From Governance to Public Value in Public Enterprises: A Capability Framework for Process Optimization

Public enterprises operate under a dual mandate: optimizing internal workflows while delivering reliable services and demonstrable public value. This study develops and tests a governance-enabled capability framework linking Process Optimization (PRO) to Service Quality (SQ) and Public Value (PV) in a public enterprise in Ecuador. Using an employee survey instrument (7-point Likert; N = 300) covering leadership and governance (LGO), digitalization and automation (DGA), standardization and BPM (STB), human capability (HCC), performance and data management (PDM), budget/line-item management (BLM), interunit coordination (IAC), PRO, SQ, and PV, we combine capability profiling (PCA + k-means) with PLS-SEM. PCA shows a dominant maturity gradient (PC1 = 87.17%). In the baseline model, PRO is most strongly associated with DGA (β = 0.242), BLM (β = 0.230), and IAC (β = 0.132), with very high explained variance (R 2 (PRO) = 0.976). The outcome chain is strong (PRO → SQ β = 0.964; SQ → PV β = 0.964). A second-order “Capability Maturity” robustness model preserves downstream performance (R 2 (SQ) = 0.929; R 2 (PV) = 0.930) while sharply reducing structural collinearity (max inner VIF for PRO predictors: 25.246 → 1.515). Results are interpreted as associations consistent with a capability–maturity mechanism.