The Influence of Innovation and Transformational Leadership as a Mediator of Internal Control Systems on the Performance of Public Sector Organizations
Keywords:
Internal Control Systems (ICS), Innovation, Transformational Leaadership (TL) and Organizational Performance (OP), Public Sector Organizations
Abstract
Abstract
In the context of globalization and economic transformation, countries, including Indonesia, are striving to improve the performance of their public sector organizations. This article reviews the significant improvement in the efficiency and performance index of the Indonesian government according to the World Bank. However, some regional governments, such as Batam City, face difficulties in achieving the set performance targets. In-depth research is needed to identify the factors that influence such performance improvements.
The Batam City government has sought to improve performance through strengthening internal control, innovation, and transformational leadership. However, the results have not reached their maximum potential. This article suggests further research on the relationship between Internal Control Systems (ICS), Innovation, Transformational Leaadership (TL) and Organizational Performance (OP) in the Indonesian public sector. The research also explores to what extent innovation can mediate the relationship between ICS and organizational performance, as well as how transformational leadership affects such mediation.
City governments and other public sector organizations can use these findings as benchmarks and guidelines in an effort to advance their performance in the face of the demands of modernization and global competitiveness.
References
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Shea, C. M. (1999). The effect of leadership style on performance improvement on a manufacturing task. Journal of Business, 72(3), 407–422. https://doi.org/10.1086/209620
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Wettenhall, R., & Aulich, C. (2009). The public sector’s use of agencies: A dynamic rather than static scene. Public Organization Review, 9(2), 101–118. https://doi.org/10.1007/s11115-009-0072-0
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Aziz, M. A. A., Rahman, H. A., Alam, Md. M., & Said, J. (2015). Enhancement of the Accountability of Public Sectors through Integrity System, Internal Control System and Leadership Practices: A Review Study. Procedia Economics and Finance, 28, 163–169. https://doi.org/10.1016/s2212-5671(15)01096-5
Barling, J., Weber, T., & Kelloway, E. K. (1996). Effects of transformational leadership training on attitudinal and financial outcomes: A field experiment. Journal of Applied Psychology, 81(6), 827–832. https://doi.org/10.1037/0021-9010.81.6.827
Bass, B. M., & Avolio, B. J. (1990). Developing Transformational Leadership: 1992 and Beyond. Journal of European Industrial Training, 14(5), 21–27. https://doi.org/10.1108/03090599010135122
Bloch, C., & Bugge, M. M. (2013). Public sector innovation-From theory to measurement. Structural Change and Economic Dynamics, 27, 133–145. https://doi.org/10.1016/j.strueco.2013.06.008
Buil, I., Martínez, E., & Matute, J. (2019). Transformational leadership and employee performance: The role of identification, engagement and proactive personality. International Journal of Hospitality Management, 77, 64–75. https://doi.org/10.1016/j.ijhm.2018.06.014
Chin, W. W. (n.d.). The Partial Least Squares Approach to Structural Equation Modeling. https://www.researchgate.net/publication/311766005
Damanpour, F., Walker, R. M., & Avellaneda, C. N. (2009). Combinative effects of innovation types and organizational Performance: A longitudinal study of service organizations. Journal of Management Studies, 46(4), 650–675. https://doi.org/10.1111/j.1467-6486.2008.00814.x
de Vries, H., Tummers, L., & Bekkers, V. (2018). A stakeholder perspective on public sector innovation: why position matters. International Review of Administrative Sciences, 84(2), 269–287. https://doi.org/10.1177/0020852317715513
Demircioglu, M. A., & Audretsch, D. B. (2019a). Public sector innovation: the effect of universities. Journal of Technology Transfer, 44(2), 596–614. https://doi.org/10.1007/s10961-017-9636-2
Demircioglu, M. A., & Audretsch, D. B. (2019b). Public sector innovation: the effect of universities. Journal of Technology Transfer, 44(2), 596–614. https://doi.org/10.1007/s10961-017-9636-2
Freeman, J., & Engel, J. S. (2007a). California Management Review Models of Innovation: Startups and Mature Corporations.
Freeman, J., & Engel, J. S. (2007b). California Management Review Models of Innovation: Startups and Mature Corporations.
Google Form. (2023). Google Form. Https://Forms.Gle/WVh9UZSefmZfBJbbA.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing Theory and Practice, 19(2), 139–152. https://doi.org/10.2753/MTP1069-6679190202
Hanges, P., Ruiz-Quintanilla, S. A., & Dorfman, P. W. (1999). Culture specific and cross-culturally generalizable implicit leadership theories. https://doi.org/10.1037/t15043-000
Hoai, T. T., Hung, B. Q., & Nguyen, N. P. (2022). The impact of internal control systems on the intensity of innovation and organizational performance of public sector organizations in Vietnam: the moderating role of transformational leadership. Heliyon, 8(2). https://doi.org/10.1016/j.heliyon.2022.e08954
https://siasn-instansi.bkn.go.id/. (n.d.).
https://simpeg.batam.go.id/admin/main/login. (n.d.).
https://www.statology.org/slovins-formula-calculator/. (n.d.). Slovin.
Huafei Wei, Jun Chen, Muhammad Adnan, Zahid Chudhery, & and Wenjie Fang. (2023). Empirically investigating the organizational identity mechanism of empowering leadership affecting the innovation performance of knowledge workers. Https://Www.Emerald.Com/Insight.
Jaleswari. (2022). https://voi.id/ekonomi/214017/peningkatan-indeks-efektivitas-ri-di-bank-dunia-jadi-modal-besar.
Jaskyte, K. (2012). Boards of directors and innovation in nonprofit organizations. Nonprofit Management and Leadership, 22(4), 439–459. https://doi.org/10.1002/nml.21039
Kwong, K., & Wong, K. (2015). Partial least squares structural equation modeling (PLS-SEM) techniques using SmartPLS. http://www.researchgate.net/publication/268449353
Lægreid, Per. V. Koen. (2007). Governance of Public Sector Organizations- Proliferation, Autonomy, and Performance.
Laporan Kinerja Kota Batam. (2021). Laporan Kinerja Kota Batam Tahun 2021.
Li, Y., Liu, Y., & Zhao, Y. (2006). The role of market and entrepreneurship orientation and internal control in the new product development activities of Chinese firms. Industrial Marketing Management, 35(3), 336–347. https://doi.org/10.1016/j.indmarman.2005.05.016
Maria, E., Kristen, U., Wacana, S., & Halim, A. (2017). Ekuitas: Jurnal Ekonomi dan Keuangan E-GOVERNMENT DAN KORUPSI: STUDI DI PEMERINTAH DAERAH, INDONESIA DARI PERSPEKTIF TEORI KEAGENAN. https://doi.org/10.24034/j25485024.y2021.v5.i1.4789
MENPANRB. (2020). Peraturan Menteri PANRB Nomor 26 Tahun 2020 tentang Pedoman Evaluasi Pelaksanaan Reformasi Birokrasi.
Nguni, S., Sleegers, P., & Denessen, E. (2006). Transformational and transactional leadership effects on teachers’ job satisfaction, organizational commitment, and organizational citizenship behavior in primary schools: The Tanzanian case. School Effectiveness and School Improvement, 17(2), 145–177. https://doi.org/10.1080/09243450600565746
Park, Y. J., Matkin, D. S. T., & Marlowe, J. (2017). Internal Control Deficiencies and Municipal Borrowing Costs. Public Budgeting and Finance, 37(1), 88–111. https://doi.org/10.1111/pbaf.12120
Parry, K., & Proctor-Thomson, S. (2002). Leadership, culture and performance: The case of the New Zealand public sector. Journal of Change Management, 3(4), 376–399. https://doi.org/10.1080/714023843
Peltier-Rivest, D. (2018). A model for preventing corruption. Journal of Financial Crime, 25(2), 545–561. https://doi.org/10.1108/JFC-11-2014-0048
Pham, H. N. (2018). Chapter 6: Leadership and Public Sector Reform in Vietnam (pp. 127–149). https://doi.org/10.1108/s2053-769720180000030006
Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common Method Biases in Behavioral Research: A Critical Review of the Literature and Recommended Remedies. In Journal of Applied Psychology (Vol. 88, Issue 5, pp. 879–903). https://doi.org/10.1037/0021-9010.88.5.879
Sarstedt, M., Ringle, C. M., & Hair, J. F. (2017). Partial Least Squares Structural Equation Modeling. In Handbook of Market Research (pp. 1–40). Springer International Publishing. https://doi.org/10.1007/978-3-319-05542-8_15-1
Shamir, B., & Howell, J. M. (2018). Organizational and contextual influences on the emergence and effectiveness of charismatic leadership. In Monographs in Leadership and Management (Vol. 9, pp. 255–281). Emerald Group Publishing Ltd. https://doi.org/10.1108/S1479-357120180000009020
Shanker, R., Bhanugopan, R., van der Heijden, B. I. J. M., & Farrell, M. (2017). Organizational climate for innovation and organizational performance: The mediating effect of innovative work behavior. Journal of Vocational Behavior, 100, 67–77. https://doi.org/10.1016/j.jvb.2017.02.004
Shea, C. M. (1999). The effect of leadership style on performance improvement on a manufacturing task. Journal of Business, 72(3), 407–422. https://doi.org/10.1086/209620
Shen, H., Lan, F., Xiong, H., Lv, J., & Jian, J. (2020). Does top management Team’s academic experience promote corporate innovation? Evidence from China. Economic Modelling, 89, 464–475. https://doi.org/10.1016/j.econmod.2019.11.007
Torugsa, N. (Ann), & Arundel, A. (2016). Complexity of Innovation in the public sector: A workgroup-level analysis of related factors and outcomes. Public Management Review, 18(3), 392–416. https://doi.org/10.1080/14719037.2014.984626
Vassallo, J. P., Banerjee, S., Zaman, H., & Prabhu, J. C. (2023). Design thinking and public sector innovation: The divergent effects of risk-taking, cognitive empathy and emotional empathy on individual performance. Research Policy, 52(6). https://doi.org/10.1016/j.respol.2023.104768
Wettenhall, R., & Aulich, C. (2009). The public sector’s use of agencies: A dynamic rather than static scene. Public Organization Review, 9(2), 101–118. https://doi.org/10.1007/s11115-009-0072-0
World Bank. (2022). https://databank.worldbank.org/source/worldwide-governance-indicators.
Published
2023-11-10
How to Cite
Ali Musana, & Agustinus Setyawan. (2023). The Influence of Innovation and Transformational Leadership as a Mediator of Internal Control Systems on the Performance of Public Sector Organizations . Asian Journal of Management, Entrepreneurship and Social Science, 3(04), 1214-1232. Retrieved from http://ajmesc.com/index.php/ajmesc/article/view/581
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