Indonesian State-Owned Enterprises Research Articles

The Influence Of Corporate Resources And Corporate Strategy To Improve Corporate Performance At Indonesian State Owned Enterprises

The existence of Indonesian state-owned enterprises (SOEs) has an important role for the communities’ welfare as it is mandated in the constitution. If traced based on its face value, the profit of Indonesian SOEs looks to continue increase steadily every year. However, on the other hand there is the biggest challenge, such as how to increase the value of company, which is shown by ROA and ROE that keep on declining. This actually means that it is still possible to get a higher profit. The objectives of this study are to get assessment regarding to (1) correlations of corporate resources with corporate strategy, and (2) whether corporate resources and corporate strategy are affecting corporate performance, partially or simultaneously, to the Indonesian SOEs. Units of analyzes were 101 corporations from four different industry sectors and the samples for this research are 50 corporations of Indonesian SOEs. Time horizon is cross-sectional, where the study was conducted at a single period of time simultaneously. Data was gathered by questionaires and in-depth interviews to SOEs directors and functional managers. Data analyzed were both descriptive and quantitative. Hypothesis testing was utilized by PLS model (Partial Least Square) 2.0 version. The finding shown that there are correlations between corporate resources and corporate strategy. Corporate resources and corporate strategy do affect corporate performance, directly or simultaneously. Moreover, corporate strategy have more influence than corporate resources. Directional strategy and organizational resources are the most dominant dimensions in affecting corporate performance of Indonesian SOEs. The conclusion from this research is that most of Indonesian SOEs are not capable in formulating their corporate strategy appropriately due to mismatching of their/incompatibility corporate resources. Key words: Corporate Resources, Corporate Strategy, and Corporate Performance.

Leadership Development Experiences of Women Leaders in State-Owned Enterprises in Indonesia

Similar to many other countries in the world, Indonesia has been experiencing the increasing number of women workers participation both in formal and informal sectors . While in formal sector the number of female employees has increased from around 10 millions in 2008 to nearly 13 millions in 2011 ; in informal sector the figure is even doubled: more than 28 millions in 2008 to more than 30 millions in 2011 . However to date, women workers are associated with low-skilled, low-wage workers who work in precarious working environment. Women are seldom hold managerial position both in public and private sector. The proportion of women in Indonesia who sit in the board of directors is only 6% from the entire women workers. Thus, this research aims to explore the ir development experience along the way . In order to obtain initial information, interviews with nine women managers from State-Owned E nterprises (SOEs) were conducted. SOEs were chosen for convenience reason . The research indicates the low ratio number of women in SOEs management team although there is an optimism that the number would increase. Key point discovered in this research is that development experience is mainly done by the participants own in i tiatives whereas organisational supports are found very limited . This findings will be further explored and confirmed by involving more women managers from various sectors. Keywords: women leaders, ledership development, qualitative, Indonesia. Normal 0 false false false IN X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:Table Normal; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:Calibri,sans-serif; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:Times New Roman; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:Times New Roman; mso-bidi-theme-font:minor-bidi;}

Transfer of Training in Indonesia State-Owned Entreprises to Face the Asean Economic Community 2015

The purpose of this paper is to provide an overview of the theoretical importance of transfer of training for State-owned Enterprises (SOEs) in Indonesia in order to face the ASEAN Economic Community 2015. This paper is a pre-research paper for the influence of transfer of training towards firm performance. It applied a library research with secondary data analyzing literature about transfer of training and Gagné’s five learned capabilities. The expected result was the existence of a specific training system for SOEs in Indonesia for there are very diverse areas of state-owned enterprises in Indonesia. The end goal is Indonesia State-Owned Enterprises have better competitiveness in global market.

The Effect of Board Characteristics and Audit Committee Existence on Earnings Quality of Indonesian State-Owned Enterprises

The objective of this research is to determine the effect of Board of Commissioners characteristics which is assessed by number or size of, level of independence of, and amount of remuneration received by the Board of Commissioners on earning’s quality of Indonesia’s State-Owned Enterprises (“SOE”). The objective of this research is also to determine whether the existence of Audit Comittee has significant effect on the earnings quality of the SOE. Hypotheses testing are done by using a multiple regression model with 111 sample of State-Owned Enterprises whose majority share is owned by the state during 2009 dan 2010. The results provide empirical evidence that independency of Board of Commissioners increases the SOE earnings quality, meanwhile the other Board characteristics and the existence of Audit Committee has no significant effect on the SOE earnings quality.

PENGARUH KEBIJAKAN DIVERSIFIKASI DAN KARAKTERISTIK PERUSAHAAN TERHADAP NILAI PERUSAHAAN BUMN JASA KONSTRUKSI

The aim of this study is to obtain the influence of diversification policy and firm’s characteristics to the construction state owned enterprises (SOEs) firm’s value. The firm’s characteristics on this study are based on firm size, growth opportunities, and agency costs on some construction state-owned enterprise in Indonesia. The analysis method used in this research was panel data regression. These results indicate that the value of the company was affected by the company characteristic and it diversification. The entire independent variables such as diversification, firm size, growth opportunities, and agency costs had a significant effect on firm value. Business diversification and agency costs had a negative impact on firm value. Firm size and growth opportunities had a positive effect on firm value.DOI: 10.15408/etk.v11i1.1869

The Impact of Governance Practices on the Operating Performance: A Study on the Indonesian State-Owned Enterprises

This study aims to investigate the corporate governance practices on State-Owned Enterprises (SOEs) and to find out their impacts on the operating performance of the firms. This study finds out the substantial improvements of the quality of corporate governance practices in public-listed Indonesian SOEs. Total corporate governance (CG) compliance score and each component score show an upward trend improvement. With regard to the relationship between CG compliance and operating performance, as represented by Return on Assets, Net Profit Margin, and Assets Turnover, this study finds out that there is a direct relationship between the governance quality and operating performance. This positive relationship is cpused by the reduction of the operating cost and not coused by the increase of sales or the better use of assets. DOI : https://doi.org/10.21632/irjbs.5.1.35-55 Keywords: Corporate Governance,Operating Performance,SOEs,Indonesia

The Impact of Governance Practices on the Operating Performance: A Study on the Indonesian State-Owned Enterprises

This study aims to investigate the corporate governance practices on State-Owned Enterprises (SOEs) and to find out their impacts on the operating performance of the firms. This study finds out the substantial improvements of the quality of corporate governance practices in public-listed Indonesian SOEs. Total corporate governance (CG) compliance score and each component score show an upward trend improvement. With regard to the relationship between CG compliance and operating performance, as represented by Return on Assets, Net Profit Margin, and Assets Turnover, this study finds out that there is a direct relationship between the governance quality and operating performance. This positive relationship is cpused by the reduction of the operating cost and not coused by the increase of sales or the better use of assets.DOI :https://doi.org/10.21632/irjbs.5.1.35-55Keywords: Corporate Governance,Operating Performance,SOEs,Indonesia

Ownership structure, charaсteristic differences and the size of corporate board of commissioner: The case of Indonesia state-owned enterprises

This study scrutinises the association between ownership identity and board size in a unique institutional setting: state-owned enterprises in Indonesia, a country incorporating a two-tier management structure. It investigates whether the ownership identity explains the size of the board of commissioners by using the year 2006 data set from 155 SOEs in Indonesia consisting of 112 of fully SOEs and 43 of partially- privatised SOEs. This study hypothesizes that SOEs with a higher level of private sector ownership will have a greater incentive to monitor the performance of executive management through board of commissioners than those SOEs that are fully owned by the state government. It finds that compared to those fully SOEs, the partially-privatised SOEs are likely to have more board of commissioners. Even though this result is not statistically significant and, therefore, the proposed hypothesis is not statistically supported, the regression statistical analysis reveals that control variables assist in explaining the size of board of commissioners. The size of the board of directors as a control variable is significantly associated with the size of the board of commissioners. Other control variables including size of the SOE as well as the return on equity measure moderately explain the size of the board of commissioners. The findings give insight to stakeholders such as regulators or the private sector investors interested in making investment decisions in Indonesia considering the ownership structure and the effect on the effectiveness of the board of commissioners.

Privatization, organizational change and performance: evidence from Indonesia

PurposeThe purpose of this paper is to examine the relationship between privatization of state‐owned enterprises (SOEs), organizational change and performance. It explores the processes by which privatization affects corporate performance through the internal changes within organizations in a developing country context.Design/methodology/approachThe methodology involved the use of a survey questionnaire. Responses were obtained from 86 managers in 86 organizations, comprised of SOEs, privatized firms and private enterprises in Indonesia.FindingsCross‐sectional analysis shows that there had been a statistical significant difference across the types of ownership pertaining to organizational elements that were expected to change. The evidence suggested that privatization brought about important alignments among the organization's goals, design elements and resources and between the organization and its competitive environment.Practical implicationsThe implications of the study are discussed in relation to the organizational changes that take place in the transition from public to private sector ownership. The study contributes to our understanding about the relationship between ownership‐performance by providing an organizational change perspective on the examination of privatization‐performance effect.Originality/valueThe paper provides insights into how privatization processes alter the behavior, incentives and performance of formerly SOEs in Indonesia.

The effect of privatisation on performance of state‐owned‐enterprises in Indonesia

PurposeThe purpose of this paper is to investigate whether partially privatised state‐owned‐enterprises (SOEs) perform significantly better than fully SOEs in the developing country of Indonesia.Design/methodology/approachThis study uses a data set of 157 SOEs in Indonesia for the year 2006 to examine the issue of ownership structure and its performance.FindingsStatistical analysis supports the hypothesis that SOEs with private sector ownership have higher levels of performance than those fully owned by the government. There are also significant differences in financial leverage, firm size, assets‐in‐place, financial statement reliability, and industry variances between fully privatised and partially privatised SOEs.Originality/valueThese findings support the Indonesian Government move towards further privatisation in that SOEs with at least some private sector ownership have greater performance levels.

The transformation of human resource management in Indonesian state-owned enterprises since the Asian Crisis

Indonesia is facing a rapid institutional change arising from the 1997 Asian Crisis, and state-owned enterprises (SOEs) were forced to undertake a transformation to survive in the increasing market competition and to revive their roles as the engine of economic growth. This included measures to tackle the increasingly vital human-related issues, namely human resource management (HRM). This research focuses on the dynamic relationships between the SOEs and their internal and external stakeholders in the post-1997 Asian Crisis. It addresses three main issues. First is to investigate the change within the Indonesian institutions and the influence on the firms. Second is to examine the response of the firms as captured in their firms' transformation initiatives in the area of HRM. Third is to elaborate the implications for theory and practices regarding transitional economy in general and HRM changes in particular. The results indicate that the transformation of SOEs has been determined by the firms' relationships with both their internal and external stakeholders. Following the Asian Crisis, Indonesia witnesses a drastic change of the HR practices toward greater market orientation and the pervasiveness of ‘best practices’.

Commissioners' Attendance at Board Meeting: An Empirical Analysis of Indonesian State-Owned Enterprises

Indonesia applies two-tier system of board in which board is divided into supervising board (or board of commissioners) and executive board (or board of directors). In the context of Indonesian state-owned enterprises (SOE), there have been popular claims that commissioners are not serious enough in holding their seats due to their busyness or incapability to handle the jobs. This is eventually due to massive political intervention during the selection and appointment of commissioners of Indonesian SOE.This research aims to empirically test the popular claims. Using busyness hypothesis developed by Ferris et al. (2003), I argue that attendance rate of Board of Commissioners (BoC) at board meeting (both internal meeting and joint meeting) is lower than that of Board of Directors (BoD). I then analyze the explaining factors of BoC attendance rate, both at board-level and individual level.The empirical results show that BoC attendance rate at both board meeting is significantly lower than that of BoD. But only board size and age consistently have significant coefficient on regression analysis at board-level and individual level analysis.I conclude that the popular claims of Indonesian SOE BoC ineffectivess cannot be fully supported.(Note: This paper has been presented at 21st Asian Pacific Conference on International Accounting Issues, Las Vegas, Nevada, November 24-26.)

Corporate Governance in Indonesian State-Owned Enterprises: Is it on the Right Track?

This paper looks at the reformation of corporate governance Indonesia in the sector of state-owned enterprises, especially from the perspective of law. The focusing is to examine the voluntary and mandatory corporate governance models by comparing the prevailing corporate governance systems, pre-existing in several countries such as the US, Australia, Germany and Indonesia. The voluntary model means listed companies that might not abide by the principles but have to provide sufficient and reasonable arguments as to why it is not complying are protected against; while the latter is a model in which a listed company has to comply with the corporate governance code for avoiding penalties.The US employs the mandatory model; Australia, Germany and Indonesia apply the voluntary one.This paper suggests that the mandatory model is suitable to be implemented. The existing of corporate spivs and new hope of the Indonesian Corruption Eradication Commission are the article's central arguments to suggest employing the mandatory model.

Essays in Macroeconomic Policy: The Indonesian Experience

DOI: 10.1355/ae25-2i Essays in Macroeconomic Policy: The Experience. By Miranda S. Goeltom. Jakarta: Gramedia Pustaka Utama, 2007. Pp. 594. Indonesia, with a population of 230 million, has witnessed several milestones in its economic history. However, over the last twenty-five years, there are only a few textbooks that gave a complete picture of Indonesia's economic policies. Two of such books are published in other countries: (1) Bruce Glassburner, The Economy: Selected Readings (Cornell University Press, 1971) and (2) Anne Both and Peter McCawley, eds., The Economy During the Soeharto the Era (Kuala Lumpur: Oxford University Press, 1981). The latest book, Essays in Macroeconomic Policy: The Experience, is written by an academician and a policy-maker, Dr Miranda S. Goeltom. The book consists of twenty-seven chapters under seven major sections. Overall, the book analyses Indonesia's macroeconomic condition before and after the monetary crisis that struck Asia in 1997/98. The introduction part presents the basic concept of analysis, the development of macro economy before and after the crisis and gives an overview of the book. The second part discusses the framework of macroeconomic analysis using Indonesia as a case study, in order to facilitate the theoretical understanding of the book. This part consists of six chapters, which begin with the impact of globalization on the economy. The second part (Chapter 7) illustrates the importance of a healthy financial structure in an open economy that can support an effective fiscal policy in the globalized world. The third part, Chapters 8-13, explains the concept of monetary policy and the monetary condition prevalent at both domestic and international level. Chapter 8 discusses the situation at the beginning of the applied inflation targeting in the year 1999/2000. Chapter 9 analyses the IMF existence in Indonesia since the 1997 monetary crisis. The closing Chapter 13 discusses the transmission mechanism of monetary policy in Indonesia both before and after the crisis. The fourth part of the book consists of six chapters that explain the aspects of banking and financial sector in In this part, Chapter 14 discusses the experience in carrying out banking sector reform after the monetary crisis. Chapter 19 focuses on the emergence of microfinance industry in Next, the fifth part of the book consists of three chapters discussing the exchange rate system and the external sector of the economy. This part begins with Chapter 20 describing the role of exports in the new millennium. Chapter 21 discusses the role of monetary policy coordination by central banks in Asia. Chapter 22 is about the globalization of world's financial system and the capital flow in Further, the sixth part discusses the fiscal policy divided into two chapters, and Fiscal Reforms: The Experience of Indonesia 19801996 and Indonesian Foreign Debt Management. The seventh part is the capita selecta presented of three titles, namely Chapter 25, Indonesian State-Owned Enterprises in the Era of Globalization, Chapter 26, Public Policy Agenda and Women Role in Alleviating Poverty, and Chapter 27, Demographic Transition and Economic Growth Potential: The Case of Indonesia. One of the important conclusions that can be drawn from this book is the achievement of the macroeconomic management categorizing on the track, economic growth and controlled inflation. …

Indonesian State-Owned Enterprises: The Challenge of Reform

Indonesian Government has been struggling to find ways to manage its more than one hundred state-owned enterprises (SOEs). Only in his last administration did the New Order long-time leader Soeharto realize that there must be a concerted strategy to bring out the potential of the SOEs, long known only for being inefficient, mismanaged and cash cows for political groups and individuals. Democratization that came with the fall of Soeharto has brought pressure for reform of Indonesian SOEs. At the same time, however, democratization has also made the reform process difficult as more groups of stakeholders have a say in the process. Neoliberal doctrine perceives ownership of companies by the state as suboptimal, if not destructive to the companies' value. Therefore, privatization of SOEs is seen not only as a means of generating revenue for the state budget ? as that seems to be the primary aim of the Indonesian Government ? but also as putting SOEs under market discipline as the driver for efficiency. In many of the privatization processes in Indonesia, the role of foreign parties has been quite significant in acquiring SOEs' shares divested by the Indonesian Government. main reason is that after the 1997-98 financial crisis, not many big Indonesian businesses ? especially the conglomerates most severely hit by the crisis ? had the capital to acquire the divested shares. However, economic nationalism seems to be the dominant theme in Indonesia's response to globalization. Article 33 of Indonesia's 1945 Constitution states that Sectors of production that are important for the country and affect the life of the people shall be controlled by the State (sub-para. 2) and The land, the waters

Corporate governance in Indonesian state-owned enterprises: Feeding with western ingredients

Corporate frauds and failures in Indonesian have continued despite the corporate governance principles of Indonesia’s State-Owned Enterprises (SOEs) which have been strengthened following the Asian financial crisis of 1997/1998. This appears to indicate that corporate governance principles primarily adopted from developed Western nations are not adequate to address problems faced by SOEs in Indonesia. This primarily analytical paper evaluates the current corporate governance practices in Indonesian SOEs in light of the prevailing political and corporate culture. Given the complexity of Indonesia’s political and corporate culture the adoption of corporate governance principles from Western nations as promulgated by the OECD and/or the Cadbury report are inadequate to reduce corporate mismanagement and failure among SOEs. The study also utilizes some qualitative interview data from thirty respondents at managerial level within three SOEs to aid the assessment of corporate governance practices and principles in the Indonesian context