The dynamic use of a balanced scorecard in an Italian public hospital

Abstract Purpose This paper aims to analyse the dynamic use of the balanced scorecard (BSC) in an Italian public hospital. Design/Methodology/Approach A longitudinal case study was conducted at an Italian public teaching hospital over a period of 5 years. The emergence of dynamic use of BSC was traced over a different combination of social, political, economic and organizational realities. A deeper understanding of these realities requires the adoption of a holistic approach to BSC use. Henri's types of system use (i.e., monitoring, attention focussing, strategic decision‐making and legitimizing) frame this approach in a more concrete manner. Findings This study adds to the debate on whether BSC is used for aspects other than monitoring in public contexts. The case study offers the first example of a legitimizing use of the system and a first longitudinal case study that traces a dynamic use of BSC: the use evolves from monitoring and attention focussing to monitoring and legitimization. Norms, political parties and top managers play a determining role in this process. Originality/Value Through a longitudinal approach, this study presents how BSC can be a dynamic tool steered by legitimacy pressures. The longitudinal study explores how social, political, economic and organizational context shape the implementation and the revision of BSC affecting the use of the tool by top managers. The browse of this dynamism is supported by Henri's type of use along with an in‐depth analysis of the BSC literature evolution in terms of its ‘static, dynamic and expected’ use.


| INTRODUCTION
Although the meaning of the balanced scorecard (BSC) in healthcare organizations is ambiguous because of the type of control structure, 1 there is a growing diffusion of BSC in the public health sector, [1][2][3][4][5] in particular for monitoring hospital performance. 6 Despite this increasing interest, the extant literature lacks a holistic approach to understanding the use of BSC.
Most studies about BSC in healthcare contexts appear to be anchored to the design and implementation phases of a system's development, leaving little space for a description of the system at work. Cases 1,2,6-9 are numerous and cover different healthcare organizations and countries.
In all these cases, the authors describe a situation of use that does not change during the period of observation.
Henri 10 (97) describes as static those studies that 'do not incorporate the evolution of a performance measurement system […] over time'. These studies deal predominantly with the expected use of BSC because their investigations cease before the system works properly. When the analysis focuses on the initial phases of a performance management system's (PMS) development, authors can comment only on what may be expected. 11 This is the case of numerous researches. 2,12,13 These findings reopen the debate on how BSC serves top managers in public 14 and health domains. 1,3,4 In terms of providing a dynamic image of the development and use  • How managers use BSC in hospitals changes over time.
• At an organizational level, a BSC could provide justification of actions and decisions as well as monitoring results, supporting strategic decision-making processes and focussing attention on priorities.
• BSC is a pivotal lever that can be governed by hospital managers as a strategic management tool for facing legitimacy pressures. and behaviours of workers at a ward level. These studies present the design, implementation and use of BSC through the years but they do not reveal the change in the system itself or in the use of the system by top managers. An in-depth literature review reveals scant literature on the BSC dynamism in terms of its attributes and uses.
Considering this gap, this study aims to deepen the concept of the use of BSC in public health considering how social, political, economic and organizational context shape the implementation and the revision of BSC affecting the use of the tool by top managers. In doing so, the study introduces the distinction between 'static, dynamic and expected' uses of BSC. In addition, the paper examines the use of BSC employing 'Henri's 10 types' regarding the nature of performance measurement systems' use. This framework goes beyond the debate on BSC as a performance management or performance measurement system. In fact, Henri 10 addresses, among other uses, both reporting and decision-making uses. Thus, the distinction between performance measurement and PMSs in this paper loses relevance.
For exploring the dynamism of BSC over time affecting the use of the tool by top managers, the case of an Italian public hospital has been considered. This case study has been explored considering a longitudinal approach in the data collection. This approach permitted an in-depth analysis of the BSC evolution in features and uses over time considering the multiple stakeholders involved in its design and implementation.
The contribution of the paper is threefold. First, the study contributes to the scant literature that considers the BSC as a dynamic tool of performance management for improving legitimacy on the organization. Second, a theoretical contribution is presented, considering a dynamism in the model proposed by Henri. 10 Third, the paper proposes a novel point of view that managers using BSC in a PMS should consider suggesting that, instead of a static tool, BSC can be shaped over time in accordance with legitimacy pressures.
In the next section, we develop a broad approach to PMSs based on an in-depth literature review. Following this, we describe the research methodology and then analyse the dynamic use of BSC in our case hospital and the context in which it is embedded. The final sections discuss our interpretation of the case according to the theoretical framework and present our conclusions.

| THE CONCEPTUAL FRAMEWORK REGARDING THE USE OF BALANCED SCORECARD IN HEALTH CARE CONTEXTS
A scan of the extant literature on BSC in health care reveals the resilience of the system 16 in terms of the adaptation to new roles, contexts and actors. However, studies largely ignore the interdependency between the design, the implementation, and the use of BSC and the interdependency between different systems operating at the same time in the same organization. 17,18 Therefore, we argue that research on BSC would benefit from a holistic view of the key aspects that intervene at different moments during the process. This understanding promotes a continuous analysis on how to introduce and reshape BSC according to the different uses that top managers make of the system. Thus, the adoption of a holistic view reveals the dynamic use of BSC and the political, social and economic relationships that could contribute to this dynamism. In this sense, BSC can also become a valuable strategic management tool and support managers in their decisions. 19,20 This approach shares the same rationale as Ferreira and Otley's 17 study, encouraging a broader view of PMS that captures the richness of issues and relationships implicated in PMS design and use. In the public sector, the politicized nature of decision-making 3,21 is acknowledged, as is the fact that systems and activities rely on building consensus between top managers and politically elected bodies. The process of consensus building should take into account the long-term view promoted by top managers and the short-term emphasis traditionally dominating political regulation. Consequences on systems design and use are evident. First, in the case of coupling, the government regulation becomes intricately intertwined with organizational strategy, narrowing the strategic priorities and limiting the support that a PMS could give to top managers. 21 Second, in terms of de-coupling, 15,19,22 organizations could compile more information than is required for decision-making and could suffer from an excessive proliferation of performance indicators. 3 In these dynamics, the top managers' style of leadership affects the subsequent coupling or de-coupling behaviours. 21 In these fluid contexts, the political, social and economic relationships are of extreme importance. Some authors emphasize how these relationships affect the nature of PMS use. 10, 23 Henri, 10 in particular, draws on various classifications of management and accounting information systems to define and operationalize the use of performance measurement systems by top managers. The analysis of these classifications reveals four types of use: monitoring, attention focussing, strategic decision-making and legitimization.
According to Henri, 10 top managers use performance measurement systems for monitoring when they should provide feedback and communicate with multiple stakeholders. Performance measures 24,25 populate reporting documents and top managers promote diagnostic control 26 through the system. In addition, when top managers send priority messages throughout the organization, the system could be used more interactively, 26 focussing attention on specific objectives and measures (attention focussing use). Further, performance measurement systems could be central to decision-making processes, facilitating the choice of objectives and actions (strategic decision-making use) or justifying decisions or actions (legitimate use). When performance measurement systems serve a strategic decision-making use, the system is a collector of learning initiatives helping problem-solving activities. Finally, performance measurement systems could form the basis for justifying past actions or decisions by seeking validation of current and future actions.
Our conceptual framework, thus, benefits from the adoption of a holistic approach and of the performance measurement systems uses defined by Henri. 10 A broad view clarifies the trajectories of the different BSC uses made contextually and/or subsequently by the top managers. With trajectories we mean the interdependencies among the different systems operating in the organization and the political, social and economic relationships around it.
The fact that Henri's 10 categorization comes from conceptual and empirical scouting of the systems in use in different contexts (i.e., private and public) is a plus in our discourse. It broadens the focus on uses beyond monitoring, which is the use most addressed by public management studies. 1,3,14 We group the extant literature on BSC in health care according to Henri's 10 four categories of use. As depicted in Table 1, the majority of previous studies describe BSC use and expected use in terms of monitoring. This result is similar to Northcott and Ma'amora Taulapapa's 14 and Aidemark's 1 concluding remarks. Further, BSC is used for attention focussing and strategic decision-making. This is new evidence in these contexts. In support of the legitimization of objectives, no studies mention this potentiality of BSC use.

| Research design/background
We present a longitudinal interpretive case study, carried out during 2010-2017 in an Italian teaching hospital, the Integrated University Hospital (IUH). IUH is a public organization that, together with the hospital and the directly linked structures, hospitalizes 60,000 people every year and provides jobs for 5000 people. In 2010, IUH adopted BSC to manage the merger of two organizations, the University Hospital and the Independent Hospital. Since 2010, IUH has undergone significant internal renovations and reorganization. A new surgical block was inaugurated in 2010, a health facility covering an area of more than 70,000 m 2 that contains over 500 beds and 31 operating theatres. In 2017, the new Women's and Children's Hospital was inaugurated, hosting the units of paediatrics, obstetricsgynaecology and their relative emergency rooms and intensive cares, paediatric surgery, paediatric oncohematology, and child neuropsychiatry.
IUH is located in Veneto, the third region in Italy for the GDP contribution, situated in the Northeast of the country. During these years, the Veneto Region faced the emergence of a new challenge induced mainly by the growth in life expectancy, the progressive ageing of the population and the increase in chronic degenerative diseases.
Guaranteeing the appropriate care for all patients, this situation required a new and economically sustainable organizational model of social and health services. The new model is based on the hub and spoke network where public hospitals receive patients who required services at high intensity of care and the territorial health units manage the chronic patients who required services at low and medium intensity of care. As the central government grants greater independence to the regions in terms of health policy, Veneto uses a centralized/integrated model in which 80% of hospital beds are managed directly by the region through regional agencies. This is the highest percentage at the country level. Thus, the region shows a prevalence of public organizations that promote an integrated system of public and private healthcare services. Moreover, the President of the Veneto region, who has been in office since   Further, in 2013 AGENAS, a national agency for regional healthcare services, introduced a national healthcare plan of results as mandated by the Ministry of Health. The aim of this tool was to monitor all the variables that affect the quality, efficiency and equity of healthcare activities. In 2015, a regional decree called for strict control on targets that were decided nationally. All organizations that reach the targets are subject to regional inspection. This trend continued in the yearly financial decrees of 2016 and 2017.

Streams and studies/Henri's 10 uses of system Monitoring
In this context, IUH was selected for deeper analysis for the present study because it has experimented with multiple changes over a relatively short time and has adapted to changes in the government's agenda. 41 Moreover, researchers have a well-established relationship with management accountants, top managers and some clinicians who work in IUH. Thus, both these aspects offer a promising opportunity to examine the organizational, managerial and strategic complexities associated with the adoption and use of BSC.

| Data collection
Case study approaches allow researchers to perceive the complexity of a single and unique case in its own context. 42 The IUH longitudinal case permits the exploration of a BSC complexity and its evolution over time. A longitudinal case study provides an in-depth view of the developmental phases of a particular phenomenon that resulted from several forces rooted in the research context. 43 Data collection were carried out from 2013 to 2017 considering as main methods in-depth interviews of key stakeholders involved in the BSC design and implementation (e.g., planning and control staff members, the division responsible, physicians). Nineteen interviews, a number of informal meetings and internal documents collections (e.g., planning and control dashboards, performance plans, BSC periodical reports), permitted the triangulation of sources and the achievement of the saturation level. 44 Interviews followed a flexible framework that permitted to maintain the flow in the discussion and guided the discourse over three main issues: (i) general use of the BSC in IUH and its evolution over time; (ii) specific impacts of the BSC evolution on the interviewees daily work; (iii) main forces guiding the BSC changes. Questions slightly change according to the interviewees' role in the organization and the seniority ( Table 2).
Interviews were transcribed and read many times reiteratively before being annotated extensively and the emerging codes or themes noted. The codes or themes coming from the respondents enrich the previous identification of codes derived from extant literature in accordance with the research objective. Thus, the data were filed according to the categories and codes selected.

| Description of findings: The IUH case
To illustrate the dynamic use of BSC in IUH, we present our findings in two phases: the emergence of BSC (in 2010) and the revised BSC (in 2017). Our findings show that the developmental process and the different uses of BSC depend on political, economic, social, and organizational realities. Table 3 provides a screenshot of the realities in action.
BSC significantly impacts financial performance. In 2015, IUH revenues exceed the amount of total costs. It was the first time in 18 years. Although the surgical procedures increase every year, the positive performance continues ( Figure 1).

| The emergence of BSC in 2010
In 2010, after 2 years of their assignment, the General Manager and the Medical Director decide to introduce BSC as a reference system for the entire organization. Both managers, who had previous successful experience in BSC implementation, were struggling with the merger between the University Hospital and the Independent Hospital, the creation of integrated departments, and the finalization of the new surgical block.
In that period, the General Manager and the Medical Director were managing complex projects. They worked hard for the merger and the establishment of departments. In the meantime, they were building the surgical block. They had demanding objectives and responsibilities (I1).
The Medical Director leads the design and the implementation of BSC with the aim of executing the new mission of IUH. For him, all the organizational members should be familiar with the teaching hospital objectives and their daily activities should be executed according to these general directions.
The effort to implement BSC should be conceived in terms of a daily alignment of all the organizational members to hospital objectives (I7).
During the design process, the General Manager, the management accountants, the Pharmacy Manager and the Quality Manager map all the current objectives and information flows. They work together listing the priorities of the new organization (i.e., BSC perspectives) and connecting extant objectives and information to these priorities.
Next, they simplify some objectives and targets for increasing the feasibility at the majority of internal areas and  The BSC was our bearings. We knew our priorities, our due activities, and our targets (I16).
As shown by internal documents provided by the Evaluation Committee, BSC presents 16 measures in four perspectives, namely activity, resources, professional quality and perceived quality. The first dimension, activity, measures the three main activities of IUH: health assistance (main objective of an independent hospital), research, and teaching (main functions of a teaching hospital). The Medical Director meditates the choice to insert the university and the hospital activities into the same perspective. The rationale is to communicate a united picture of the IUH activities. The second perspective, resources, reflects the financial aspects, taking into account costs, revenues, BASSANI et Al.

F I G U R E 1 Integrated University Hospital performances
and efficiency. The third dimension, professional quality, captures the capacity of IUH to manage and perform health processes; this dimension involves process reengineering, medical results evaluation and projects.
The majority of clinicians and all the integrated departments' managers ask persistently to create this perspective. We satisfied them (I7).
The fourth perspective, perceived quality, monitors the satisfaction of both internal and external customers (BSC During the first years, BSC supports a path of convergence between the increasing activities of patient assistance, research and teaching and the will to reach the KPIs target. Usually, during the monitoring meetings, we discuss how the professional quality [a measure of the learning process] affects the total costs (I15).
In addition, this BSC provides for a continuous dialog between the top managers and the main actors (e.g., physicians and unit managers), prompting participative leadership that positively influences the use of the system.
Indeed, one of the most effective advances of BSC is the negotiation of the budget, which leads to more awareness without the need to work through excessive red tape during this process phase. Top managers feel as though they are effectively managing the new integrated organization. They established the integrated departments, inaugurated the new surgical block, and obtained the building validation and quality certification. The IUH financial statements show a constant cost reduction and decrease in the rate of hospitalization.
In terms of perceived patient quality, BSC monitors the waiting times and also the number of problems patients have during hospitalization. The IUH internal staff consider these two targets according to the specific situation they were living. They would guarantee the full operation of the surgical block in the short run and they take into consideration the problems patients describe in a yearly survey.

| The revised BSC in 2017
The management revise BSC every 2 years. Since 2015, the number of perspectives has increased, from four to seven. Table 4

T A B L E 4 The development of BSC perspectives
The only possibility we have is the definition of organizational mechanisms such as worktables. The region dictates the strategies and objectives. We must to be ready for answers (I19). Though top managers seem focussed on regional requirements, the majority of staff managers and unit managers would be familiar with the overview of the hospital and its strategic directions (I8, I9, I13, I16). They would be more reactive management focussed on IUH needs instead of on compelling regional requirements. Moreover, they would create less interference during the choice of strategic investments and directions.
BASSANI et Al.

F I G U R E 2 A choice of the balanced scorecard KPIs for the period 2017-2018
Last year, the region entrusted the total management of radiopharmaceuticals to a private hospital.
We are all astonished! Some months before the region prevented us from buying a linear accelerator.
It was detrimental for a competitive offer of services (I8).
As the region constantly asks for a prompt reply to false emergencies, the Management Accountant admits that it is difficult for top managers change their behaviour (I8).
It is acknowledged that in 2017, there is an excessive request for information by the region.
Controllers are more than workers are. I do not know if the region is able to manage all these data.
They require rich details, lowering the significance of the information (I16), and they ask for redundant information flows (I12).
Moreover, the central government and other public administrations require additional details.
Usually, data required are the same asked by the region but differently aggregated (I16).
It seems a policy supervision (I12).
If you reach the target, you will be inside the system and vice versa (I12).
Since 2015, the Veneto region has suggested the use of ad hoc software for internal monitoring. They request the implementation of a standardized report for users. In 2016, the software was changed, and the region asked for a new implementation. All these systems seem reduce the possibility of directly managing the hospital.
There are no warnings that signal an inefficient situation of something similar. The region is interested in implementing standardized reports that are not at its disposal, but of which it knows all the information (I8).
In the near future, the region will probably implement a centralized management accounting and control system based on Azienda Zero (I8).
The regional supervisors give quarterly feedback and there are frequent inspections at the hospital.
When they announce their visit, the top managers prepare themselves one week in advance. It is an inspection, not a friendly visit and they want defence against accusations. The budget and the related information flows serve this purpose (I16).
In 2017, BSC guided the entire structure towards achieving regional objectives. It can be assumed that the BSC has been employed for managing and monitoring short-term performance adapting the BSC objectives to KPIs requested at a regional level. Thus, BSC lacks attention on some organizational objectives such as teaching, research, and the quality of patient cares [client perspective] and loses the function of increasing internal collaboration and communication. In this way, the BSC loses its strategic function 45 since it is driven by regional targets instead of IUH goals.
Finally, the Medical Director introduces weekly worktables during which the department managers, physicians and staff managers check the results of each indicator, comparing the result with the target imposed by the region (I16). In the beginning, the physicians think worktables are a means to share needs and problems with the top managers. However, after some meetings they understand that the only intention was to monitor their results and actions.
On the contrary, worktables appear as an unnecessary expansion of the power of control. Thus, physicians perceived worktables as a lack of trust (I9).

| DISCUSSION OF FINDINGS
The finding highlights that the BSC use evolves from an emphasis on the system that helps top manager to set and communicate their priorities to a system used as a monitoring system and support legitimizing purposes. In this section, we discuss how the top managers use BSC within the public hospital. Henri's 10 types of use are employed for enhancing our understanding of this matter in terms of BSC dynamism.
The 2017 BSC is a completely different system from that of 2013. According to other studies, 7,8,23,28,39 the introduction of BSC is a voluntary practice promoted by the hospital's top managers. At the outset, BSC appears to be a proactive response to external forces including financial pressure, regulatory reporting 13 and internal challenging objectives that top managers were managing. Though the system is no longer recognizable, it was still used in 2017.
In that year, the top managers revised all the perspectives and measures according to the annual budget and the cycle of performance management.

| Attention focussing use of BSC
The increase in perspectives and measures automatically decreases the attention-focussing role of BSC over time.
In terms of attention focussing, Henri 10 refers to the interactive use of the system 26 that helps top managers and users to focus on organizational priorities. Previous studies in which BSC is externally mandated explain the attention focussing with an emphasis on the strategic alignment between national and organizational objectives and measures. 16,27 In these situations, the top-down approach followed in the translation process could disorient the internal managers and executives. As suggested by our findings, this is not usually the case when the introduction of BSC is a voluntary initiative. Being voluntary, the system helped top managers to set and communicate their priorities, 12,13,29,39 keeping managers focussed on critical areas. 29

| Monitoring use of BSC
In terms of monitoring, the two IUH top management teams clearly expressed the desire to obtain feedback, which was collected in reporting documents. This essential feedback satisfies the routine requests from the region and the other stakeholders (e.g., state and internal physicians). Further, the data are a useful means of communicating inside and outside the organization. Physicians, internal political parties and staff managers adapt their own language with the standard set of perspectives and measures adopted. The use of BSC for monitoring is well acknowledged across the literature. 1,3,14 Henri 10 identifies the monitoring type of use when top managers provide feedback and communicate with stakeholders. Previous works on BSC in health care 1,[7][8][9]12,15,27,28,31,34,35 deliver similar conclusions.
When BSC is used as a monitoring system it promotes a new and shared language inside the organization and in the health care network. 1 As our findings highlight, the top managers' accountability behaviour increases. 9,35 The activity of monitoring hospital results, 8,9,34 strategic units' performance, 12 ward activities and behaviours, 15 and patient satisfaction 28 still remains an important function of BSC. In BSC potentials, this should be the opportunity to install an external viable communication with the administration of the hospital and the government. 1 Moreover, the monitoring activity could find an interesting expected use in terms of benchmarking results across hospitals. 27,31 All the hospitals and their health care providers could be monitored, and the comparison suggests specific areas of concern. 34

| Strategic decision-making use of BSC
The IUH analysis does not suggest a decision-making use of BSC. 10 In 2013, perspectives and measures of BSC monitor all the strategic objectives and the process of introduction facilitates the attention focussing on core activities and priorities. In 2017, the strategic decision-making process seemed manipulated by external forces. This fact was evident when the region adopted two measures. First, it decided a different allocation of radiopharmaceuticals management, and second, it prevented IUH from buying a linear accelerator. Frequent inspections, mandated information systems implementation, and data requirements support this interpretation.
In general, extant studies reveal minor strategic decision-making use of BSC. 14,19,20 Peters et al. 34 report an improvement of decision-making processes among all the actors that participate in the design process. Inamdar and izations. They compile more information than is required for decision-making. 3,40 BSC objectives seem to have a strictly short-term emphasis and it appears to be a mandated system as well one that deals with the annual budget, regional information flows, interregional performance benchmarking and so on. According to this view, the current top managers attribute to BSC the main role of legitimacy provider.

| Use of BSC for legitimation
Using BSC for legitimation means providing justification for actions or decisions made in the past. 10  of BSC design-implementation and use stimulates the emergence of political, social and economic realities. These forces affect the use of the system and the strategy dialogue in the medium to long term and reveal the potential of BSC as a strategic management tool. 19,20

| CONCLUDING REMARKS
In the lack of studies that consider the dynamism of BSC, the contribution of this paper is threefold. First, the study demonstrates that the use of BSC changes over time. Recently, Bobe et al. 16  shows that BSC through its implementation and evolution can be a valuable tool for pursuing organizational legitimacy. Second, the paper proposes a theoretical contribution, adopting the Henri's 10 types of PMS use discloses an interesting practice. BSC could provide justification of actions and decisions (i.e., legitimization use of BSC) as well as monitoring results, supporting strategic decision-making processes, and focussing attention on priorities. Third, the paper proposes a novel point on BSC as a pivotal lever in a PMS that can be governed by the managers as a strategic management tool for facing legitimacy pressures.
Being explorative in its nature, the study has some limitations. First, we refer our empirical investigation and conclusions to the Henri's 10 model that encompasses four uses of PMSs. Other plausible uses might have been investigated and they might have provided interesting results. Second, we interviewed the key stakeholders directly involved in the BSC design and implementation over the years. Excepting the evaluation committee member, they are all organizational actors. External political and administrative stakeholders might have given other interpretations regarding the use of BSC. Third, considering differences in the design and use of BSC among private and public organizations depending on their size and institutional context, results may not be generalized outside the scope of one current sample (i.e., 500-bed hospital in Italy).
Future studies will consider the BSC dynamic use comparing different countries and organizations both from the public and private sector and supporting the BSC evolution through the employment of the institutional and legitimacy theories. In addition, further efforts should be considered in exploring the opinion of a wider range of stakeholders involved in the BSC design but also influenced by the BSC application.

ACKNOWLEDGEMENTS
Open Access Funding provided by Universita degli Studi di Bergamo within the CRUI-CARE Agreement.

ETHICS STATEMENT
Not applicable.

DATA AVAILABILITY STATEMENT
Data available on request due to privacy/ethical restrictions. The data that support the findings of this study are available on request from the corresponding author. The data are not publicly available due to privacy or ethical restrictions.