Examining the Causal Relationships of Balanced Scorecard Perspectives on Organizational Performance Improvement: A Case Study from the Indonesian Public Sector

Abstract

Objective - This research aimed to explore the causal relationships among performance indicators in the Balanced Scorecard framework of the Indonesia Public Sector. Methodology– Quantitative and path analysis were used to collect and analyze primary data. The research included 24 Regional Public Sector Offices and 268 Local Public Sector Offices as part of the sample. Findings - The findings showed substantial causal relationships within the Public Sector Balanced Scorecard perspectives, with training significantly influencing employee performance in taxation dissemination and tax supervision activities. However, the impact of training on tax audit performance was considered insignificant. The empirical evidence suggested that tax audit was the only performance indicator positively associated with tax compliance. Determinant factors for tax revenue included tax compliance, dissemination, audit, and supervision. Novelty - This research contributes crucial insights by showing intricate causal relationships among performance indicators, indicating the significant impact of training on distinct facets of employee performance. Additionally, the study identifies tax audits as an essential factor positively influencing tax compliance. The analysis provides new perspectives on the applicability of the Balanced Scorecard in the public sector context, particularly in developing countries. Type of Paper: Empirical JEL Classification: M40, C52, H30, H20, M49 Keywords: Balanced Scorecard; Path Analysis; Public Sector; Taxation; Performance Indicators. Reference to this paper should be referred to as follows: Pudjono, A.N.S; Wibisono, D; Fatima, I; Rachmania, I.N. (2024). Examining the Causal Relationships of Balanced Scorecard Perspectives on Organizational Performance Improvement: A Case Study from the Indonesian Public Sector, Acc. Fin. Review, 8(4), 23 – 31. https://doi.org/10.35609/afr.2024.8.4(3)