Intuitive Practice by Municipal Controllers

Abstract

The restrictions placed by New Public Management on the work of municipal controllers raise questions regarding if and when these public controllers can make effective use of their intuition. A study has been carried out to answer these questions. Intuition in this study is defined as a ‘non-conscious process involving holistic associations that are produced rapidly, which result in affectively charged judgments’. While experience deals with known facts, intuition focuses on new ones. The study was carried out in the form of a simulation in which municipal controllers were asked to analyse the financial situation of a fictional municipality. Afterwards the participants were presented with four factors and were instructed to indicate which factor had been decisive in the financial process. Two factors required extensive experience as a municipal controller, while one factor required the use of intuition. The initial expectation was that experienced controllers would make more use of their intuition. Another supposition was that the use of intuition would increase with increasing time pressure. The research has shown that good use of intuition does indeed require experience. Thus, experienced public controllers make more and better use of their intuition than their less experienced colleagues. In addition, the use of intuition increases with the decrease in time available for analysis, but experience plays a crucial role in this respect. Further, the study reaches the conclusion that intuition and rational analysis do not so much exclude as complement each other. A good use of intuition requires considerable experience in rational analysis. Finally, the results of the study demonstrate that the use of intuition does not lead to worse decisions than those made using rational analysis.

Key Words:

• Municipal controllers
• intuition
• public controlling

Notes

1. The role of a Dutch municipal controller is a combined head of finance and general auditor. The municipal controller is therefore responsible for conducting financial business, as well as for auditing and analysis of processes.

2. Prior to building up this simulation, there were expert conversations with 23 experienced and 19 less experienced municipal controllers. They were asked to name the most common risk factors in financial business conduct. The experienced controllers pointed to deficient official budgetary discipline and overly ambitious Municipal Councils as the two principal risks. The less experienced controllers pointed to personnel costs as the most risky factor. Both groups never point to an alderman's project as a risk factor. Furthermore, during these conversations, the use by experienced controllers of a ‘diagnosis tree’ for the analysis of a municipal financial situation was striking. The less experienced controllers did not use this diagnosis model and they tended to observe the results of personnel costs in the first instance.