The Impact of Strategic Leadership on the Financial Sustainability of Public Service Entities: A Survey in Vietnam

Abstract

In the context of increasingly complex public sector challenges, financial sustainability has become a critical imperative for public service entities. Strategic leadership is widely recognized as a vital mechanism in guiding these organizations through fiscal constraints while ensuring long-term performance. This study investigates the impact of strategic leadership on the financial sustainability of public service entities in Vietnam. Using a quantitative research approach, survey data were collected from 384 senior managers across provincial departments, agencies, and publicly funded institutions. The results of structural equation modeling (SEM) reveal that strategic leadership measured through vision articulation, environmental scanning, stakeholder engagement, and innovation orientation has a significant and positive influence on financial sustainability. The correlation index between strategic leadership and financial sustainability was positive and significant, r (304) =0.678; p≤.05. This inferred that as the level of strategic leadership increases, the financial sustainability also increases. The T value for strategic leadership was also significant: T (304) = t=19.457; β= 0. 0.453.; P≤.05. These findings suggest that enhancing strategic leadership competencies is essential for strengthening the long-term fiscal health and service delivery capacity of Vietnam’s public sector. The study concludes with policy implications and recommendations for capacity-building interventions.