PT Krakatau Steel's Exit Strategy: From Crisis to Profit

Abstract

This study discusses the restructuring strategy of Indonesian state-owned company (SOE/BUMN), namely PT Karakatau Steel. The study discusses the restructuring steps taken by the Karakatu Steel company to find a way out of the insolvency problem to a series of lawsuits in the commercial court. In the last eight years PT Krakatau Steel has recorded huge losses. However, the restructuring that has been carried out in the last two years has apparently been able to change the condition of the company. PT Krakatau Steel restructuring steps by changing the structure that was long rooted in the organization. This paper will explain the extent to which downsizing has become an exit strategy for companies to emerge from the crisis. In the process of the solution strategy, the culture change factor was very significant as part of the restructuring. The cultural issue has also become a problem in a number of BUMNs which have been involved lately. This problem is part of the impact of the SOE status quo culture, which for decades has always been protected by regulations and monopolies. In the past, BUMN was more oriented to the input side because the output factor was protected by law. But now, the era has changed. The era of protection and monopoly has been disrupted by technological advances. Now, society as a customer becomes everything. The community as a social institution has the power to determine the future of BUMN. Therefore, SOEs are increasingly required to conform to the values, needs and dynamics developing in society. This study will discuss how the organizational restructuring strategy of PT KS is able to bridge organizational changes from an insolvent situation to being able to record profits.