Improving government performance in Indonesia : the experience of the balanced scorecard in the ministry of finance

Abstract

To be effective and efficient in the 21st century, public sector organisations need to practise a sound and innovative performance management tool. One tool used for strategic performance management in the public sector is the Balanced Scorecard (BSC). It can assist the definition of better organisational key performance indicators to improve performance outcomes. The BSC system not only promotes synergy and alignment of strategies among departmental and functional units, but also promotes strategic communication for decision-makers to sustain high organisational performance outcomes. Literature on the private sector and on many developed countries provide evidence that the BSC plays crucial roles in implementing successful changes within an organisation to improve and sustain performance in the global economic environment. The BSC can also be implemented as a strategic performance management tool to promote high-performing public sector organisation in developed countries (Hoque 2011,Umashev and Willet 2008,Kaplan and Norton 2004). However, while there is an abundance of literature on implementing the BSC in the public sector in many developed countries, there is a dearth of literature that explores the situation of public sector organisations in Indonesia. Employing an explorative-explanatory case study approach on the implementation of the BSC in the Indonesian Ministry of Finance (IMOF) during 2006-2009,the researcher found that the organisation needed a more strategic leadership style in implementing innovative performance management systems such as the BSC. Using the leadership accountability framework as a means to analyse the process of improving and sustaining public sector performance outcomes, this study found four key factors that contributed to successful implementation of the BSC in efforts to improve and sustain the IMOF performance outcomes: leadership effectiveness, strategy and human resource (HR) management ‘fit’, performance management system and performance governance. Overall, leadership roles are the key factors in improving government performance sustainably.

Date of Award	2014
Original language	English
Supervisor	Mark Turner (Supervisor), Wahyu Sutiyono (Supervisor) & Monir Mir (Supervisor)