A study of performance management and management control systems in non-profit organisations engaged in the provision of public health and welfare services – A stakeholder salience perspective

Non-Profit Organisations (NPOs), characterised by a complex stakeholder profile, are increasingly important to the provision of public services, in particular health and welfare services. This study examines how management’s perceptions of stakeholder salience informs the design and use of Management Control Systems (MCS) employed in the management of NPO performance. NPO performance as a construct of the objectives of multiple stakeholders underpinned the focus on management’s perception of stakeholders as a basis of exploration. The study was conducted as a single sectoral case study, the Irish disability sector, through the examination of four exemplar NPOs. Stakeholder salience theory provided the framework of analysis, with four relevant stakeholders identified as the subject stakeholders for the study: Service Users, the Funder, The Regulator, and the Board. Contributions to MCS research, stakeholder salience theory and qualitative research methods are made. First, while service users are identified by management as centrally important to organisational mission, they emerge as having relatively lower salience compared to other stakeholders, largely due to the absence of ‘power’. These salience perceptions point to lower levels of management attention being afforded to service users, notwithstanding their centrality to organisational mission, providing evidence of a disparity between mission and management operational attention and a risk of mission drift. Reinforcing service user salience through improved MCS ‘accountability’ and MCS embedded ‘internal advocacy’ emerge as potential interventions in MCS design and use to redress the identified disparity and to enhance the management of performance. The study also contributes to the development of stakeholder salience theory, suggesting that complexity in stakeholder salience gives rise to a co-existence, or duality, in stakeholder typologies, and pointing to ‘risk’ as a potentially significant factor in perceptions of salience. Drawing on these findings and observations in relation to the relative perceptions of salience attributes, a synthesised model of stakeholder salience formation as a process is presented. Finally synergies between stakeholder salience theory and stakeholder agency theory are suggested, as well as contributions to qualitative research methodology and an agenda for future research.2022-05-1