Financial Accountability & Management, 27(3), August 2011, 0267-4424

ADOPTION OF THE CONCEPT OF A BALANCED SCORECARD WITHIN NSW HEALTH: AN EXPLORATION OF STAFF ATTITUDES
MARIA CADIZ DYBALL, LORNE CUMMINGS AND HUA YU

INTRODUCTION

The implementation of the Balanced Scorecard (BSC) as a strategic management tool is an area which has had limited research coverage (Tuomela, 2005; and Malmi, 2001). Whilst the concept of the BSC has had broad application by the health sector internationally (e.g., Villalbi et al., 2007; ten Asbroek et al., 2004; Wyatt, 2004; Zelman et al., 2003; Le Grand et al., 1998; and Macdonald, 1998), moving from concept to practice has often proved difficult (Ukko et al., 2007; and Chow et al., 1998). Some argue that its founders Kaplan and Norton are not forthcoming with their guidance on how to implement the BSC (Ahn, 2001; and Butler et al., 1997). The practical reality of a successful design and implementation of the BSC appears to be much more challenging and dependent upon access to time, resources and staff commitment (Woods and Grubnig, 2008; and Wisniewski and Olafsson, 2004). Kaplan and Norton (2001) concede that major management and staff commitment and effort are required for its implementation. Indeed the potential of employees to impact the development and implementation phases of all performance measurement systems is an area where more research could be done (Ukko et al., 2007). This paper reports on staff attitudes towards the adoption of a BSC concept in New South Wales Department of Health (NSW Health) in Australia, at its head office in Sydney and one of its area health services in the Hunter New England Area (HNEH). The interest on staff attitudes is predicated on a view that attitudes influence staffs intentions to use a system (Jarrar et al., 2007; Pierce and ODea, 2003; and Agarwal and Prasad, 1998).

The authors are from the Department of Accounting and Finance, Macquarie University, Sydney. They appreciate the support of the executive directors, management and staff at NSW Health, in particular Dr. Robert McDonald and Ms Jennifer Jennings. The authors are also thankful for feedback of the 2008 seminar and conference attendees at the Centre for Accounting and Auditing Research, Nanyang Technological University, Singapore; Department of Accounting and Finance, Macquarie University, Sydney; Global Management Accounting Research Symposium and Accounting and Finance Association of Australia and New Zealand Conference. This project was funded by the Department of Accounting and Finance at Macquarie University. Address for correspondence: Maria Cadiz Dyball, Department of Accounting and Finance, Macquarie University, Sydney, NSW 2109, Australia. e-mail: maria.dyball@mq.edu.au
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Both the management accounting and information technology (IT) literatures acknowledge that the expected benefits of a system application cannot be realised if staff do not accept the system for task performance (Woods and Grubnig, 2008; Wisniewski and Olafsson, 2004; Scapens and Roberts, 1993; and also see Bhattacherjee and Sanford, 2006). The IT literature embraces the view that the implementation of systems must be addressed at different levels including the semantic and psychological impact of the system on users (DeLone and MacLean, 1998 and 2003).1 The semantic level focuses on the precision of conveying to the user the meaning and purpose of the information generated by the system whereas the psychological level concentrates on the influence of the system on user behaviour. In this paper we draw inspiration from Davis et al.s (1989) Technology Acceptance Model (TAM), which was originally conceived to better understand attitudes and intention of employees to use computer technologies. The model has applications in management accounting (Islam and Kellermanns, 2006; and Kellermanns and Islam, 2004) and in other disciplines (Phillips et al., 1994). The model is able to accommodate normative and empirical claims of the usefulness and ease of use of the BSC. TAM predicts that employee perception of ease of use and usefulness of a system impacts on employee attitudes and intention to use a system. The study therefore answers two research questions on perceptions of staff in NSW Health at its Sydney head office and HNEH of the BSC: (1) how perceived usefulness and perceived ease of use of the BSC are related to attitudes toward, and consequent intention to use the BSC; and (2) how job level, functional speciality and degree of participation predict the perceived usefulness and perceived ease of use of the BSC. The remainder of the paper comprises five sections. The first section reviews academic literature on the implementation of the BSC with particular emphasis on the health sector. The second section provides background information on NSW Health and HNEH and describes the basis for a BSC adoption. The third section presents the research methodology and the fourth section contains the results, validity tests and analyses of findings. The final section concludes and identifies limitations and areas for further research.
LITERATURE REVIEW

Since its inception by Kaplan and Norton in 1992, the BSC has evolved into a holistic methodology that converts organisational vision and strategy into an inclusive set of performance measures (Voelker et al., 2001). It is considered to be one of the major theoretical innovations in performance measurement (Otley, 1999 and 2003; and Ittner and Larcker, 1998) and more importantly, has the ability to link performance measures with business strategy, thereby assisting managers in strategy implementation (Otley, 1999). However, there is a view that rhetoric is not convincingly supported by empirical evidence, in particular, that the BSC is able to improve organisational performance

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and if so, how it is able to do so (Davis and Albright, 2004; Norreklit, 2003; and Speckbacher et al., 2003).2 Nonetheless, the application of the BSC now extends beyond the profit sector, and is even purported to be equally useful in public management (Johnsen, 2001; also see Inamdar and Kaplan, 2002; and Kaplan and Norton, 2001). In a review of research on the BSC in healthcare organisations, Aidemark and Funck (2009) observe that recent areas of interest are on demonstrating financial gains and improved feedback for clinicians on patient care, and benchmarking performance. To redress the little guidance from its founders on how to implement the BSC (Ahn, 2001; and Butler et al., 1997), researchers have identified enablers and barriers to its successful implementation (e.g., Assiri et al., 2006; Radnor and Lovell, 2003; and Kasurinen, 2002). Assiri et al. and Kasurinen focus on private sector implementations whilst Radnor and Lovell investigate the application of the BSC within the health sector. Interestingly, normative literature on the implementation of the BSC in the private sector tends to emphasise design issues, management commitment and external or internal exigencies necessitating change, whilst relevant literature in the health sector focuses on individual staff acceptance. Perhaps this focus reflects the new public management mantra in the public sector and provides credence to Kim (2002, p. 231) who states that one of the leading challenges in public management has been implementing effective human capital strategies to enhance government performance and accountability. It also highlights staff acceptance as a key element in a successful BSC implementation which in turn provides legitimacy to the new system (Woods and Grubnig, 2008; Wisniewski and Olafsson, 2004; and Scapens and Roberts, 1993). Radnor and Lovell (2003) in their evaluation of the BSC within the Bradford health sector in the United Kingdom (UK) identify factors that could facilitate its successful adoption. Top on their list is demonstrating to individuals how the BSC system could add value over existing performance management systems. Second, is developing the BSC at a strategic level to allow accurate evaluation of the scale of compromises that practical deployment of the BSC at lower strategic/tactical levels will require. Third, is implementation of the BSC at various levels within the organisation resulting in a chain of linked BSCs. This factor extends to the identification of key performance indicators (KPIs) to be included in the BSC, as it could be difficult for employees to make an unbiased decision regarding which KPIs to use (Chan, 2006). This difficulty is not rare in the few studies on BSC implementation across sectors (see Banker et al., 2004; and Youngblood and Collins, 2003) although Pineno (2002), using an incremental approach to test the cause and effect relationships of BSC measures in hospitals in Ontario Canada, found that measures can reflect hospital objectives. Voelker et al. (2001) studying issues in developing a BSC in the US health sector, anticipated a significant level of resistance from employees at the initial stage. Inamdar and Kaplan (2002) confirm that fear was a challenge in BSC

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development and implementation, which required time to mitigate. A related problem is identified in a review of the US health sector by Zelman et al. (2003), who found that senior and front-line managers opposed the BSC when it was imposed by external parties suggesting that employee involvement in the conceptualisation and development of the BSC is a contributing factor to its successful adoption. The impact of external imposition is reflected in the introduction of the BSC in New Zealand (NZ) hospitals, which was mandated. Northcott and France (2005, p. 44) thus caution that it cannot be assumed that NZ hospitals BSC will permeate practice and decision-making to the point of having any substantive impact on hospital management. The brief literature review on the BSC in the health sector reveals that individual staff acceptance is an essential element in its successful implementation (Aidemark and Funck, 2009; Northcott and France, 2005; Radnor and Lovell, 2003; Zelman et al., 2003; Inamdar and Kaplan, 2002; Voelker et al., 2001; and also see Kaplan and Norton, 2001). Individuals must be shown how the BSC system could add value over existing performance management systems. This process is known as addressing the semantic level of system application, where the meaning and purpose of the system is conveyed to the user (DeLone and MacLean, 1998 and 2003). The resistance and fear from healthcare staff highlights the psychological aspect of a system application where staff behaviour toward a system is addressed. This study focuses on the semantic and psychological levels of BSC implementation and investigates the impact of factors including perceived usefulness and ease of use of the BSC on individual staff attitudes toward the BSC in a healthcare setting in Australia. Thus the paper is able to provide suggestions on how employee resistance and fear of the BSC could be overcome.
IMPLEMENTATION OF THE BSC IN NSW HEALTH

The New South Wales Hunter New England Health Service (HNEH) is one of eight Area Health Services of the New South Wales Department of Health (NSW Health). The Area Health Services are responsible for providing health services across a wide range of settings, from primary care posts in the remote outback to metropolitan tertiary health centres. HNEH provides rural services and was created on January 1, 2005. HNEH provides care for approximately 840,000 people, covers a geographical area of over 130,000 square kilometres, and has approximately 14,500 staff, 1,500 medical officers and 1,600 volunteers. It provides health services to 12% of NSWs population, and 20% of the States Aboriginal population. It spans 32 local government areas and spends A$1.3 billion (approximately US$1.2billion)3 per annum (approximately 12% of the 2006-07 NSW Department of Health budget) (NSW HNEH, 2008a). HNEH has priorities and goals that are underpinned by both the State Plan and the seven strategic directions for NSW Health. NSW Healths goals are: to keep people healthy, to provide the health care that people need, to deliver high

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quality services and to manage health services well. HNEH sets out to achieve the seven strategic directions in the State Health Plan. It has its Area Strategic Plan, which identifies strategies and initiatives for attaining these directions and measures to assess their degree of attainment. The seven strategic directions are to: 1. Make prevention everybodys business, 2. Create better experiences for people using health services, 3. Strengthen primary health and continuing care in the community, 4. Build regional and other partnerships for health, 5. Make smart choices about the costs and benefits of health services, 6. Build a sustainable health workforce, 7. Be ready for new risks and opportunities (NSW HNEH, 2008b). In 2003, prior to a merger in 2005 with adjacent local government areas, the Hunter Area Health Service (AHS) pioneered a BSC performance framework (see Appendix A for 2007 version) that identified areas of responsibility (IPART, 2003 as cited by Northcott and France, 2005). The aim was to use multi-dimensional information to translate HNEHs vision and purpose into specific goals and actionable items, to ensure that the health system fulfils public expectations. In 2003 it was reported that:
the balanced scorecard model has been accepted very well within Hunter AHS. Staff feel that it provides them with clear directions, encourages organisational alignment, focuses on what is important, and is comprehensive and credible (Northcott and France, pp.40-1, citing IPART, 2003).

HNEH has continued with the BSC framework since the 2005 merger with Hunter AHS staff gaining considerable hands-on experience. The BSC concept adopted by the Head Office in Sydney is different from that of HNEH, the former being developed by a NSW Health System Performance Indicator Committee in 2003. The committee drew a minimum set of indicators that would be relevant at all levels within health. The final indicator set has created a health dashboard that allows monitoring of strategic directions while providing an early warning system for any necessary remedial action. The dashboard contains 20 high-level indicators designed to provide better accountability for government; better information for strategic management at the Departmental and Board/Health Service level, and better alignment of effort at the clinical/operational level (NSW Health, 2008b). This project is therefore timely in seeking to elicit and analyse staff attitudes toward the BSC concept to enable an appreciation of staffs behaviour, that is, a sense as to whether staff will use the BSC in performing their tasks. Until 2007 when this study was conducted there had been only a partial roll-out of the BSC at HNEH.
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DYBALL, CUMMINGS AND YU RESEARCH METHODOLOGY

Theoretical Framework
Attitudes toward the BSC of NSW Health staff in the Sydney Head Office and HNEH are investigated using a theoretical framework which incorporates key concepts from Davis et al.s (1989) Technology Acceptance Model (TAM). The model is adapted to incorporate a number of variables identified in the academic literature as critical for staff acceptance and use of a system (see the second section previously; and also see Davis et al., 1989). The TAM was conceived to explain user acceptance of computer technology, and various studies in the IT literature found the model to have good predictive power (e.g., Karahanna et al., 2006; Bhattacherjee and Sanford, 2006; Calantone et al., 2006; Venkatesh et al., 2003; and Venkatesh and Davis, 2000). TAM proposes that individual perceptions of usefulness and ease of use of a system influences their general attitudes and intention to use it. Perception of an object is an important factor affecting individuals attitudes and behaviour toward it (Jarrar et al., 2007; Warren, 2006; Pierce and ODea, 2003; and Agarwal and Prasad, 1998). Perception is an outcome of a process where individuals represent objects in the world around them. In the management accounting literature the TAM has already been applied to assess user perceptions of the ease of use and usefulness of the BSC and activity-based costing system (Islam and Kellermanns, 2006; and Kellermanns and Islam, 2004). We continue this area of research using the case of NSW Health to anticipate whether staff will reject or accept the BSC. The theoretical framework is presented in Figure 1. The key concepts in the TAM are Perceived Usefulness (PU), Perceived Ease of Use (PEU), General Attitudes and Intention to Use. PU is defined as the degree to which a person believes that using a particular system would enhance

Figure 1 Theoretical Framework

Job Level (Director/manager vs Non-director/ manager)

Original TAM Model Perceived Usefulness

Degree of Participation Perceived Ease of Use

General Attitudes

Intention to Use

Functional speciality (Clinician vs Nonclinician)

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his or her job performance (Davis, 1989, p. 320). PEU, on the other hand, is the degree to which a person believes that using a particular system would be free of effort (Davis, 1989, p. 320). For this study, the concepts of PU, PEU, general attitudes and intention to use were operationalised to accommodate previous research and normative statements on usefulness of the BSC at both organisational and individual level. Additional related variables identified in the psychology and accounting literatures were also incorporated to propose a theoretical framework. A concept incorporated in the theoretical framework is participation, defined here as user behaviours and activities with respect to a given system. Barki and Hartwick (1994) find that employees who participate in the development process of a technology or system will tend to develop a positive attitude toward it because of their better understanding of the merits of the innovation and its benefits to individual employees (also see Kloot and Martin, 2000; Argyris and Kaplan, 1994; Hartwick and Barki, 1994; and Milani, 1975). Research by Northcott and France (2005) on the adoption of the BSC concept in NZ hospitals suggests that the long-term acceptance of the BSC could be built up by employee participation including, for example, staff engagement to ensure that the choice and design of KPIs truly reflect the strategies and goals of the organisation. Participation therefore also provides employees an opportunity to develop their skills in BSC design. This leads us to the following hypotheses: H1a : Participation is positively related to perceived usefulness (PU) of the BSC. H1b : Participation is positively related to perceived ease of use (PEU) of the BSC. Job level and functional specialty are the second and third variables explored in this paper as influencing PEU and PU. Job level is operationalised at two levels: (1) A Director at the Head Office or manager at HNEH, and (2) A Non-director of NSW Health or non-manager at HNEH. Functional specialty is identified through the nature of the departments and for our purposes we segregated clinicians from non-clinicians. The view that these variables influence PEU and PU is based on research findings that employees at different levels of the hierarchy and in different functional groups experience different demands, requirements, job expectations and attitudes (Adams et al., 1977). Adams et al. also found that the interaction of job level and functional speciality had a significant effect on job attitudes. That is, even at the same job level, people from different functional specialities have different job attitudes. Furthermore, they predicted that members in similar organisational functions would have a greater tendency to share common attitudes than members from different functions. Strebel (1996) claims that the differing views of managers and employees on change is a common cause of difficulties in the introduction of new systems. Top-level managers often perceive change as an opportunity whereas for many

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employees change is neither sought after nor welcomed (Kasurinen, 2002). A common feature of health sector reform in many countries has been a managerial approach to health sector management which has resulted in the emergence of a clinico-managerial grouping within the medical professions in Germany, Italy and the UK, that assumes financial and managerial responsibilities (Jacobs, 2005). Bradley and Parker (2006) find that Australian public sector managers have an external focus and are more interested in the strategic direction of the organisation compared to lower level employees. They also observe that many managers have participated in numerous seminars and training activities promoting the new management framework, and would be expected to have embraced the prescriptions of managerialism. Given that the BSC is an innovation in NSW Health and HNEH, has a strategic focus, and reflects managerialism in the public sector (see Hood, 1995), we propose the following hypothesis: H2 : Directors and managers will have a higher PU and PEU compared to non-directors and non-managers. Early research on teams in a general hospital in the US (Hrebiniak, 1974) found that different job functions have a significant impact on interpersonal trust and commitment by task unit members. Findings of a comparative study of 850 staff located in four English and two Australian hospitals highlighted marked differences between the values and beliefs of respondents from medical and nursing backgrounds (Degeling et al., 1998).
Nursing staff had collective orientations compared with the individualism of medicine and of the centrality to the professional/personal identity of medical respondents of their claimed right to self define, self describe and self validate their work (Degeling, 2000, p. 12).

Generally doctors have also been seen as antagonistic to accounting practices which are considered a threat to the fundamental values of the medical profession (Jacobs, 2005; and Jones and Dewing, 1997). Particularly on the BSC, Aidemark (2001) found that not all medical professionals welcomed its adoption. Hospital managers were interested in the BSC, but some doctors thought why measure at all? believing that BSC measurements were useless. In contrast, research by Bilkhu-Thompson (2003) on the implementation of the BSC in an emergency medicine service system in the US, indicated that medical professionals had more understanding of the BSC than employees within support departments. This leads us to the following hypothesis: H3 : Non-health staff will have a higher PU and PEU compared to health staff. Following Davis et al.s (1989) TAM, the following relationships between the remaining variables are expected:
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H4 : PU is positively related to general attitudes. H5 : PEU is positively related to general attitudes. H6 : PEU is positively related to PU. H7 : PU is positively related to intention to use. H8 : General attitudes are positively related to intention to use. Across the many empirical tests of TAM in the IT literature, PU has consistently been correlated with usage intentions, with standard regression coefficients typically around 0.6 (Vankatesh and Davis, 2000, p. 187). PEU, on the other hand, has exhibited a less consistent relationship on intention across many studies.

Method
Employee perceptions of the BSC in the NSW Health Service were obtained using targeted mail-out questionnaires. The questionnaire consisted of a total of sixty-two (62) multiple-choice questions covering six sections: background, perceived usefulness, perceived ease of use, participation, general attitudes and intention to use4 . The questions were adapted from previous research that operationalised the constructs, usefulness (Kaplan and Norton, 1996; and Davis, 1989); perceived ease of use (Davis, 1989); participation (Kaplan and Norton, 1996; Barki and Hartwick, 1994; Milani, 1975; and White and Ruh, 1973); general attitudes (Venkatesh and Davis, 2000; Ferguson, 1997; Taylor and Todd, 1995, and Milani, 1975), and employees intention to use (Bhattacherjee and Sanford, 2006; and Calantone et al., 2006). A five point Likert scale (Strongly Disagree, Disagree, Indifferent, Agree, and Strongly Agree) was used for the last five sections. The Operational Director at HNEH assisted the authors in identifying one hundred and seventy six (176) potential respondents, who were registered attendees of BSC workshops held at HNEH in 2007. The workshops cover general information on BSCs, how the BSC is used in HNEH, what the attendees roles are, the benefits of using a BSC, as well as the development of BSCs for represented subunits using the HNEH framework. Attendees are also provided assistance with procedures for data collection, reporting and use. The Director of Demand and Performance Evaluation of the Health System Performance Division at the Sydney Head Office identified a further seven respondents; a total of 183 target respondents. The survey was targeted to individuals familiar with the BSC approach, who would have felt that they possessed sufficient knowledge to respond to the questionnaire. Familiarity with the concept was needed, in order to avoid the return of questionnaires with invalid data. The findings will resonate with the management of NSW Health in predicting if staff would apply the BSC in their task performance and indeed caution must be applied in extrapolating results from this study to other settings.5

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The Partial least squares (PLS) approach was used to analyse survey results because of its minimal demands on measurement scales, residual distributions and sample size (Chin, 1999 and 2007). PLS allows sample sizes to be much smaller (n < 100) (Smith and Langfield-Smith, 2004). The PLS approach is also suitable in studies where there is low theoretical information and the goal is prediction (Jreskog and Wold, 1982). Based on a system of interdependent reo gressions, the PLS path analysis makes several types of predictions, one for each regression in the system. In this project, the authors adapted Davis et al.s (1989) TAM to incorporate normative claims and insights from the accounting and psychology literatures. Thus, this study is exploratory rather than a confirmatory investigation of a robust theoretical model in the accounting literature. The PLS path analysis approach, however, has its followers in the accounting discipline (e.g., Abernethy et al., 2007; Moulang 2006; Chenhall, 2005; Anderson et al., 2002; Vandenbosch, 1999; and Ittner et al., 1997). Indeed Smith and LangfieldSmith (2004, pp. 78-9) encourage researchers in management accounting to use the PLS path analysis to promote theory development.
FINDINGS AND ANALYSIS

Response Rate and Demographics

A total of 48 questionnaires were returned from the 183 targeted participants; an overall response rate of 26.23%.6 Six of these questionnaires were received from the Sydney Head Office; a response rate of 85.71%. The other 42 questionnaires were received from the 176 targeted respondents from the HNEH; a response rate of 23.86%. Forty-seven individuals out of the 48 returned questionnaires had complete demographic information. Of the 47, 30 were female (63.83%) and 17 were male (36.17%). Many (n = 23) of the respondents were in the age range of 45-54 years old (1 = 25-34 years old; 13 = 35-44 years old; 10 = 55+ years old). Of the 42 respondents from HNEH, the two most represented divisions were Population Health, Planning and Performance (38.10%) and Clinical Operations (33.33%). A majority of the respondents were also working in non-clinical related positions (61.71%). A further category of key respondents included directors/managers in clinical health. Respondents (n = 3) who chose other as their functional area, and did not specify their position, were treated as missing data. As it is impossible to identify whether the people who identified Allied Health as their functional area were managers or not (there is no option given for them to choose), they were also treated as missing data when analysing the manager/non-manager distribution. Table 1 illustrates the function speciality and position/job level of the 44 remaining respondents. A majority of respondents (63.83%) held a postgraduate degree, and all health category of employment respondents possessed either an undergraduate or a postgraduate qualification. By comparison, people in the non-health category of employment had education ranging from secondary school to postgraduate.
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Table 1 Function Speciality and Position Level

Clinician Director/Manager Non-Director/Manager Total 13 (29.54%) 2 ( 4.55%) 15 (34.09%) Non-Clinician 19 (43.19%) 10 (22.72%) 29 (65.91%) Total 32 (72.73%) 12 (27.27%) 44 (100%)

Descriptive Statistics Measurement of Variables

The mean values of all measures in each construct have a theoretical range from one to five. All 48 responses were used to calculate the descriptive statistics of five constructs. The mean value in Table 2 is the mean value of all respondents answers in each construct respectively. All the means are between three and four, indicating a slight agreement overall.

Table 2 Descriptive Statistics Measurement

Number of Items 20 11 9 10 4 Number of Respondents 48 48 48 48 48 Std. Deviation 0.6354 0.5637 0.7576 0.5589 0.8466 Actual Range Minimum 1.70 2.36 2.00 1.90 1.25 Maximum 5.00 4.82 5.00 4.40 5.00

Construct Perceived Usefulness Perceived Ease of Use Participation General Attitudes Intention to Use

Mean 3.87 3.46 3.82 3.41 3.81

Factor Analysis, Item Reliability, Convergent Validity and Discriminant Validity Tests
Factor analysis was applied to determine whether there were distinct factor groupings within each construct. It was determined that of the constructs, it was only PU which had two factors, which we describe to be Perceived Usefulness for the Individual (PUI) and Perceived Usefulness for the Organisation (PUO). PUO referred to organisational benefits relating to risk management, strategic formulation and design of organisational key performance indicators. Item (question) reliability was tested using factor analysis with a loading threshold of 0.7 (Hulland, 1999). High loadings indicate that a construct strongly influences the items, whilst low loadings indicate that the construct has a weak influence on the items. Items with loadings of less than 0.70 were treated as unreliable and therefore removed from subsequent analysis. This resulted in 19 of the 62 items (questions) in the reliability test being eliminated (see Appendix B for items/questions and loadings).
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Table 3 Composite Reliability Statistics

Perceived Usefulness for Individual: Composite Reliability Perceived Usefulness for Organisation: Composite Reliability Perceived Ease of Use: Composite Reliability Participation: Composite Reliability General Attitudes: Composite Reliability Intention to Use: Composite Reliability 0.945 0.925 0.915 0.941 0.918 0.927 AVE AVE AVE AVE AVE AVE 0.712 0.638 0.684 0.665 0.691 0.810

Convergent validity tests to determine the extent to which multiple measures of a construct agree with one another (Campbell and Fiske, 1959, as cited by Barki and Hartwick, 1994) were also undertaken using composite reliability tests and Average Variance Extracted (AVE) (Hulland, 1999). Thresholds of 0.7 and 0.5 for composite reliability tests and the AVE, respectively, were applied to measure the convergent validity of the five constructs in the model (see Table 3). Discriminant validity ensures that the measures of each construct are different from the measures of other constructs and that each construct measures different concepts. The square root of AVE should be larger than the correlations of each of the constructs, so that discriminant validity is maintained. In Table 4, figures at the first cell of each column are the square roots of AVE; whilst below diagonal figures are the correlations between the constructs. It illustrates that all AVE values were larger than the correlations, suggesting that there is discriminant validity between items of each construct.

Analysis
The summarised results (Figure 2) were produced by the PLS-Graph 3.0 using the data from the questionnaires. We performed bootstrapping7 as a necessary step to obtain the significance level of the path coefficient (Chin, 2007). The resample size for bootstrapping was 6,000, determined by a principle that the greater the resample size the more stable the t-statistics will be. Because the relationships between the constructs are directional, the t-statistics were treated as a one-tailed test and were compared with the critical values 1.645 (p < 0.05), 2.326 (p < 0.01) and 3.091 (p < 0.001) following similar research (Moulang, 2006).

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Table 4

Square Root of Average Variance Extracted vs. Correlations

Perceived Usefulness for Individual Perceived Ease of Use Participation 0.844 0.819 0.609 0.483 0.699 0.702 0.689 0.519 0.398 0.382 0.769 0.621 0.373 0.827 0.815 0.421 0.414 0.831 0.764 0.900 0.799 Perceived Usefulness for Organisation

General Attitudes

Intention to Use

Perceived Usefulness for Individual

Perceived Usefulness for Organisation

Perceived Ease of Use

Participation

General Attitudes

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Intention to Use

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Figure 2
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Results

Job Level (Director/manager vs Non-director/ manager) 0.268*

Perceived Usefulness for Individual R 2=54.7%

NS 0.318* Perceived Usefulness for Organisation R 2=36.0% 0.444** NS NS NS -0.284* General Attitudes R 2=67.7% 0.268* 0.581*** 0.444** Intention to Use R 2=70.2% 0.52*** NS

NS

Degree of Participation

-0.379** 0.443** 0.558*** NS

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NS

Perceived Ease of Use R 2=17.8%

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Functional speciality (Clinician vs Nonclinician)

Notes: NS: Not Significant. : p < 0.05 level of significance. : p < 0.01 level of significance. : p < 0.001 level of significance.

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Table 5 presents the path coefficient, significance level, and support for each of the hypotheses of our adapted model (Figure 2). Three of the seventeen paths (PEU to PUI, PEU to general attitudes and general attitudes to intention to use) were significant at the 0.1% level, three at the 1% level (functional speciality

Table 5 Model Path Coefficients and Significance

Relationships Functional Speciality PUI Path Coefficients 0.284 Tstatistics 2.295 Support for Hypothesis Hypothesis 3: Non-health staff will have a higher PU and PEU compared to health staff. PARTIAL SUPPORT

Functional Speciality PUO Functional Speciality PEU Job Level PUI

0.379 0.046 0.268

2.8279 0.3324 1.7216

Job Level PUO Job Level PEU Participation PUI

Hypothesis 2: Directors and managers will have a higher PU and PEU compared to non-directors and non-managers. PARTIAL SUPPORT

0.241 0.171 0.154

1.3197 0.9723 1.3688 Hypothesis1a: Participation is positively related to perceived usefulness (PU). NOT SUPPORTED Hypothesis1b: Participation is positively related to perceived ease of use (PEU). SUPPORTED Hypothesis 6: PEU is positively related to PU. SUPPORTED Hypothesis 5: PEU is positively related to general attitudes. SUPPORTED Hypothesis 4: PU is positively related to general attitudes. PARTIAL SUPPORT Hypothesis 7: PU is positively related to intention to use. PARTIAL SUPPORT Hypothesis 8: General attitudes are positively related to intention to use. SUPPORTED

Participation PUO Participation PEU

0.167 0.443

1.2214 2.8767

PEU PUI PEU PUO PEU General Attitudes

0.52 0.268 0.558

3.5337 1.6663 4.1091

PUI General Attitudes PUO General Attitudes PUI Intention to Use PUO Intention to Use General Attitudes Intention to Use Notes: : p < 0.05 level of significance. : p < 0.01 level of significance. : p < 0.001 level of significance.
C

0.318

1.9511

0.048 0.068

0.3721 0.3988 2.8366 3.5875

0.444 0.581

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to PUO, participation to PEU and PUO to intention to use), with another four (functional speciality to PUI, job level to PUI, PEU to PUO and PUI to general attitudes) significant at the 5% level. The analysis demonstrates that the strongest positive relationships are along the path starting from participation to PEU (p < 0.01), PEU to general attitudes (p < 0.001), and finally general attitudes to intention to use (p < 0.001). These results suggest that in NSW Healths Sydney Head Office and HNEH, participation in the process of designing and implementing the BSC is useful in predicting employee perceptions on the BSCs ease of use, which in turn allows prediction of attitudes toward and intention to use the BSC concept. In addition, PEU could significantly predict PUI (p < 0.001), which then anticipates staffs general attitudes (p < 0.05). PUO (p < 0.05) is also significantly related to staffs intention to use (p < 0.01). The expectation that different variables impact upon PU and PEU was also partially supported at the 1% and 5% levels. Job level appears to affect PUI (p < 0.05), which suggests that directors and managers embrace the attitude that the BSC is more useful personally, compared to employees who are neither directors nor managers. Functional speciality appears to be related to both PUI (p < 0.05) and PUO (p < 0.01), with clinicians seemingly of the view that the BSC was not as useful personally or for the organisation, compared with non-clinicians. However, both job level and functional specialty did not appear to have any relationships with PEU, which was predominantly influenced by participation. Interestingly, the results suggest that participation was not related to employee opinion on BSC usefulness. Another interesting finding is that PUI can significantly affect general attitudes (p < 0.05), but not intention to use, whilst PUO has significant influence on intention to use (p < 0.01), but not general attitudes.8 Two-sample t-tests were also conducted to identify which group of respondents had a greater opportunity to participate in the design and implementation of the BSC. The results indicate that job level has a significant relationship (p < 0.01) with participation. This suggests that directors/managers participated more often compared to non-director/manager employees. Another two-sample t-test was used to compare the mean results of Sydney Head Office and HNEH respondents. The results demonstrated that there were significant differences between these two groups with respect to perceived usefulness (p < 0.05) and general attitudes (p < 0.05). Respondents from the Sydney Head Office, perceived the BSC to be more useful and had a more positive attitude to the BSC compared to respondents from the HNEH who are physically located within a hospital campus.9
CONCLUSION, LIMITATIONS AND AREAS FOR FURTHER RESEARCH

This study of staff attitudes toward the adoption of the BSC concept at NSW Health and HNEH sought to answer: (1) how perceived usefulness and perceived ease of use of the BSC are related to attitudes toward, and consequent intention

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to use the BSC; and (2) how job level, functional speciality and degree of participation predict the perceived usefulness and perceived ease of use of the BSC. The findings demonstrated that in the context of BSC adoption in a public health sector setting, participation and perceived ease of use (PEU) are key variables that predicted employee attitudes and ultimately intention to use the BSC. Participation positively influences staff PEU of the BSC. PEU, in turn, is positively correlated with staff perceived usefulness (both at individual and organisational level: PUI and PUO) of the BSC and general attitudes. This finding implies that staff perceived the BSC to be useful if it was easy to use. With increasing pressures from the public and other government agencies for greater service and accountability from NSW Health, one could appreciate that any performance management system that is difficult to use will not be seen as useful. Results also indicate that job level and functional specialty could affect respondents (management and employee) perceptions regarding the strategic usefulness of the BSC. Directors and managers embrace the BSC as more useful, compared with employees who are neither directors nor managers. Clinicians also seem to view the BSC as less useful when compared with non-clinicians, which partly confirms prior findings by Aidemark (2001) and is consistent with Jacobs (2005) assessment of a seemingly antagonistic view of the medical profession toward accounting practices. Further analyses revealed also that managers participated more often than non-managerial staff across different functional specialities in the design and implementation of the BSC concept. This finding follows normative advice from Assiri et al. (2006) who, in their road map to successful BSC implementation, identify as a dominant factor executives and senior managers commitment. They recommend that senior management be actively responsible for and involved in BSC implementation at the ground level. This studys findings, however, suggest that there is a point where senior management needs to allow non-managerial staff to participate if they want to engender positive general staff attitudes toward the BSC. Respondents from NSW Health, who operate within a strategic managerial/office based environment also appear to perceive the BSC to be more useful and had a more positive attitude toward it compared to respondents from HNEH, who are closer to the interface between hospital systems, patient care and community needs, and who are responsible for the primary collation of much of the data. Consequently, the benefits of a BSC need to be clearly articulated to clinicians, who are physically tasked with providing these health services. Instead of being perceived as a purely burdensome managerial tool, the BSC process must be seen as beneficial and relevant to those professionals involved in gathering and achieving BSC indicators, for this process to be effective. The application of a modified TAM in a different context, viz, the health sector and the BSC system, reveal findings that deviate from previous empirical studies examining the application of technology. In particular, PEU was found to be a fundamental predictor of usage intentions in our context instead of PU,

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which was more relevant in applications of technology. The implications are that in complex public organisations like NSW Health and HNEH which are subject to competing stakeholder interests, needs, and expectations; eliciting individual staff acceptance and uptake of any system requires a PEU of systems instead of PU. The findings of this study, however, are subject to at least three limitations. First is the intrinsic limitation of the survey method, which others refer to as defects in the process of designing and conducting the survey. Technically, selfadministered questionnaires can be subject to measurement errors which are the result of social desirability bias (Singleton and Straits, 2005). The second limitation is the small sample size of the study, which limits the generalisability of the results beyond NSW Health. Future research examining results from other area health services, which have, or may consider the adoption and implementation of a BSC at a future date might reveal different results. The third limitation is with the PLS path analysis approach to analysing the survey results. The nature of the PLS approach is rather exploratory and datadriven than confirmatory. It is usually referred to as a soft modelling approach because no normality hypothesis is claimed to be required, there seems to be no needed constraint on the measurement scale of the manifest indicators and the number of observations may be limited with respect to the number of variables (Vinzi, 2007). Thus the small and targeted sample respondents of BSC workshop attendees at the NSW Health combined with the PLS path analysis approach limit the generalisability of results outside of the NSW Health. However, we encourage other management accounting researchers to continue to use the PLS path analysis approach to develop theories (see also Smith and Langfield-Smith, 2004). There are also other areas of research arising out of this exploratory study. In this project, job level was simply categorised into director/manager and non-director/manager. Functional speciality was categorised into clinician and non-clinician. In future research, other employment categories could be explored. More importantly, the attitudes of stakeholders other than employees (including members of the local community and patients) could be solicited in order to provide a balanced assessment of the relevance of the BSC to the health sector from a recipient perspective. Finally, this study only considered the relationship between three factors (participation, job level and functional specialty) and PU, PEU and general attitudes that consequently affected the intention to use the BSC. Future research could test other factors affecting PU and PEU, from alternate models, including organisational culture and structure, the relationship between attitudes and executive commitment and project ownership. Alternatively the proposed theoretical framework could be applied in a longitudinal study. With the health sector facing ever increasing expectations by the public for better performance and service, new systems of performance measurement should enable health agencies to become more efficient and effective. This paper highlighted and explored a key element in successful implementation of the BSC as a PMS, that of staff acceptance.

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APPENDIX A 2007 Hunter New England - NSW Health Performance Framework

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APPENDIX B Item Reliability Loadings

Loadings 0.8672 0.9139 0.7963 0.7285 0.8444 0.9388 0.7985 Description At my organisation, using a BSC would: improve my job performance increase my job productivity make it easier for me to perform my tasks enable my organisation to align organisational and personal goals enable my organisations stakeholders to better assess firm performance Overall the BSC would be useful to me Overall the BSC would be useful to the organisation as a whole

Items

Perceived Usefulness for Individual PU1 PU2 PU3 PU11 PU17 PU19 PU20

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Perceived Usefulness for Organisation PU4 PU5 PU6 PU7 PU8 PU9 PU10 PU12 PU13 PU14 PU15 PU16 PU18 0.7841 0.8514 0.8032 0.6728 0.6129 0.7755 0.7829 0.7320 0.6911 0.7577 0.6588 0.4702 0.5681

At my organisation, using a BSC would: enhance organisational efficiency enhance organisational effectiveness help identify the organisations main performance drivers help identify and manage organisational risks enable my organisation to clarify and gain consensus about strategy enable my organisation to identify and align strategic initiatives enable my organisation to communicate its strategy enable my organisation to perform periodic and systematic strategic reviews enable my organisation to receive feedback on areas for improvement enable my organisation to balance short- and long-term objectives enable my organisation to balance financial and non-financial targets enable my organisation to balance external and internal targets be problematic for me as I am still confused as to what the purpose of the BSC is actually for

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APPENDIX B (Continued)
Description

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Items

Loadings

Perceived Ease of Use PEU1 PEU2 PEU3 PEU4 PEU5 PEU6 PEU7

0.6420 0.6850 0.8201 0.8027 0.6524 0.5708 0.8164

PEU8

0.6817

PEU9

0.4375

PEU10 PEU11

0.7264 0.8618

At my organisation, I would find that the BSC: would be easy to learn would not take up too much of my time would be clear and understandable would be flexible in terms of interaction would allow me to become skilful in using it would make it easier to co-ordinate with other departments would make it easier to align departmental goals with organisational goals compared to other performance measurement systems would make it easier to understand how well we are aligning our objectives with performance indicators would be easy to understand as plenty of guidance has been provided about what the BSC is all about would be easy to use because we already collect data and report on the area Overall, I would find the BSC easy to use

ADOPTION OF THE CONCEPT OF A BALANCED SCORECARD

Degree of Participation PAR1

0.8751

PAR2 PAR3 PAR4 PAR5 PAR6 PAR7 PAR8 PAR9

0.8227 0.8043 0.6803 0.7304 0.8588 0.7818 0.7885 0.8384

At my organisation: my opinions and/or suggestions are sought when setting BSC Key Performance Indicators (KPIs) I will be involved in designing and setting some BSC KPIs I have a significant degree of influence in setting BSC KPIs I will be able to decide what BSC KPIs are used I will be involved in communicating the BSC to other employees I will be involved in conducting reviews of the BSC I will be involved in meetings on the BSC I will be involved in developing an implementation plan for the BSC Overall, I have a significant amount of participation and involvement in the BSC project

355

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APPENDIX B (Continued)
Description

Items

Loadings

General Attitudes ATT1 ATT2

0.8334 0.6924

ATT3 ATT4

0.8054 0.5709

ATT5 ATT6 ATT7

0.4839 0.1013 0.4982

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ATT8 ATT9 ATT10

0.7140 0.8100 0.8560

In my organisation: I like the idea of using a BSC the reasons provided for using each of the BSC measurements are sound and/or logical using the BSC would be a pleasant experience even if a BSC saves time, I would prefer another previous or new performance management system I feel I need more support in managing performance against targets if more training courses for BSC are available, I am interested in taking them using the BSC leads to upper management wanting more and more reports, some of which may be unnecessary the BSC will make work more interesting the BSC should have been implemented a long time ago Overall, I have a positive attitude about the BSC

Intention to Use INTEN1 INTEN2

0.8800 0.9155

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INTEN3 INTEN4

0.8419 0.6995

In my organisation: I intend to support the adoption of the BSC if I were asked to express my opinion regarding the adoption of the BSC, I intend to say something favourable if I could make the decision to adopt the BSC, I intend to I intend to use BSC for other areas of my daily employment responsibilities

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1 According to the authors cited, there are three levels of a successful system implementation including but not limited to the technical level, where the focus is on the accuracy and efficiency of a system. 2 A recent study that provides empirical evidence on the BSCs effect on performance is De Geuser et al. (2009). 3 Exchange rate is US$1:A$.9252 as at 23 October, 2009. 4 The survey instrument is available on request from the corresponding author. 5 The authors thank one of the anonymous referees for this comment. 6 A two-sample T-test was used to compare the means of survey responses of early and late respondent groups. The results indicated that there were no statistically significant differences in all the constructs at the 5% level of significance. 7 A method for estimating population parameters by repeatedly resampling the same sample, computing test statistics on each aspect of the sample and then examining the distribution of the test statistic across the entire sample. 8 As there is no proper overall goodness-of-fit measures in the PLS approach, Hulland (1999) suggests that the r-squared (R2 ) for all dependent constructs should be reported. Unfortunately, as far as we know, there is no similar research in the BSC area to this project, so it is difficult to compare the current studys R2 s with previous research. Hulland (1999), however, stated that the spread of R2 s in previous studies that used PLS had ranged from 12% to 64%. So, in general, the R2 s for General Attitudes (67.7%) and Intention to Use (70.2%) are more than satisfactory and the R2 s for PUI (54.7%), PUO (36%) and PEU (17.8%) are at a reasonable level. 9 Tests of multicollinearity among Functional Speciality, Job Level and Participation (not shown) indicated that there are no multicollinearity problems with tolerances above 0.20 and the variation inflation factor (VIF) less than 5.

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