Management innovation and organizational performance: The mediating effect of performance management

Abstract

Management innovations (MIs) are widely adopted, but their influences on organizational performance are little researched in public settings. Positing that the MI-performance relationship is complex and is conditional over other characteristics of the organization, we examine the influence of MI on organizational performance both directly and indirectly through performance management (PM). PM is an important organizational process characteristic arising from public management reform and in itself influences performance. We test our hypotheses using structural equation models with data from three sources in English local governments. The findings indicate that the impact of MI on performance is not direct; it is mediated by PM. We also find that PM positively affects organizational performance. In conclusion, we discuss the implications of these findings for research and practice. © The Author 2010. Published by Oxford University Press on behalf of the Journal of Public Administration Research and Theory, Inc. All rights reserved.