Recommendations

This chapter has been devoted to describing how municipality Enschede could apply the financial function models. Literature review and case study research identified two different models to integrate the financial function: the centralized model and the hybrid model. These two models provide the opportunity to create several variants since there is no permanent set of blue prints that determines which models should be selected. More importantly, the integration of the financial function models has a situational context as elaborated in the assumptions in the previous sub sections. The analysis in the previous sub section indicates that the centralized and the hybrid model can both fit municipality Enschede in a certain scenario. The scenario sketched for the hybrid model could prove to be a more realistic scenario since municipality Enschede and the joining municipalities are formerly discussing and researching the establishment of the IBO, which would have a major influence on the financial function. Furthermore, the executive board of municipality Enschede has decided on the internal independence of Onderhoud Enschede. In other words, Onderhoud Enschede will remain part of municipality Enschede however they will have their own (financial) operational management. By gaining sufficient experience with this method, a development towards an independent organization would ideally be the next step. Besides, the hybrid model is essentially a further development of the current financial function with much more emphasis on Concern.

Therefore, it is recommended to integrate the hybrid model for the financial function. This recommendation is based on the following arguments:

 The hybrid model combines the key advantages of both centralization and

decentralization.

 The hybrid model leads to enhanced understanding of local needs and therefore to more

situation-specific advisory. The environment in which municipality Enschede exercises its functions will evolve significantly in the coming years due to the realization of the IBO and the (internal) independency of business units. It is expected from the employees more than before to make the connection with policy and the outside world, which requires strengthening of the understandability of local needs and an increase in advisory skills. The enhanced understanding of local needs will also lead to improved situation-specific advisory which will be required in order to cope with the intensification of organizational dynamics.

 The hybrid model is principally a further development of the current financial function.

Apart from the couple of inefficiencies, the current financial function works well and is favored by many employees. However the employees also state the need for more uniformity, centralization and more of a concern approach, which can be achieved by integrating the hybrid model.

 The hybrid model leads to more critical power. Since the financial function is not entirely

centralized, Concern and the decentralized business control units could function as each others countervailing force. This could lead to higher critical ability for the financial function compared with a complete centralized financial function.

Following the recommendation to apply the hybrid model, it is strongly advised to overcome the challenges associated with the hybrid model mentioned by literature review and case study research. The following recommendations are made in order to take fully advantage of the hybrid model and can be perceived as important preconditions for successful hybrid model integration:

 Adequate standardization of processes and activities. The hybrid model has more

fragmentation compared the centralized model; therefore standardization should receive additional attention. Concern should be the leading factor in the financial function and should reinforce standardization and uniformity.

 Only activities of financial policy nature should be performed in the business

control units. Ideally, a clear distinction is made in the financial activities in the staff offices; financial operational activities should be centralized in department Concern or should be performed in the IBO in order to take advantages of economies of scale.

 Frequent rotation of employees. Rotation over time provides variety in work activities

and leads to a fresh look at departmental affairs from time to time. Due to rotation employees can learn from each other and apply each other’s best practices. This reinforces standardization and uniformity. Thereby, due to rotation employees can take over each other’s work if necessary. The establishment of the IBO will enforce the need for frequent rotation of employees since there is the risk of missing crucial organization knowledge due to the increased distance form the primary processes. Thus frequent rotation will have an important bearing due to the recommendation of applying the hybrid model.

 Applying a network approach. Due to the fundamentally changing structure in which

municipalities operate, it is important more than ever for employees to apply a network approach and think outside their own department and or organization. The establishment of the IBO and the future outplacements of business units will require of the municipal organization to work with core teams surrounded by an extensive network of colleagues from in- and outside the organization who do the jobs together. This approach requires other competences of employees such as customer orientation, goal driven and communication proficiency.