The influence of top management team power and strategic choices in public hospitals management control systems in Indonesia

This study investigated the relationship between power levels of top management team members, strategic choices, and management control systems (MCS) in regional public hospitals (RPHs-BLUD) in Indonesia. With the implementation of New Public Management principles in public hospitals, effective management control is crucial. RPH-BLUD in Indonesia faces challenges in designing and implementing ideal MCS, particularly related to the dominance of medically-oriented managers. Employing a quantitative approach, data was collected through a questionnaire survey of top management team members in RPHs-BLUD in Indonesia. The data were analyzed using Structural Equation Modeling with the Partial Least Squares (SEM-PLS) technique. Findings revealed that defender and prospector strategies positively influenced both bureaucratic and less bureaucratic MCS designs, as well as diagnostic MCS use. Informal authority moderated the relationship between prospector strategy and interactive MCS use. However, formal authority did not moderate the relationship between defender strategy and more bureaucratic MCS design, while informal authority did not moderate the relationship between prospector strategy and less bureaucratic MCS design. Practical implications involved enhancing understanding of the impact of strategy, authority, and interactions among management team members on the design and use of MCS in RPHs-BLUD, with a focus on organizational effectiveness and flexibility