Enhancing Public Organizational Performance in Vietnam: The Role of Top Management Support, Performance Measurement Systems, and Financial Autonomy

Abstract

By drawing on institutional theory and new public management (NPM) theory, this study examines the intervening roles of performance measurement systems (PMS) and financial autonomy on the relationship between top management support (TMS) and the performance of public organizations in an emerging market. The research model and hypotheses have been tested using partial least squares structural equation modeling (PLS-SEM) with 219 survey responses from accountants and managers working in public sector organizations (PSOs) in Vietnam. Results support both direct and indirect relationships between TMS and performance through PMS. Analysis shows that financial autonomy is the moderating variable for the relationship (1) between TMS and PMS, and (2) between PMS and organizational performance. From these findings, this study proposes theoretical and managerial implications to improve TMS and PMS to enhance performance in Vietnam’s public organizations. This paper especially suggests that policymakers in developing countries reform financial autonomy and the market principle.

Keywords:

• Financial autonomy
• organizational performance
• performance measurement systems
• public sector organization
• top management support
• Vietnam

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This research is funded by University of Economics Ho Chi Minh City, Vietnam (UEH).

Notes on contributors

Yen Thi Tran

Yen Thi Tran is a lecturer at the Faculty of Economics and Accounting at Quynhon University, Vietnam. She received her Ph.D. in Accounting from the University of Economics Ho Chi Minh City, Vietnam. Yen’s research spans the accounting and public administration areas. Her current interests include financial reporting quality, consolidated financial statements, performance measurement systems, and public service motivation. Her work has appeared in academic journals, including Journal of Accounting and Public Policy, International Journal of Public Administration, International Review of Administrative Sciences, Journal of Accounting in Emerging Economies, and Journal of Asia Business Studies.

Nguyen Phong Nguyen

Nguyen Phong Nguyen is a lecturer at the University of Economics Ho Chi Minh City, Vietnam. His research focuses on the interfaces between accounting and management. His publications have appeared in many well-respected journals, including Human Resource Management, Journal of Business Research, International Public Management Journal, Journal of Accounting and Public Policy, Public Management Review, and Business Strategy and the Environment and others.

Le Thi Bao Nhu

Le Thi Bao Nhu is a lecturer at the Faculty of Finance and Accounting at Saigon University, Vietnam. She received her Ph.D. in Accounting from the University of Economics Ho Chi Minh City, Vietnam. Her studies have concentrated on accounting, auditing, and finance.

Nguyen Thi Thu Hao

Nguyen Thi Thu Hao is an auditor in the State Audit Office of Vietnam. She received her BSc in Accounting and Auditing from the University of Economics Ho Chi Minh City, Vietnam. She is currently researching accounting, auditing, and finance.