Abstract
The objective of this research is the implementation of Good Corporate Governance in Indonesia began to be intensified by the government since the events of the Indonesian economic crisis in 1997-1998. Because, at that time almost all of the companies in Indonesia still used traditional governance, where company owners became company managers. Because of that, suspected because there is no separation between the supervision and management system resulting in many conflicts of interest in companies in Indonesia, it is one of the factors that exacerbate the economic crisis. At present in the industrial revolution 4.0 that will be faced, the implementation of Good Corporate Governance is expected to be the key determinant in maintaining the level of stakeholders' trust in corporate governance.In this article, the author will try to analyze the implementation of Good Corporate Governance in companies with Competitive Advantage and the influence of Enterprise Risk Management in mediating the relationship between the three variables. Keywords: Enterprise Risk Management, Good Corporate Governance, Cost Leadership Strategy, Diffetentiation Strategy, Indonesia DOI : 10.7176/JESD/10-8-05 Publication date : April 30 th 2019
Highlights
In a highly dynamic business environment such as today and increasingly competitive, companies are required to be able to increase their competitive advantage to be able to compete in the market besides the greater the risk in the market, both strategic risk, financial risk, competition risk, operational risk, and reputation risk
The results show that enterprise risk management (ERM) implementation has a significant positive impact on organizational performance
ERM is a partial mediator of the relationship between cost leadership strategies and organizational performance, ERM does not mediate the relationship between differentiation strategies and organizational performance
Summary
In a highly dynamic business environment such as today and increasingly competitive, companies are required to be able to increase their competitive advantage to be able to compete in the market besides the greater the risk in the market, both strategic risk, financial risk, competition risk, operational risk, and reputation risk. Companies must be able to manage risks that are likely to be faced, starting from the ability to analyze risks to the stage of implementing actions to minimize these risks and evaluate the implementation that is tailored to the needs of the company. This must be supported by Corporate Governance that can support the company's ability to implement Enterprise Risk Management to be able to create business sustainability and maximize company capability to be able to compete or win the market for their business. Corporate risk management includes: 1. Aligning risk appetite and strategy Management considers the entity's risk appetite in evaluating strategic alternatives, setting related objectives, and developing mechanisms to manage related risks
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