The effect of regulation and goal orientation on performance measurement utilisation: evidence from Indonesian local governments

This study examines how regulation of performance measurement and goal orientation affects the utilization of performance measurements in the context of a developing countryʹs local governments. This study is based on a cross sectional survey participated by 163 managers of local government agencies in East Java, Indonesia, using a structural approach in data analysis. The results show that the imposition of regulation on performance measurement directly affects performance measurement adoption. The adoption of performance measurement and goal orientation mediate the relation between the regulation and the actual implementation of performance measurement. The likelihood of the actual implementation of performance measurement becomes stronger when there is strong goal orientation. The unique contribution of this study is that it offers a model of regulatory based performance measurement utlisation under result based management from a developing countryʹs perspective, depicting that imposed regulation on performance measurement will likely lead to its actual implementation when there is strong goal orientation.