State-owned enterprises’ performance in Indonesia: a strategic typology perspective

Abstract

PurposeState-owned enterprises’ (SOEs) goals are perceived as two-sided blades, providing goods or services to the public on one side and escalating the government’s wealth on the other side. Treating the SOEs, government encounters the problem of injection strategy or privatize them. At the same time, managers have the option to formulate the SOEs strategy to boost performance. By using Miles and Snow’s typology strategy and the above factors, this paper investigates those impacts on Indonesia’s SOEs’ performance. This study aims to propose strategic typology as the main predictor with other variables such as the size, ownership structure, market competitiveness and capital subsidy on SOEs.Design/methodology/approachThe study uses archived SOEs’ financial data from 2014 to 2018 to predict the financial performance using ordinal logistic regression analysis. The additional factors, such as firm size, ownership structure, market concentration and capital subsidy, are incorporated.FindingsThe result demonstrates that SOEs strategic typology, market concentration, size, ownership structure and capital subsidy significantly affect Indonesia’s SOEs’ performance.Originality/valueTo the best of the authors’ knowledge, this paper is the first elaborating government policies for SOEs, such as capital subsidy and state ownership, on the perspective of Miles and Snow’s strategy-performance relationship. Correspondingly, the paper contributes to examine the Indonesian characteristic SOE type with the performance. No single study has previously explored this relationship in the context of SOE in Indonesia.