-based plan is used to make everyone aware of the mission, vision and objectives of the
organisation and their role within the institution.
Moreover, Participant 13 stated that the staff perception issue at ALERT was gradually
addressed through:
education and training. Continuous training workshops were run and people realised that this
tool was different from previous reform tools. The hands-on training provided by [name
omitted] from the BSC Institute played a crucial role in this regard.
15
From a technical standpoint, a lack of automation became a major factor that
influenced the BSC implementation process, since the conceptual specification of the BSC as
a trans-organisational performance management system was premised on the availability of
an automated information system (IS) to aggregate actual performance at the individual,
section, department, division and organisation level to feed into a sector-level performance
report for further aggregation. Due to the lack of automation, completing the scorecard
continued to be cumbersome at the organisation level and nearly impossible in terms of
aggregating to the sector level. In some cases, staff underreported achievements because they
‘completed the scorecard just to tick the box’ (Participant 3). This study’s interviews
indicated that the automation problem was a resource issue because suitable software existed
in the market; however, the subscription, adaptation and maintenance costs were unaffordable
to the Ethiopian health sector. A software package (name omitted to protect privacy) was
trialled, but could not serve the purpose because it did not use Amharic language and Julian
calendar that Ethiopia employs. Adapting the software to the Ethiopian context demanded
further human and financial resource issues.
This issue suggests that the BSC needed an accompanying technology object in order
to operate as per the FMH actors’ original ambitions. That is, limitations of the IS
infrastructure imposed restrictions on how the BSC translated into a trans-organisational
system in the Ethiopian health sector. This shows a key overflow that originated from
inadequate articulation of the relationships between the IS component and other elements of
the anticipated actor-network for BSC use. The role of the IS component was central in the
initial framing as a mediating tool, defining the relationships of the various responsibility
centres of ALERT, as well as ALERT and the FMH. Consequently, compared to the original
framing, which largely accorded balanced emphasis to the planning and performance
monitoring roles of the BSC, the implemented form of the BSC emphasised the planning
aspect.
Although the BSC did not fully translate into practice according to the original
articulation of its rationale, it facilitated performance reviews at the level of responsibility
centres. The BSC also enabled enhancement of the quality of performance reporting for some
responsibility centres, as the following participants noted:
There used to be a single-page performance report form. The report was just ceremonial. It
has now improved a lot. At least staff members know the plan and the objectives. It has made
the review more objective (Participant 3).
Pre-BSC, reports were only narratives of the training completed, i.e., location, time, number
of attendees in the training etc. After the BSC was implemented, the formats and depth of the
reports have improved a lot. The reports now include client satisfaction, impact on the
institution’s income, cost analysis, etc. This has also led to the development of training on
grant-writing skills, which is part of human resource capacity building. However, due to the
lengthy nature of the scorecard, people actually under-report their achievements. Automation
could have helped a lot (Participant 4).
A key role of an object in an actor-network is to mediate relationships among actors;

thus, it is worth noting improvement of performance reporting through the BSC at the level of
responsibility centres. The interview participants indicated that the BSC facilitated better
management of responsibility centres through clearer definition of the objectives of
departments and individual employees (Participant 4). The participants perceived that the
BSC has enabled better evaluation of the actual performance of individuals because ‘clear
objectives are set [articulating] accountability of the people involved’ and defining
16
expectations (Participant 1). The planning process using BSC helped staff members and
organisational units better understand not only what was expected of them in terms of
accomplishing goals, but also how this accomplishment was to be evaluated. Participant 3
noted that ALERT’s overall performance has improved in recent times, that ‘patient waiting
time has been reduced significantly’, and that ALERT’s latest customer satisfaction survey
results show a 90% level of patient satisfaction. Further, Participant 3 highlighted that the
number of patients treated at ALERT has increased from approximately 200,000 to 300,000
in recent years. This participant attributed ALERT’s performance improvements to the
implementation of BSC, arguing that the planning process has helped early identification of
bottlenecks to find solutions before performance is adversely affected.
Nevertheless, difficulty integrating the BSC with the rigid public sector policies
related to human resource management and administration of finances tended to inhibit the
BSC’s role in performance evaluation. With respect to human resources, the link between the
strategic plan developed using the BSC and the national human resource policy—specifically
the employee performance evaluation system—proved problematic. A nationwide public
sector employee performance appraisal system posed a structural constraint on the possible
use of the BSC as a performance evaluation tool at the organisation level. Biannual employee
performance evaluation is conducted using the civil service evaluation instrument, which
every public sector organisation in Ethiopia is required to use. Government policy requires a
uniform application of staff evaluation, with the ratings allocated using a 25% self-evaluation
score, 37.5% peer evaluation score, and 37.5% supervisor evaluation score, with criteria not
aligned with the BSC perspectives. Supervisors exercise limited influence in the evaluation
rating because the peer- and self-evaluation scores constitute the majority (62.5%) of the
weight of employee performance evaluation. Participant 12 stated:
the performance evaluation of public sector employees is almost arbitrary. The BSC targets
are not referred to at all. It does not matter whether one scores 99% or 10%. Actually, most
employees score 99% only because 100% is not allowed by the government performance
evaluation system of the public sector.
This statement suggests that the role of the BSC object as a link between the managers and
employees is tenuous. This situation reduces the accountability and commitment of
employees to the BSC-based performance metrics. Managers’ lack of discretion regarding
actions to take according to BSC-based performance signifies that the BSC has a limited role
as an object defining accountability relationships between employees and managements.
Even if a manager recognises the outstanding contribution of an employee on the BSC
performance criteria, the manager cannot reward the employee through financial incentives or
other rewards. Salaries are increased uniformly by the government based on the number of
years of service of individuals.
One interview participant trialled conducting employee performance evaluations for
his responsibility centre strictly based on the targets set in the BSC plans. He observed that
this practice resulted in some staff attaining lower evaluation ratings than they were
accustomed to, which generated conflict between the management and staff members of the
section. The employees objected to this practice on the grounds of equity by claiming that
employees of other parts of the organisation were evaluated based on less demanding criteria.
Participant 12 opined: ‘the civil service system performance appraisal is a bottleneck and
needs to be changed. Within the existing performance appraisal system, we try to find ways
to recognise achievements, such as awarding certificates to outstanding employees’.
From the ANT standpoint, the lack of incentive to fully engage with the BSC’s
operation weakens the actor-network. The study participants attempted to address this
17
challenge originating from the structural constraint by providing overseas training
opportunities and granting other benefits to employees that performed well, based on the BSC
criteria. Similarly, Participant 4 introduced some competition among staff members by
requiring them to post their completed scorecards on their office doors. The scorecards were
coloured with green, yellow and red to indicate whether objectives had been achieved. The
participant believed this had a great effect on facilitating staff commitment to using the BSC.
Another innovative example of attempts to address the structural issue is linking
performance and incentives for physicians. The hospital division introduced a policy that a
physician would be granted the opportunity to work in the private wing of the hospital only if
they had seen all patients booked for the day, according to the BSC-based performance target.
This practice has led to no-return of patients who visit the hospital during regular working
hours. It has also helped ALERT respond to the long-term problem of ‘internal brain drain’
outlined earlier in this paper. With respect to part-time work, this problem was particularly
felt due to the difficulty of implementing effective regulations suitable for Ethiopia’s mixed
health sector policy. That is, public sector medical personnel were required to obtain approval
from their employers if they wished to undertake part-time work in the private sector.
However, enforcing this policy proved difficult; thus, medical staff engaged in part-time
work during the evenings and weekends, without obtaining approval from their employers.
The private wing attempted to address the issue of poor compensation, while concurrently
addressing the issue of undermined accountability to patients.
Compared to the human resource management issue, which is relevant largely to the
implementation aspect of the BSC initiative, the financial administration policy as a structural
constraint challenged the validity of the design of ALERT’s BSC. This occurred because the
latter undermined the relevance of the key strategic objective regarding generation and use of
financial resources. For example, ALERT’s research department generates revenues from
research grants. Similarly, other responsibility centres generate income, such as training fees
and service revenues. However, neither ALERT nor the individual responsibility centres
exercise full control over the income generated because the public sector’s financial
administration policy dictates that all income generated be transferred to the coffers of the
government treasury before it can be channelled back to ALERT. This creates a problem for
one of the four perspectives in the healthcare BSC—namely, the goal to ‘improve resource
mobilization and utilization’ (Ethiopian FMH, 2013). As Participant 3 noted:
The research institute is self-sufficient regarding finance, as it obtains research grants.
However, being a public sector institute, it lacks complete authority over the income it
generates. It has to transfer all the income generated to the federal government treasury. As
long as the government’s financial policy does not allow public sector institutions to ‘utilise’
the funds they generate, there is no real motivation to try towards meeting this objective.
This comment signifies that the BSC object does not fully reflect the nature of the
relationships between actors at ALERT and other government agencies, which subsequently
undermines commitment to the BSC.
Amidst the technical and structural constraints encountered, the BSC is perceived as
serving a performance management role, albeit not necessarily in the manner initially
anticipated. Participant 5 stated: ‘life with BSC is better than without, even though we do not
use it to its full potential’. While this statement suggests that the participant held an
essentialist view of the BSC, it also indicates that the participant observed a gap between the
implemented BSC and the desired BSC model. The interview participants emphasised that
the BSC has enabled the organisation to create a shared vision through better articulation of
mission, vision and objectives. They also stated that the BSC allowed individual
18
organisational members to see how their roles fit within the broader organisational mission
(in relation to accomplishing the goals of the organisation) and the goals of the Ethiopian
health sector.
It is also noteworthy that, in contrast to this study’s interview evidence, the FMH’s
official position about the sector’s use of the BSC—published in 2011—reflected the original
framing of the BSC, rather than an account of its implemented version. The FMH stated that
the BSC:
is a strategic planning and management system designed to help everyone in an organisation
understand and work towards a shared vision and strategy. [The BSC] aligns the
organisation’s shared vision with its strategy, desired employee behaviours, and day-to-day
operations … Performance measures are used to inform decision making and show the
progress toward desired results (Ethiopian FMH, 2013, p. 8).
This quotation suggests that the FMH continued to advocate balanced application of the BSC
for strategic planning and performance monitoring. This position may have resulted from the
FMH’s intention to continue improvising the BSC in use, or from the ministry’s attempt to
placate its international stakeholders with the premise that the latter may have a functionalist
view about the BSC; thus, any perceived disparity between the planned and implemented
versions of the BSC may raise concerns regarding funding arrangements. In this respect, the
considerable political significance of BSC adoption as a performance management system
became evident from the fact that the health sector’s BSC initiative was linked to the national
health sector’s goals, which were in turn linked to the country’s commitment to achieving the
Millennium Development Goals (MDGs) and the associated international development
funding that Ethiopia was receiving [4].
Discussion of findings
This study has examined how the role of the BSC in the public sector beyond the
boundary of individual organisations was constituted, and has explored the extent to which
this role translated into practice at the organisation and sector levels. The study conducted an
ANT-based analysis of this relatively novel role of the BSC using case study evidence from
the Ethiopian public health sector. The findings illustrate that the Ethiopian Government’s
developmental state ideology was instrumental in advancing BSC adoption with a trans-
organisational purpose. Ideologically driven public sector reforms that occurred against the
background of a more global institutional framework, within which the Ethiopian
Government interacts with international donor agencies, served as an antecedent to the BSC
adoption agenda. The role of the BSCI as a knowledge elite that facilitated the translation
process was also instrumental in the BSC implementation. This actor played an important
role by developing a conceptual basis of BSC implementation at the sector and organisation
levels. While the study offers insights into the role of the ideological context in facilitating
the constitution of a new trans-organisational role for the BSC, it also highlights the extent to
which actors’ ambitions to use the BSC in this manner were realised.
The BSC was contemplated as a tool to mediate the relations between sector-level
actors and ALERT by serving as an object that links the planning and performance evaluation
of the sector with that of ALERT. This aim underpinned the rationale for the sector-level
adoption of the BSC, with anticipated production of aggregate performance information for
the sector. Nevertheless, the idea of such a balanced emphasis between planning and
performance shifted upon implementation, such that the BSC gave greater emphasis to
strategic planning. That is, the BSC translated into a pragmatic management accounting tool
in a manner that exhibited a shift in emphasis between the planning and performance
19
monitoring aspects of the health sector’s performance management. The top-down approach
followed in the translation process meant that piloting of the BSC system was conducted at
the FMH—the policy-making organisation—rather than at a policy-implementing
organisation, such as ALERT. This suggests that emerging issues faced upon cascading to
ALERT shaped the practical role of the BSC in new ways not anticipated in the original
framing. In particular, the technical and resource issues associated with software needs that
were not considered at an earlier stage of the cascading process challenged the contemplated
role of the BSC at the sector level. The present study offers insight into how the link between
planning and performance evaluation plays out in the context of a mandated BSC adoption in
the public sector.
The interview evidence indicates that the BSC supports performance management in a
rather indirect manner. That is, better planning and target setting that resulted from the use of
the BSC at ALERT facilitated performance monitoring at the level of the individual
responsibility centres. Nevertheless, while ANT enables in-depth understanding of
development of phenomena and thus facilitates theory formulation, it does not support
theory-testing type of research (Cresswell et al., 2010) to empirically explore the link
between BSC use and organisational performance. Thus, future research aimed at developing
and testing hypotheses needs to supplement the ANT with other suitable theories.
The organisation-level use of the BSC as a performance management system was also
influenced by the incompatibility of the BSC with other management systems that have an
overriding effect. Similar to Uddin and Tsamenyi’s (2005) observation that political influence
can affect management accounting, the evidence in the present study shows the role of
political ideology in restricting flexibility in the use of performance appraisal systems. An
inflexible performance evaluation and reward system—that allows little managerial
discretion to reward highly performing employees or sanction poorly performing
employees—posed a structural constraint that shaped the performance monitoring role of the
BSC at the organisation level as well. As a result, the performance monitoring role of the
BSC emphasised in the initial framing was eventually subordinated to an overriding national
public human resource policy that inhibited flexibility to accommodate a full range of
employee performance dimensions aligned with the BSC system. The centralised financial
administration policy also inhibited the performance fostering potential of BSC use because
inflexible financial administration policy limited financial resource generation and use at
ALERT. The structural constraints on the BSC use were associated with the politico-
ideological context that advocated centralised, sector-level decision making on organisation-
level issues. From a theoretical perspective, the findings of this study also illuminate the role
of actor-networks in introducing change (Briers and Chua, 2001) by providing case study
evidence of how the introduced new management accounting ideas interact with existing
systems.
The findings demonstrate the constitutive role of the BSC. That is, the implemented
BSC system was perceived worthwhile, despite having a considerably altered emphasis
between planning and performance evaluation. Further, the ambition of the leadership of the
health sector that advocated BSC adoption did not solely determine the final framing of the
BSC. This phenomenon illustrates the resilience of the BSC because it was able to be adapted
to new roles that made BSC adoption worthwhile, despite the initial anticipated purpose of
BSC adoption proving unachievable. The BSC also enabled achievement of enhanced
strategic alignment by shaping employees’ way of thinking about their role in the context of
sector-wide strategic goals.
The evidence presented in this study supports the ontological position of Busco et al.
(2007), which illustrates the fluidity of the BSC idea and thereby challenges a purely
20
essentialist stance that assumes the BSC as a tool with permanent, innate and unalterable
functional attributes. This suggests the need for contextually grounded studies of
management accounting change in general, and BSC adoption and use in particular. This
study’s choice of ANT attends to this need because the theory’s ontological stance enables
consideration of the complex politico-ideological and technical factors that can produce a
shift in emphasis among the multiple roles of the BSC. From this perspective, this study has
explained how an initial framing of the BSC for ALERT was altered through a shift in
emphasis between the major aims of the BSC stipulated in the original framing. Given that
the process by which the BSC comes to be modified remains largely under-researched
(Northcott and Taulapapa, 2012), the ANT approach enhances understandings of BSC
adoption, particularly in the context of a developing economy.
This study heeded van Helden and Uddin’s (2016) call to use theories that enable
better understanding of this process, and responded to their concern that prior studies have
neglected the link between context and management accounting practices in developing
economies. The current study’s use of a developing country’s empirical setting also
contributes to understandings of international variations in the design and use of the BSC.
This contributes to the largely neglected area of public sector BSC research on developing
countries (Hoque, 2014). At a more general level, this study contributes to the BSC adoption
literature in the public sector context by providing evidence on the role of political ideology
in facilitating externally dictated adoption of management accounting systems in public
sector organisations. By using a context where the BSC was adopted as a means of tracking
progress towards strategic goals, this study has also attempted to respond to Modell’s (2012)
call for sector-wide studies of BSC use, and Kaplan’s (2012, p. 539) concern that academic
discourse has tended to ignore the role of the BSC in ‘strategy execution’.
Conclusion
The practical role and internal architecture of the BSC cannot be determined a priori.
This study shows that, while the politico-ideological context facilitated the emergence of a
relatively novel role for the BSC as a trans-organisational system of performance planning
and monitoring, the practical role of the BSC is shaped by pragmatic considerations. The
findings illustrate the implementation of a trans-organisational use of the BSC as a sector-
level planning and performance evaluation system for organisations interlinked through
sector-wide strategic goals. The case study evidence shows that BSC adoption can be
understood as a process that involves translations that could modify the commonly
understood design of the tool and how it is used in practice. The BSC can be conceptualised
as having evolving boundaries and internal architecture.
While the adopted BSC model did not fully address the problematisation that
facilitated the BSC adoption idea, a pragmatic aim emerged in the process. The initial
framing of the BSC as a sector-wide planning and performance monitoring system was
redrawn into a narrower boundary due to the incongruence between the initial framing of the
BSC model and the public sector’s human resource and financial administration policies, as
well as due to shortcomings in the accompanying information technology infrastructure. The
BSC constituted a particular way of thinking that enabled fostering of sector-wide strategic
alignment, consistent with the pragmatic shift in the actual role of the BSC. This shows that
the BSC is amenable to investigation as a fluid and adaptable system that transforms through
the interactions of actors. This methodological approach enables understanding of the
diversity of forms that the BSC may take when being implemented in public sectors of
developing countries, including, but not limited to, Africa. It also enriches understandings of
21
the role of the BSC as pragmatically determined and its adoption as more complex than the
linear diffusion that an essentialist interpretation suggests. Interest in studying the BSC
comprehensively from the social and technical perspectives, rather than merely from a
functionalist perspective, necessitates taking such a point of departure from the common
conceptualisation of BSC adoption and use as a rationally-driven phenomenon with
predetermined aims, boundaries and internal architecture.
In light of the exploratory nature of the case study evidence that this study has
offered, this paper concludes by underscoring the need for future research to refine and enrich
understandings of BSC use, particularly in developing economies. In this regard, the use of
the BSC as a tool for public policy implementation spanning multiple organisations warrants
further research to understand how the framing of the BSC develops in this context. Future
BSC research of a comparative nature—within or across developing countries—could also
enrich understandings of the tool regarding the possible contribution of the BSC to
organisational performance, as suggested by this study’s interview evidence. Future research
could test hypotheses in this regard using suitable research design.
Notes
[1] The EPRDF has been in government since 1991.The EPRDF is a coalition of four political parties
established based on ethnic lines: the Tigray People’s Liberation Front (established in 1974—the
founding member and dominant of the four parties), the Amhara National Democratic Movement
(established in 1981), the Oromo People’s Democratic Organisation (established in 1990) and the
South Ethiopian People’s Democratic Movement (established in 1993).
[2] See Latour (1987) for another version of translation in ANT, and Robson (1992) for research on
the application of this version in accounting research.
[3] Amharic is the official language of the Federal Government of Ethiopia. Both authors are of
Ethiopian origin and are fluent in the local language of Amharic.
[4] The MDGs highlight priority areas, such as reducing child mortality, improving maternal health,
and combating HIV/AIDS and other diseases (WHO, 2005, p. 11).
22
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Normak, K., Botchewey, K., Stein H. and Stigliz, J. (Eds), Good Growth and Governance in Africa: Rethinking
Development Strategies, pp. 140-74.
Zimeta, M.G. (2010), "Ethiopia’s election results and the myths of African politics", The Atlantic, 24 June,
available at: http://www.theatlantic.com/international/archive/2010/06/ethiopias-election-results-and-the-myths-
of-african-politics/58623/ (accessed 12 November 2016).
28
Tables
Table 1: Interview details

Participant Institution Organisational Highest academic Interview Interview
code Unit qualification date length
Participant 1 FMH Policy Analysis and MSc 3 December 2013 80 minutes
Planning
Participant 2 FMH Policy Analysis and BSc 3 December 2013 50 minutes
Planning
Participant 3 ALERT Policy and Planning Bachelor Degree 10 January 2015; 164 minutes in
01 December 2015; three rounds
9 March 2016
Participant 4 ALERT Training Division Doctor of Medicine 10 January 2015 60 minutes
Participant 5 ALERT Research Division Doctorate in Biomedical 28 January 2015 62 minutes
Science
Participant 6 ALERT Reform and Quality Master Degree 28 January 2015 24 minutes
Management
Participant 7 ALERT Hospital Division Doctorate 3 February 2015 43 minutes
Participant 8 ALERT Training Division Doctor of Medicine 3 February 2015 28 minutes
Participant 9 ALERT Hospital Division Bachelor Degree 6 February 2015 46 minutes
Participant 10 ALERT General Service Not provided 6 February 2015 16 minutes
Participant 11 ALERT General Service Diploma in ICT 6 February 2015 13 minutes
Participant 12 ALERT Health Information Master of Science in data 10 December 2015 70 minutes
Technology Division processing engineering
Participant 13 ALERT Supply and Finance BA in Accounting 16 December 2015 75 minutes
Division
1
Table 2: Goals and strategic results
Pillars Strategic results
Excellence in service delivery Community who practice and produce best health practices and
have accessible quality healthcare
Excellence in leadership and An ensured community accessing standardised health facilities
governance that are well equipped, supplied, maintained, ICT networked and
staffed with motivated employees
Excellence in health infrastructure and Protected public interest through policy guidance, ensured
resources accountability and transparency, informed decision making,
improved collaboration, equitable and effective resource
allocation
Table 3: BSC perspectives and measures adapted for Ethiopian health sector (adapted)
BSC Perspectives
Community (C) Fund generation Internal business processes (P) Capacity building
and utilisation (F) (CB)
Objectives C1: Improve access F1: Improve P1: Improve quality of health CB1: Improve human
to health financial P2: Improve public health capital and
services mobilization & emergency preparedness leadership
C2: Improve utilization community & response CB2: Improve health
community ownership infrastructure
ownership P3: Improve pharmaceutical
supply & services access to
health services
P4: Improve regulatory system
P5: Improve evidence-based
decision making;
harmonization and alignment
Mission: Reduce morbidity, mortality and disability and improve health status of the Ethiopian people through
providing and regulating a comprehensive package of promotive, preventive, curative and rehabilitative health
services via a decentralized health system
Vision: See healthy, productive and prosperous Ethiopia
2
Table 4: The translation of the sector-level BSC objectives to ALERT
BSC Perspective Sector objectives ALERT objectives
Community (C) C1: Improve access to health services C1: Increase patients, trainees and stakeholder
C2: Improve community ownership satisfaction
C2: Enhance community engagement
Fund generation and F1: Maximise resource mobilization & F1: Improve resource mobilisation & utilisation
utilization (F) utilization
Internal business P1: Improve quality of health services P1: Strengthen networking and partnership
processes (P) P2: Improve public health emergency P2: Improve quality of service
preparedness & responses P3: Improve supply chain & logistics
P3: Improve pharmaceutical supply & services management
P4: Improve regulatory system
P5: Improve evidence-based decision making:
harmonisation and alignment
Capacity building CB1: Improve health infrastructure CB1: Enhance quality of infrastructure and
(CB) CB2: Improve human capital and leadership equipment
CB2: Enhance ICT utilisation
CB3: Improve human capital
3
Figures
FMH
Board of Directors
Chief Executive Officer
Management
Committee Ethical Review
Legal Services Audit Services
Strategic Planning Services Reform & Quality

Management Services
Ethics Services Public Relations Service
Finance, Supply, G. Service & Human Resource management

Property Management
Information Communication
T. Services
Clinical Services (Hospital) Training Services Research Services
Figure 1. ALERT’s Organizational Structure
1
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Figure 2. ALERT’s Strategy Map

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Public sector reforms and balanced scorecard adoption: an Ethiopian case

Article in Accounting Auditing & Accountability Journal · May 2017

Belete Jember Bobe Dessalegn Getie Mihret

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Degefe Duressa Obo

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Design/methodology/approach—The study employs the case study method. It analyses

Originality/value—The study provides a theory-based explanation of how politico-

Paper type—Research paper

Keywords—balanced scorecard; actor–network theory; Ethiopia; framing and overflowing;

Analytical framework and research questions

ALERT as part of a sector-wide performance management system. ANT has multiple

<Insert Table 1 here>

Analysis of case study evidence: BSC adoption by ALERT

ALERT runs a teaching hospital—operating with a 240-bed facility—that serves patients

<Insert Figure 1 here>

Public sector reforms and ALERT’s BSC adoption

Conceptual specification of the BSC for the Ethiopian health sector

<Insert Table 2 here>

<Insert Table 3 here>

Cascading the BSC to ALERT

Phase 1—Adaptation of FMH’s BSC design to ALERT’s context: A series of

<Insert Figure 2 here>

Here, the Champions Team consolidated the emerging actor-network by defining

<Insert Table 4 here>

patients—categorised by level of case complexity—was agreed to be a reasonable basis to

A key role of an object in an actor-network is to mediate relationships among actors;

ALERT, (2015), ALERT Strategic Plan (2015-16), Addis Ababa, Ethiopia.

Ethiopian Government (2012), "Government overview", available at:

reply", Financial Accountability & Management, Vol. 29 No. 1, pp. 111-5.

Lowe, A. (2001), "Accounting information systems as knowledge-objects: some effects of objectualization",

Management Accounting Research, Vol. 12, pp. 75-100.

Nigussa, F. (2013), "Reconsidering civil service reform in Ethiopia", available at:

WHO (2005), Health and Millennium Development Goals, WHO, Geneva.

WHO (2015), "Ethiopia: WHO statistical profile", available at:

Worldometers (2016), "Ethiopia population", available at: http://www.worldometers.info/world-

Table 1: Interview details

Vision: See healthy, productive and prosperous Ethiopia

Chief Executive Officer

Legal Services Audit Services

Strategic Planning Services Reform & Quality

Finance, Supply, G. Service & Human Resource management

Clinical Services (Hospital) Training Services Research Services

Figure 1. ALERT’s Organizational Structure

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