We examine the relationship between strategic change and management control in Canadian and Swedish health care organizations. Prior research leads us to believe that strategic changes i.e. Lean Healthcare or different Costing Methods, create significant frictions between financial and operational management. This study examines a set of strategic changes to learn how these issues impact the organization and employees involved. The Canadian (Ontario) and Swedish context allows us to examine the variety of responses to the interaction of Lean Healthcare as a strategy and traditional MASs.

Our results reveal differences between the Swedish and Ontario hospitals that call into question assumptions underlaying our concept of MCS.  We show that Ontario hospitals MCSs and operations are loosely coupled, while in contrast, Swedish hospitals have MCSs that are firmly connected to daily operations. We speculate that the difference in the employment status of physicians is an important factor in the results. Ontario physicians are independent contractors paid by the province (a single payer system), but who make treatment decisions that must be implemented by the hospital. Swedish physicians, on the other hand, are employees of the hospital. Thus, Ontario hospitals have significant portions of their operating decisions made by people who are not employees, and who have financial incentives to make decisions contrary to both the financial needs of the hospital and the health of the patient.

This result extends prior research by revealing how different elements of control impact the organization and we contribute to explaining contradictory results in the literature.