New Public Management rhetoric in developing country: will agencification and management control lead to organisational culture transformation?

Abstract

Agencification and granting managerial autonomy to public sector organisations are believed to change organisational cultures. This study used path and factor analysis on a sample of 600 public sector personnel in Indonesia to evaluate the role of agencification in the New Public Management (NPM) framework. The study revealed that agencification regarding personnel and financial management autonomy promotes a result-oriented culture while encouraging improved public organisation performance. However, it contradicted traditional NPM concepts by proving that more than management control alone is needed to promote a results-oriented culture among public sector personnel naturally. These findings show that its discourse and application must be modified to realise NPM's promise in the Indonesian setting fully. Future research should investigate the impact of external influences on agency formation and managerial control and ways for cultivating a results-oriented culture in public sector organisations. The study's limitations, such as its concentration on Indonesia and its temporal scope, necessitate comparative analysis across areas and longitudinal studies better to understand the dynamics of agencification and management control. The study's conclusions have ramifications for public sector reform in Indonesia and other nations. Governments must know the intricate interplay between autonomy,management control, and a results-oriented culture. They should also examine the importance of a pragmatic and context-aware approach to NPM.