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

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.