THE ROLE OF ORGANIZATIONAL INNOVATIONS IN IMPROVING LOCAL GOVERNMENT PERFORMANCE

Within the public sector, innovations are imperative in the spirit of new governance, flexibility, efficiency, and organization administration responsiveness. While the role and appropriateness of innovations in the private sector have been widely discussed in the literature, innovations confront some defiance in public sectors. Some studies have been conducted to understand the role of innovations in the performance of the private and public sector, but there are different results in the significances of the role of innovations. This study aims to understand the role of organizational innovation in the local government through quantitative analysis using multiple regression and Sobel Test. The results showed that innovations have partially mediated the relationship among organizational culture, leadership support and performance organizations. The study also found that leadership support and organizational culture directly influence organizational performance than if the influence is indirectly through innovation.