Implementing performance measurement systems

Abstract

This research explores the drivers behind the implementation of performance measurement systems (PMSs) in Indonesian local government (ILG). It analytically assesses Indonesia's attempt to introduce a PMS by addressing three research questions: RQ1) Do organisations in developing countries actually use PMSs to aid decision-making and help plan for future performance improvement? RQ2) Do the three isomorphic pressures exist in the development and use of PMSs? and RQ3) If institutional isomorphism is evident, can accountability exist within the development and use of PMSs given these pressures. Design To assist in answering the research question, both closed and open-ended interview questions were developed. The questions were structured under four headingsaccountability, performance measurement, institutional isomorphism and others. In-depth interviews were conducted in 2010 with 24 Indonesian local governments targeted using purposive sampling. Both types of local government (regional and municipal) and both localities (Java and non-Java) were represented. A cross-section of participants ensured a range of responses from low-level officials to high-level managers in functions including administrative, finance, planning and audit, were obtained. Findings Results determined that although employees perceived coercive isomorphism as being a driver of ILG compliance with LAKIP, many councils were still not reporting and those that were, were not doing it well. Many councils lacked management motivation with some choosing to merely mimic (mimetic isomorphism) what others were doing. Better-resourced councils made use of external consultants or local universities where knowledge was shared (normative isomorphism). Practical implications An understanding of factors influencing the development and use of performance measures, in turn, can be used not only to improve PMSs in the future but to improve the quantity and quality of LAKIP reporting. Originality / Value The theoretical development and interpretation of this research is drawn from institutional theory with a major contribution being that it provides an in-depth conceptual overview and understanding of factors influencing the development and use of performance measures. Further, it fills a gap in the literature exploring PMSs and accountability in a developing countryin this case, Indonesia.

Indonesian Local Government’s Accountability and Performance: the Isomorphism Institutional Perspective

“…This is also reinforced by the findings of several studies which state that the organization will be faced with competition to gain institutional legitimacy and political power, as well as community and customer support (Chenhall, 2003;Akbar et al, 2012;Sofyani and Akbar, 2013 ;Wijaya and Akbar, 2013;Akbar et al, 2015;Ahyaruddin and Akbar, 2016). Performance measurements and improvements in the government organizations need to be viewed more thoroughly and comprehensively.…”

The implementation of Cost-Effective in Spanish local governments: Analysis of institutional work in a case study

“…Aunque a los sistemas de costes para el sector público se le atribuyen como objetivos principales la rendición de cuentas y la mejora de la toma de decisiones (Brusca y Montesinos, 2013), diversos estudios evidencian que la información que proporcionan es muy poco utilizada para esto último (Geiger y Ittner, 1996;Brignall y Modell, 2000;Verbeeten, 2011). Por el contrario, los sistemas de costes se implantan fundamentalmente para responder a las presiones coercitivas y, de esta forma, obtener legitimidad y una apariencia de racionalidad y eficiencia (Geiger y Ittner, 1996;Jackson y Lapsley, 2003;Modell, 2009;Akbar et al, 2015). Así, por ejemplo, Carvalho et al (2012) concluyeron que las EE.LL.…”

“…La literatura previa argumenta que las herramientas de costes, tal como el CESEL en este estudio, suelen implantarse en las organizaciones del sector público principalmente para satisfacer los mandatos gubernamentales canalizados a través de la regulación (Jackson y Lapsley, 2003;Modell, 2009;Akbar et al, 2015). No obstante, las herramientas de costes implantadas así suelen ser de poco uso para el control y mejora de la toma de decisiones (Geiger y Ittner, 1996), al estar las organizaciones principalmente preocupadas por el uso de la información a efectos de mejorar su legitimidad (Carvalho et al, 2012).…”

“…Estos aspectos evidencian así, que el CESEL se ha constituido como un instrumento que puede aportar legitimidad, por ser identificado con una mayor transparencia, aunque ésta no sea realmente efectiva. A este respecto, la literatura previa sugiere mayoritariamente que las organizaciones del sector público tienden a introducir cambios en la gestión de costes fundamentalmente para incrementar su legitimidad, aunque su reflejo en la práctica sea mínimo (Brignall y Modell, 2000;Geiger e Ittner, 1996;Verbeeten, 2011;Akbar et al, 2015).…”

“…El aumento de la eficacia y eficiencia en la gestión de los servicios públicos, en consonancia con los principios de la Nueva Gestión Pública (Lapsley y Pallot, 2000;Akbar et al, 2015), ha sido una de las principales preocupaciones de la investigación en contabilidad de gestión del sector público en las dos últimas décadas (Helden, 2005;Modell, 2009;Brusca, 2010;Helden y Northcott, 2010;Jacobs, 2012;Jacobs y Cuganesan, 2014).…”