Management Control and Employee-Perceived Organisational Performance of Local Governments: A Socioeconomic Challenges Perspective under Emerging Federalism

Abstract

Decentralised public service delivery increases the importance of management control for balancing accountability, administrative capacity, and service responsiveness while addressing the socioeconomic challenges faced by emerging local governments. A persistent gap concerns whether the four object-of-control dimensions are independently associated with perceived performance while also forming a broader management-control domain under emerging federalism. This study assesses the extent of personnel, cultural, action, and results controls and examines their individual and aggregate associations with employee-perceived organisational performance. Service delivery and institutional trust were not estimated as separate outcomes. The analysis draws on 580 usable questionnaires collected in February 2025 from permanent officer-level and assistant-level employees across all 88 local governments in Sudurpashchim Province, Nepal. Of 880 questionnaires distributed, 599 were returned, and 19 invariant-response cases were excluded. The final sample comprised 362 paper responses and 218 responses submitted through a Google Form link distributed exclusively via WhatsApp. Data were analysed using IBM SPSS Statistics 26 and SmartPLS 4 through descriptive statistics, reflective measurement-model assessment, formative higher-order modelling, structural modelling, common-method diagnostics, predictive assessment, and 5,000 bootstrap subsamples. Perceived implementation exceeded the scale midpoint of 4 for personnel controls (5.153), cultural controls (5.264), action controls (5.460), and results controls (5.242). In the dimension-specific model, the standardised associations with employee-perceived organisational performance were 0.293 for personnel controls, 0.135 for cultural controls, 0.249 for action controls, and 0.232 for results controls; all were statistically significant, although the predictor-specific effect size for cultural controls was negligible (0.018). In the separately estimated higher-order model, overall management control had a standardised coefficient of 0.791 and a large effect size of 1.668. Both specifications explained 62.5% of the variance, although predictive performance did not consistently exceed the linear-model benchmark. A cluster-sensitive robustness analysis yielded the same positive and statistically significant pattern across all four dimensions. The findings support an integrated assessment of capability development, organisational norms, administrative procedures, and performance feedback in local government. Future studies could use multi-source, longitudinal, and multilevel designs to measure objective service outcomes and institutional trust separately.