Developing and testing a performance measurement framework for the Australasian nonprofit healthcare sector : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Engineering at Massey University, Manawatu, New Zealand

Abstract

Irrespective of the sector to which an organisation belongs, measuring and monitoring the strategic performance is of paramount importance for survival and growth of the organisation. While the balanced scorecard (BSC) remains the most widely recognised performance measurement (PM) model by the academia and the practitioners, the theoretical validity and generalisability of it for the nonprofit sector remains to be tested via samples. In addition, the technical requirement of strategy maps acts as a deterrent to the uptake of the BSC in the nonprofit sector. In this research, the researcher theorised and empirically validated the nonprofit version of the BSC (nonprofit BSC) using data collected from Australasian healthcare NPOs, using an exploratory sequential mixed methods research platform. First, a conceptual model was developed based on the literature on the BSC and relevant other PM models. Next, the conceptual model was advanced into a causal predictive model (referred to as the main theoretical model in this thesis) using qualitative data collected from senior managers belonging to nine Australasian healthcare NPOs. In keeping the nonprofit BSC, the researcher’s main theoretical model posits that the Mission of the NPO drives its Strategy, which together drives its Financial Health, People, and the Infrastructure to enable the Processes to deliver mission-related outcomes; the mission-related outcomes being represented by Client Satisfaction, People Satisfaction, and Donor Satisfaction. Finally, quantitative data collected from Australian and New Zealand healthcare NPOs, in the form of survey responses (n = 223), were used to test the researcher’s theoretical models, using the partial least squares based structural equation modelling approach. The theoretical and practical contributions of the study are: (a) development of a theoretical model that underpins the nonprofit BSC; (b) operationalisation of the constructs of the model, which in effect, operationalises the nonprofit BSC; and (c) empirical development of an overall organisational performance index linked to an associated scoring system. The theoretical and practical implications of the study (Chapters Six and Eight) include how the main theoretical model can be used to predict and explain successful performance improvement interventions and unsuccessful performance improvement interventions, how an organisation could develop its own performance measures without having to use a strategy map, and general guidelines for performance improvement including how the scoring system can be used for self-assessment. The limitations and future research directions have been outlined in the conclusions chapter.