The study is focused upon public sector performance in the civil service in Indonesia. In recent years, traditional methods of measuring performance in Indonesia have been placed under increasing levels of scrutiny in response to national policy requirements relating to public sector reform. One of these traditional methods has involved the extensive use of Balanced Scorecard approaches to performance management within the civil service.
The main aim of this study is to evaluate the extent to which Balanced Score Card (BSC) approaches have been effective in isolating strategically-focused principles of organizational performance within the civil service in Indonesia. Specifically, the study was designed to address three research questions: first, how do strategically-focused organsational (SFO) principles relate to each other within the adoption of BSC framework;second, to what extent, does the size of the organisation impact upon the implementation of BSC? And third, how strategic working position influence the effectiveness of BSC?
In addressing these research questions, the study offers three unique contributions to existing literature. First, the study is rare in that it compares the adoption of BSC in two types of public organizations (bigger versus smaller organizations) in an emerging economy country. Second, almost all research concerning the strategic use of BSC has involved relatively senior persons within organizations as respondents; this research, however, involves employees drawn from every level of the participating organizations in order to generate a more comprehensive picture of BSC implementation. Third, this research is unique because it uses a bespoke questionnaire developed from literature-derived SFO principles covering: strategy translation, strategy alignment, strategy as everyone’s everybody job, strategy as a continual process and leadership involvement. Thus, empirical evidence in the form of fixed response questionnaires was gathered from 12 Customs and Excise organizations which fall under the auspices of the Ministry of Finance in Indonesia. The respondents were N=1675 employees drawn from various levels of the organizations, all of whom were familiar with the BSC approach due to its use for both organizational and individual performance within their work settings. The data were analyzed using Factor Analysis and Structural Equation Modelling (SEM).
Three main findings were generated from this study. First, this study confirms that all SFO principles, correlate significantly with each other under the BSC framework. This finding highlights the potential for SFO principles when associated with BSC. Second, the research reveals that BSC-led approaches were seen by respondents to be more effective when adopted in relatively smaller public sector organizations. Third, the research provides empirical evidence that employees with high management levels are reported to have higher for all BSC-driven SFO principles, apart from ‘strategy as continual process’. This raises questions about the extent to which influential higher management employees perceive these principles to represent distinctive features within the domain of public sector performance. The implications of these findings are discussed with reference to the applicability and perceived effectiveness of the BSC approach to public sector organizations in Indonesia.
H1 - Management and Organizational Performance (PMRA-Sponsored panel)
