Indonesian Construction Industry Research Articles

The Effect of Capital Structure Management on Firm’s Value: The Case of Final Tax Regulation on Indonesian Construction Firm

In 2008, the Indonesian government implements the final income tax regulation, a new income tax concept. Since its implementation, the final income tax has had a significant impact on how the construction industry calculates its income tax liability. Implementation of the final income tax, which mandates that the final tax be calculated directly on the firm’s revenue, has directly reduced the tax shield that the firm benefits from. The M&M theorem provided a new perspective on capital structure. The theory stated that a firm’s capital structure influence on the cost of capital depends on the firm’s tax shield implications. Combining the M&M theorem and the final tax implementation, the purpose of this study is to determine if a firm’s capital structure influences the firm value and whether the cost of capital mediates such effect in the Indonesian construction industry through the proxy of long-term debt-to-equity ratio, share price, and weighted average cost of capital. Using a quantitative methodology, secondary data from construction companies listed on the Indonesia Stock Exchange between 2012 and 2019 are collected for this study. This study utilized linear regression and the simple mediation model. The result indicates that the long-term debt-to-equity ratio has a direct and significant positive effect on the stock price of the company. Meanwhile, the weighted average cost of capital does not have a significant mediating effect on the relationship between capital structure and stock price. The finding of this research is intended to provide firm managers an insight surrounding the implication of capital structure within Indonesia construction industry in order to be able to increase firm’s value.

Investigation of requisite measures for enhancing sustainable construction practices in Indonesia

PurposeThis study investigates the requisite measures for enhancing sustainability practices within the Indonesian construction industry based on professional perspectives.Design/methodology/approachThis study used quantitative approach for data collection. A survey was conducted, using a questionnaire completed by 482 Indonesian construction professionals as a research instrument, and data were analyzed through reliability and exploratory factor analysis.FindingsThe findings suggest that for sustainability practices to become widely implemented within the Indonesian construction industry, certain measures are required. These include the need to raise awareness through education, development of standardized benchmarks, and the implementation of appraisal systems by the government, professional bodies, and academic institutions. These approaches are expected to build capacity and enhance the knowledge of sustainability among construction professionals and their clients. In addition, sustainable construction practices could be encouraged through a subsidized green market, which could be finalized supported by the government from financial penalties levied against non-sustainable practices.Originality/valueBy implementing the underlying strategies within the Indonesian construction industry, the poor knowledge, awareness, implementation, and motivation for sustainable practices within the Indonesian construction industry could be addressed, thereby reducing the environmental impacts associated with buildings and construction activities.

A lesson learned from the integration of BIM in construction engineering education in an Indonesian Polytechnic

The Indonesian construction industry has increasingly adopted Building Information Modeling (BIM). One of the barriers to adopting BIM is BIM skills among graduates are still rare. Therefore, higher education institutions have to adopt BIM into their curriculum. However, as BIM is a new concept in construction engineering, many higher education institutions have a problem integrating BIM. Therefore, the paper proffers a syllabus to integrate BIM in a vocational higher education institution. The research methodology follows the Tyler model of curriculum development. It started with a review of prominent BIM integration into higher education research. Then, discussion with BIM practitioners from the industry to acquire information on current BIM-related job specifications in Indonesia. The team teacher then discussed and analyzed the results to create an initial syllabus. Further, the students' performance and feedback are observed during two years of course offering from 2019 to 2021. Improvement of the syllabus is based on observation and feedback results. The progress has increased students' performance in the BIM course. The students' performance is excellent even though the course was offered online due to a pandemic.

Analisis Waste Dengan Pendekatan Lean Construction Pada Proyek Pembangunan Jembatan Sungai Manggar Balikpapan

According to Abduh (2007) Indonesian construction industry still has inefficiency in its implementation, which is because there is still a lot of waste on the execution. Efforts to prevent or reduce waste on the project will increase the contractor's profits and minimize the negative effect to environment (Julisa et al., 2019). One method that can be used is lean construction. lean construction has the main objective of continuously increasing production efficiency and eliminating all waste. In this study, a waste analysis using a lean construction approach was carried out which had the most influence on the Manggar River Bridge project. This study uses descriptive analysis of percentages with the aim of describing the condition of the phenomena of the variables and indicators being analyzed. After doing the analysis, it was obtained Waste Lean Construction The most influential on the Manggar River Bridge Project is Waiting with work activities stopped due to bad weather (Waiting) with an impact on this project 131 hours of work or 13.1 working days or the equivalent of 1.79% of the total working days cannot be done due to bad weather.

Development of Concrete Material Technology in the context of supply - demand based on geographical aspects

The Indonesian construction industry is one of the leading sectors with significant contributions to economic growth. A current major issue in the industry is to strive for sustainable development focuses on three aspects, social, environmental, and economical. The use of technology, especially concrete material technology, is one of the supporting factors to achieve the goal. Concrete material usage, with cement as the main component, is quite prominent in the industry, supported by Indonesia’s top 12th cement producer globally with a 2,05% contribution of the world’s total cement production. However, the industry performance in each part of Indonesia also needs to be observed, considering that Indonesia has numerous islands. This study aims to evaluate the landscape of technological development of construction material regarding the supply-demand from geographical dimensions. This supply-demand analysis can consider policy strategies to support sustainable development programs. The data used in this study are derived from the production and consumption aspects of concrete material with an economic approach. The study shows the relationship between the development of concrete construction technology in terms of supply and market conditions. In addition, this study discusses the sustainable aspect of concrete material technology in the context of the trend of cement usage.

Safety Climate in the Indonesian Construction Industry: Strengths, Weaknesses, and Influential Demographic Characteristics

The Indonesian construction industry is a significant contributor to economic growth in Indonesia. However, poor safety performance limits its contributions due to the negative impacts of poor safety on project performance. This research aims to assess the level of the safety climate in the Indonesian construction industry, identify its strengths and weaknesses, and understand the influence of individual demographic characteristics on the safety climate. Data were collected using a questionnaire survey from 1757 respondents working in six large state-owned construction companies in Indonesia. Results indicate that the overall safety climate level is fairly good. However, the safety climate scores of individual safety climate items are observed to vary widely. The scores reveal that construction employees understand the importance of safety and management demonstrates a degree of safety commitment, particularly by having regular safety communications. In contrast, the implementation of safety is limited in reality because safety is not considered a priority at work. Lack of safety resources and limited enforcement of safety rules further hinder the implementation of safety at the project level. Large state-owned construction companies such as those where data were collected should take the lead in changing the work practices in the Indonesian construction industry to improve safety performance. Level of education, length of work experience, position, permanency of job status, work location (project or office-based), and type of project are individual demographic characteristics that influence the level of the safety climate. Understanding the influence of these characteristics on the safety climate allows specific intervention strategies to be used to improve safety.

The Technology Landscape of Construction Material in The Indonesian Construction Industry

The Indonesian construction industry is one of the main sectors to support the economic growth in the country. According to a report published by the World Economic Forum, the construction industry currently accounts for about 6% of the world’s GDP. It is expected to reach around 14.7% by 2030. However, on the other hand, the image experienced by the construction sector is dominated by something low-tech, still relying on craft-based methods, characterized by poor performance and low quality. Therefore, it is essential that to better support the nation’s development, it is necessary for the Indonesian construction industry to invest more in the adoption, development, and application of technology. Material technology plays an essential role in construction projects. Based on a survey conducted to 40 Indonesian contractors, it was found that the priority of using concrete and steel materials ranked at the top during normal conditions and the covid-19 pandemic. Therefore, data about the history of development, utilization, and potential of construction technology, especially concrete and steel materials in Indonesia, is almost non-existent. This study aims to present the technological landscape of concrete and steel construction material, providing an overall view of the historical development of the utilization, contribution, and strategy for developing future construction material technology in Indonesia. In contrast, the information data is considered essential to help formulate policies regarding developing and utilizing construction technology in Indonesia. Therefore, this study will map the landscape of technology material in Indonesia. The methodology to be used is literature studies, interviews, and questionnaires.

Barriers to sustainable practices in the Indonesian construction industry

The adoption of sustainable practices is essential to mitigating negative impacts associated with the global construction industry. This study investigates barriers inhibiting the transition to sustainable practices in the Indonesian construction industry. Using a questionnaire as a means of data collection, relevant data were analyzed using reliability and exploratory factor analysis. Based on the analysis, the findings suggest that there were eight underlying factors responsible for the poor awareness of sustainability and the current low level of sustainable construction practices in the Indonesian construction industry. The three most significant barriers toward sustainable practices in Indonesia are lack of knowledge and standards, poor design practices, and financial constraints. The sustainable standards practice in Indonesia is still in its infancy and immature compared to developed countries. The findings of this study are expected to provide guidance and knowledge to construction players related to barriers in sustainability practices within the Indonesian construction industry.

Investigating Current Practice on Disincentive Programmes in the Indonesian Construction Industry

Much attention has been paid to practices and methods for improving the safety management of construction projects using an incentive approach, but limited studies that focus on the disincentive programme have been found, particularly in developing countries such as Indonesia. This study aims to present the findings of current practice on the disincentive programme by considering the perceptions of Indonesian construction stakeholders. In this study, a mixed-method approach through a semi-structured interview with stakeholders in the construction industry such as academics, associations and professionals, private and state-owned enterprise contractors is used. This article proposes that a penalty in terms of the cost and duration of the suspension should be enforced while strategies for alleviating increased injuries may include training, regular communication, socialisation, education, repetitive briefing and continuous supervision. It also indicates that laws and safety policies need to consider the costs suffered by personnel, families, and the ability of both small and large companies to manage such a disincentive programme.

Empowering female students to be successful professionals in the construction industry

The aim of this research is to empower female students who are studying construction related disciplines to be successful professionals in the Indonesian construction industry. The women’s empowerment is in line with the Indonesian Government’s long-term national development plan year 2005-2025. This research also contributes to improving the skills shortage in the Indonesian construction industry which has the biggest market share in Southeast Asia. This qualitative research employs semi-structured interviews with two groups of informants: female students in construction related disciplines and female leaders in the construction industry. A thematic analysis was then carried out to capture their key insights on factors that can empower female students and career success factors for women in the construction industry. The research findings contribute to advancing women’ empowerment principles, originally proposed by the UN Women Report (2018), by proposing four powerful principles to empower female students to be successful professionals in the Indonesian construction industry.

VALUE ENGINEERING FLY ASH OPTIMU ANALYSIS VALUE ENGINEERING FLY ASH OPTIMUM FOR MASS CONCRETE

Big budget for mass concrete raft foundation volume 24,603 m3, fc35 MPa, wctitious ratio 0,4, fly ash 15%, fresh concrete 320C, concrete using ice water. The purpose of this study, to find alternative concrete, by analyzing the Value Engineering analysis of the optimum fly ash, it is expected that the cost of concrete is more economical, with quality still achieved. The research was carried out with the research concept of comparing the above concrete with an alternative concrete optimum fly ash, with stage on stages of information, stages of functional analysis, stages of creative, evaluation stage, recommendation stage, implementation stage, the research alternative began on concrete designs, conducting experiments, analyzing fresh concrete, analyzing peak temperatures, analyzing strength and analyzing costs.The results of fly ash concrete 35%, compressive strength achieved fc 35 MPa, the cost was more efficient 12.69% than the initial cost of Rp. 24,233,955,000.00 Concrete fly ash 35% could be used as alternative. Regarding the application of value engineering, it is influenced by knowledge of value engineering and practices of it from decision holders and the absence of conflicts, of interest, of certain parties in the Indonesian construction industry.

FUZZY GREEN CONSTRUCTION FOR MEASURING ENVIRONMENTAL PERFORMANCES OF CONSTRUCTION PROJECTS

In the last three decades the Indonesian construction industry has gradually answered to demands for more environmentally responsible industry, where sustainability initiative has evolved from sharing idea amongst academia and professionals to real on-field implementation of green concept. While the application of the concept of green buildings has become a common practice in the building and housing sector, efforts to expand the application of green principles and sustainability to also cover the stages of the construction process only proceed slowly. One challenge is the lack of understanding from construction practitioners and project owners about the benefits of the green process, which is caused by the unavailability of metrics to assess the performance of green measures in construction projects. Such condition makes it difficult for the construction industry to promote the idea of green construction. This paper will discuss the development of instrument to measure the environmental impact of construction process in building construction process. This instrument is arranged in the form of a hierarchical structural system that addresses seven environmental aspects of construction work, that adopts fuzzy concepts to better accommodate human subjective assessments of resource use and other practical aspects of construction during the construction implementation process.

Factors of Safety Culture and their Implication to Job Satisfaction in the Construction Industry

Objective - Human Resources Management has a significant role in a construction company. Also, a professional or competitive workforce facilitates a construction project, which has a high level of risk. Therefore, a well-developed work safety culture is required for risk management. This study determines the factors that influence Safety Culture, which is limited to leadership, communication, competence, and work environment, as well as their influence on job satisfaction in the Indonesian construction industry. Methodology/Technique - A Total of 392 valid respondents out of 400 who answered the questionnaire were construction workers with one-year experience or more. Furthermore, the data were tested for validity and reliability using SPSS 25.0, and the hypothesis model was analyzed using the Amos 23.0 Structural Equation Model (SEM). Findings - Statistical data showed leadership, competence, and the work environment are critical factors that affect safety culture, while communication does not. Also, work safety culture has a significant effect on job satisfaction level in the construction industry. Novelty - Therefore, it is recommended to build a safety culture that pays attention to leadership, competence, as well as work environment, which have implications for job satisfaction. Type of Paper - Empirical. Keywords: Safety Culture; Job Satisfaction; Construction Industry; SPSS; SEM Amos JEL Classification: J28, J29. URI: http://gatrenterprise.com/GATRJournals/GJBSSR/vol9.2_7.html DOI: https://doi.org/10.35609/gjbssr.2021.9.2(7) Pages 174 – 181

A motivational framework for women to work in the construction industry: An Indonesian case study

The poor level of women’s participation in the construction industry has been a concern for many years. In fact, women represent less than 3% of the total workers in the Indonesian construction industry. On the other hand, the industry is experiencing a worker shortage causing it to innovatively attract construction workers by increasing women’s participation in the industry. Thus, this paper aims to understand the motivating factors for women to work in the construction industry. It adopts multi-sequence research techniques including integrative literature review, expert interviews and questionnaire surveys to collect data for the study. The data was then analysed using relative importance index and factor analysis. The findings were discussed and synthesised to develop a motivational framework for women to work in the construction industry. While this framework was developed based on the Indonesian context, it can serve as a theoretical foundation for further research regarding women’s participation in the construction industry.

Understanding the barriers to women’s career in construction industry: Indonesian perspective

Women’s involvement in the Indonesian construction industry is considerably low accounting for less than 3% of the total workers. Construction as a male-dominated industry becomes a barrier for women to join the workforce. The increase in the need for workforces is proportional to the growth in construction development. The needs cannot only be provided by male workers. Women's participation in the construction industry will contribute to the shortage of human capital demand. The aim of this research is to find the factors that impede women to pursue their careers in the construction industry. 21 factors are gathered from an extensive literature review. After conducting expert interviews, the factors are developed into a questionnaire and distributed to women who are already in the workforce. The analysis based on the Relative Important Index shows that the most influential barrier to women in construction is the lack of worksite security. The factor analysis found five critical barriers to women’s careers in the construction industry. Developing these barriers to a framework gives a broader perspective about the sources of each critical barrier. Internal as well as external elements including worksite, organization, and the industry itself have been the cause that prevents women to pursue their careers in the construction industry.

HUMAN FACTORS ANALYSIS AND CLASSIFICATION SYSTEM (HFACS) MODEL IN ANALYZING CONSTRUCTION ACCIDENTS

Industrialization development, which is being implemented in some areas, is increasing rapidly. There are over one hundred thousand construction companies in Indonesia. Thus, the risk of accidents in the construction field is also likely to increase. Moreover, Indonesia is one of the countries with the highest construction accidents according to ASEAN's accident rate. This will cost a significant loss. The Indonesian construction industry should conduct a more in-depth investigation into the problem so that improvements would significantly decrease the accident rate. This research aims to obtain the first modification of HFACS models to be implemented in the companies. Thus, it is expected that there is a correction to the dominant factor. HFACS model is an accident investigation method based on the human error factor. This research is generally divided into three steps. There are preliminary, data collecting, then conclusion and recommendation. Based on the explanation above, it is obtained that the development of the HFACS model is by adding the level of an external factor, which obtained 1,2% in the construction industry. Through the recommendation based on the result of this research, be expected that construction companies in Indonesia could make continuous improvements to reduce the accident

A Safety Climate Framework for Improving Health and Safety in the Indonesian Construction Industry.

The Indonesian construction industry is the second largest in Asia and accounts for over 30% of all occupational injuries in the country. Despite the size of the industry, there is a lack of safety research in this context. This research, therefore, aims to assess safety climate and develop a framework to improve safety in the Indonesian construction industry. Quantitative and qualitative data were collected from 311 construction workers. The results show a moderately healthy safety climate but reflect numerous problems, particularly around perceived conflicts between production and safety logics, cost trade-offs being made against other competing project priorities, poor safety communication, poor working conditions, acceptance of poor safety as the norm, poor reporting and monitoring practices, poor training and a risky and unsupportive working environment which prevents workers from operating safely. Two new safety climate paradoxes are also revealed: contradictions between management communications and management practices; contradictions between worker concern for safety and their low sense of personal accountability and empowerment for acting to reduce these risks. A low locus of control over safety is also identified as a significant problem which is related to prevailing Indonesian cultural norms and poor safety policy implementation and potential conflicts between formal and informal safety norms, practices and procedures. Drawing on these findings, a new integrated framework of safety climate is presented to improve safety performance in the Indonesian construction industry.

Adoption and implementation of building information modeling (BIM) by the government in the Indonesian construction industry

Building Information Modeling (BIM) is the development of concepts of collaboration and integration in the construction industry. This concept was introduced in Indonesia formally by the Ministry of Public Works and Public Housing (PUPR) in 2017. Since its introduction, by the Indonesian government the PUPR ministry has made BIM Roadmap, created BIM Team PUPR, and issued ministerial regulations mandating the use of BIM on a state-owned building. BIM provides many benefits that can be utilized by every stakeholder involved in the project. Previous research has focused more on the readiness of the Indonesian construction industry in utilizing BIM. However, studies that focus on the implementation of BIM by the Indonesian government are still very limited. A literature review is used as the main method in this journal to collect information from government publications. This study provides updated information related to government efforts to implement BIM in Indonesia.

Analysis of NATM tunneling method using CYCLONE modeling and simulation tools

The NATM or New Austrian Tunneling Method became a popular method for tunneling in Indonesia recently, since at least two strategic and huge construction projects utilized it. It is considered as a new method introduced to the Indonesian construction industry and therefore it is interesting to be studied and anticipated for the implementation. This paper discusses modeling the operation of the NATM and then simulation of the model for finding the productivity, effectiveness, and problems that may come in the implementation. The CYCLONE modeling and three simulation tools, i.e., WebCYCLONE, COST, and Symphony.Net, were utilized for this purpose. Data used for durations of tasks associated with the method were gathered from previous work in the field of different projects and literature. The results of this analysis then compared to other similar analyses but for a different project. A comparison of those two analyses was used to identify the most important tasks that will determine the performance of the method with a safety-first requirement in mind. The sensitivity analysis identified secondary resources such as a concrete wet sprayer; the shotcrete team and the formwork team are considered sensitive to improve the performance of the NATM.

The Relationship of Knowledge Codification towards Organizational Performance in Indonesian Construction Industry

The construction industry, as one of the project-based industries, is still considered as a one-off. Knowledge is often not codified and gone in the next project. Project complexity also brings a more significant challenge to the successful performance of the construction industry. This study examined how codification might affect organizational performance in the construction industry and how project complexity affects their relationship. Findings from 54 construction firms in Indonesia indicated that, as separate independent variables, codification and project complexity brought a positive influence on organizational performance. However, as a moderator variable, project complexity may bring a negative impact on the relationship between codification and organizational performance. There were two clusters formed from cluster analysis, which indicated respondents’ different levels of codification implementation.