Abstract
The New Public Management allows us to reflect upon whether intellectual capital helps public sector organisations meet their performance benchmarks. Sustainable economic performance gains importance from the public sector’s service ideal. Although there have been empirical endeavours using intellectual capital as operational variables, this study examines the theoretically informed relationship between the intellectual capital construct and its construct dimensions and the sustainable economic performance construct and its construct dimensions. The decision-making inputs of senior officials in the Malaysian public sector are vital for evaluating the relationship, as these officials are the individual strategists of the collective organisational strategy. The study conducted a survey that received 1092 usable responses and analysed them using the structural equation modelling research method. The findings showed a robust theoretical relationship between intellectual capital and sustainable economic performance. Furthermore, the study identified intellectual capital items that play a vital role in supporting public sector sustainable economic performance in Malaysia under New Public Management. The findings provide useful knowledge for public sector officials and policymakers, and for further research.
Highlights
New Public Management (NPM) requires the Malaysian public sector to adopt its ethos from the private sector, but with a long-term economic performance outlook, to deliver goods and services that contribute to Vision 2020 effectively and efficiently, and to become a reputable, citizen-focused cluster of high-performing organisations
The findings showed that intellectual capital (IC) in the NPM context in Malaysia strongly facilitated sustainable economic performance
The study empirically validated the relationship with items included in the construct dimensions
Summary
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. A review of the literature has shown a positive, non-linear relationship between intellectual capital and performance in organisations, regions, and countries [4] This non-linear relationship can arise because the public sector must use its organisational capacity with available resources to create legitimated values. Many countries have embraced NPM as a basis for structural reform of the public sector, using intellectual capital (IC) as a mode of operation to orient a sustainable economic enterprise system [9]. The NPM reforms have transformed the Malaysian public sector, notably with the national government transformation program launched in 2010 to improve accountability and effectiveness These strategically directed transformations provide an opportunity to ascertain sustainable economic performance for public-sector organisations [14].
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