Based on their status, Higher Education Institutions (HEIs) are divided into private and public. Different characteristics make private HEIs have their uniqueness to be researched. This study aimed to test and obtain empirical evidence regarding the mediating role of intellectual capital efficiency on the relationship of the Performance Measurement System (PMS) to operational and financial performance. This survey research was distributed to 306 private HEIs in several provinces in Indonesia. The partial least square (PLS) technique was employed to test the hypotheses. The results showed that PMS directly affected intellectual capital efficiency, operational performance, and financial performance. The results also found that intellectual capital partially mediated the relationship between PMS, operational performance, and financial performance. This study theoretically confirmed the Resourced Orchestration Theory and expanded the literature on PMS in Private HEIs. Practically, this research provided input to managing private HEIs in Indonesia, which still needed better quality on average.

Keywords: Private Higher Education Institutions, Indonesia, Intellectual Capital Efficiency, Performance Measurement System, Performance