Fabricating Budgets: A Study of the Production of Management Budgeting in the National Health Service

TLDR

Accounting systems in health care are not fixed technologies but evolving constructions, challenging the view that they are pre‑designed and highlighting their relevance to global budgeting debates. The study investigates how responsibility accounting and budgeting systems emerge and embed economic logic in UK hospital management, using a Latourian science‑and‑technology framework. Using this framework, the authors examine how UK hospital budgeting initiatives are initiated with loose characteristics and how these systems evolve through accounting‑in‑action processes. The study finds that management budgeting is fabricated and fragile, and its design and implementation generate new decision‑making possibilities and evolving definitions of responsibility.

Abstract

This paper examines the processes by which a form of responsibility accounting system emerges in an organizational context. The paper utilizes recent approaches to the understanding of how science and technology is created (Latour, Science in Action, Harvard University Press, 1987) to investigate the processes by which a management budgeting initiative in the U.K. hospital system takes hold (or not) in specific hospitals. The approach is critical of the notion that accounting systems are well-defined technologies which are designed and then implemented (or face resistance). Instead, the study shows that management budgeting is fabricated, put together in a changing and fragile manner. Emerging accounting systems are not fixed technologies with well-defined purposes which reflect patterns of responsibility but changing constructions. Management budgeting systems are initiated with loose characteristics, purposes and uses. In the process of their design and implementation, new possibilities for decision making and definitions of responsibility emerge. Through this study of accounting in action, the paper explores the processes by which accounting and budgeting systems bring economic logic into hospital management. It is also relevant to debates about the role of budgeting and accounting in health care organizations in many countries.