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Moral Purpose and Budgets: A Cognitive Institutional Case Study of the Budget Ritual in a Not-For-Profit Hospital.
Maureen P Gowing,
University of Windsor
ABSTRACT. Cognitive institutional theorists view management as an intellectual activity to achieve moral and instrumental purposes. Instrumental refers to maximizing profit through revenue maximization and cost minimization; moral refers to maximizing the common good. In not-for-profit organizations, moral purpose becomes particularly salient and familiar processes such as producing an operating budget respond to both moral and instrumental exigencies. In this case, the government and sole source of revenue, required hospitals to reduce their operating budgets by 20% over 2 years. Members of the medical and management professions who comprised the top management team at the hospital, used the new process to construct and communicate a common belief system wherein achieving the moral superceded achieving the instrumental goal. Institutional analysis of how the ascendancy of moral over instrumental purpose emerged in a novel operating budget process is the central contribution of this article.
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