New Zealand local government performance measurement: the impact of environmental demands

Abstract

This paper examines the internal and external environmental factors that influence the development of New Zealand local authorities' performance measurement frameworks and how they respond strategically to these factors. A theoretical framework based on institutional theory is developed and a two-case study approach adopted.

The results suggest that local government performance-measurement frameworks are influenced by institutional and technical demands from a variety of potentially conflicting environmental sources. These demands generally meet very little resistance from the local authorities with them conforming (acquiescing) to, or balancing (compromising) with the demands. In addition, institutional demands exist intra-organisationally with local authorities using an avoidance or decoupling strategy to distinguish the performance measures used in formal reporting and those designed for internal operations.