Core and periphery dynamics of budget evaluation during crisis: the evolution of an impromptu solution

The accounting literature has highlighted the role of budgeting practices in steering organisations through periods of crisis. This paper adds to this literature by drawing attention to the core and periphery dimensions of crisis-related budgetary performance evaluation. Our analysis focuses on a public hospital (periphery) operating under the guidance of a national board of management (core) during an economic and fiscal crisis, which triggered a sudden and substantial reduction in hospital funding and a significant increase in the demand for services. Exploring the role of budgetary practices in this multi-tiered setting, we identify a crisis response where budgetary evaluation was prioritised at both core and periphery levels. Examining the core and periphery separately, we observe an intensified evaluative approach at the core which triggers at the periphery an approach which placed boundaries around organisational activities via the centralisation of expenditure decisions. This response—which we identify as being an impromptu solution—may have been considered sub-optimal at the time but in fact enabled budget compliance and increased service provision. Our analysis highlights the importance of budgetary practices for facilitating value alignment among key stakeholders in times of crisis. In particular, the paper advances a perspective which suggests that divergence in how core and periphery management evaluate budget performance can enable more to be done with less in crisis periods. Overall, these findings have implications for the operation of budgetary practices in response to crises, especially in multi-tiered decision-making contexts.