Indonesian State-Owned Enterprises Research Articles

Antecedents of organizational citizenship behavior of marketing and supply chain employees

A marketing career entails a heavy burden and requires much originality and creativity, which can result in interpersonal friction. This situation influences employees’ affective commitment and organizational citizenship behavior (OCB). Consequently, the purpose of this study is to investigate how affective commitment, work overload, and interpersonal conflict may impact OCB when combined with social interaction. This survey involved 61 personnel from the marketing and supply chain departments of an Indonesian state-owned enterprise. The data were analyzed using a quantitative method and partial least squares (PLS) approach. This study revealed that work overload and interpersonal conflict have a negative impact on positive behavior and actions, including OCB and affective commitment. In addition, the findings accentuate the importance of employees’ affective commitment because it directly encourages employees to take on extra responsibilities. Furthermore, social interaction does not moderate the relationship between work overload and interpersonal conflict on affective commitment. This study broadened perspectives on OCB concerning work-related stressors and provided direction for the managerial team to cope with workload and conflict in the decision-making process.

Development of Risk-Based State-Owned Enterprises Performance Audit Framework to Enhance Company Value

In the face of fierce economic competition among State Owned Enterprises (SOE), encouraging each company to grow its corporate value through the development of a risk-based performance audit framework may be the best option for SOEs in Indonesia. SOE management can make ongoing improvements and respond rapidly to market changes by detecting company performance risks. The purpose of this research is to develop an SOE risk-based performance audit framework in order to increase company value. The Analytical Hierarchy Process (AHP) method was utilized to create an effective and efficient performance audit framework based on expert justification. The study's findings indicate that the Supreme Audit Institution (BPK) strategy’s main priorities for the construction of the SOE risk-based performance audit framework include three important aspects: 1) synergy between BPK audits and SOE risk management and risk assessment by SOE internal auditors; 2) development and improvement of SOE risk management quality, and 3) effective risk assessment by SOE internal auditors. This strategy is supported by various major variables, including SOE risk management, risk assessment by SOE internal auditors, BPK audit scope, BPK audit standards, BPK audit guidelines, and BPK auditor competencies.

The Effect of the Audit Committee on the Firm Value of State-Owned Enterprises in Indonesia: The Mediation Role of Financial Performance

The Effect of the Audit Committee on the Firm Value of State-Owned Enterprises in Indonesia: The Mediation Role of Financial Performance

Financial Distress and the Commitment to Promoting Innovation in State-Owned Enterprises: A Critical Perspective

Financial distress in State-Owned Enterprises (SOEs) has been a problematic issue for a long time. By 2020, the total debt of SOEs in Indonesia reach 1.682 trillion Rupiahs, whereas 68% out of all SOEs that receive state capital injections are facing bankruptcy. However, a more critical perspective still needs to investigate how commitment to promoting innovation relates to financial distress in SOEs. The existing studies of financial distress in SOEs have mainly focused on analyzing technical and structural factors and the predictive models using company financial indicators. This study aims to analyze the financial distress and innovation in SOEs critically. This study uses official data of PT Krakatau Steel from 2015-2020 and employs the combined analysis method. Quantitative regression analysis analyzes the company's financial distress throughout the period. In contrast, qualitative content analysis analyzes the relevance of the company's innovation commitment in the same period. The study shows that apart from ineffective capital structure decisions, low commitment to innovation is an important factor influencing financial distress in SOEs. The prospect of restructuring as a short-term strategy is also discussed.

Fraud Hexagon: Detection of Fraud of Financial Report in State-owned Enterprises in Indonesia

This study aims to identify the potential for fraudulent financial reporting using the Fraud Hexagon approach with pressure, capability, collusion, opportunity, rationalization, and ego indicators. The population in this study is state-owned companies with observations for 12 years, from 2010 to 2021, and uses regression analysis with SPSS tools to test the Hypothesis. The results showed that pressure and ego could detect the potential for fraudulent financial reporting. There is a tendency for management to report conditions that are different from the actual conditions when under pressure in the form of performance targets that are not supported by the resources they have. CEO duality also provides an excellent opportunity for fraudulent financial reporting practices because when there is a position war, there is no cross-check between departments, so other parts cannot detect the potential fraud committed by the CEO. This condition also indicates weak control processes that provide wider opportunities for fraudulent financial reporting. At the same time, variables of ability, collusion, opportunity, and rationalization cannot detect financial statement fraud. This condition is because state-owned companies are required to implement the Minister of Finance Regulation number PER-11/MBU/07/2021 and the Financial Services Authority number 13/POJK.03/2017 as the basis for the implementation of Good Corporate Governance so that it is possible to commit financial reporting fraud very small.

Tax Avoidance and Dividend Policy: Evidence from Indonesian State-Owned Enterprises

This study aimed to investigate the relationship between tax avoidance and dividend policy with focus on state-owned enterprises (SOEs), in Indonesia. The populations are all Indonesian firms (SOEs and non-SOEs) listed in LQ-45 index. Samples were selected using purposive sampling method. Number of collected samples are 60 firms or 118 firm-year observations (2018, 2019, and 2021). Using Moderated Regression Analysis (MRA), this study found a positive association between effective tax rate and dividend yield for non-SOEs. The result also reveals that SOEs tend not to engage in aggressive tax avoidance, with an average effective tax rate of 19.9%. Therefore, if SOEs plan to manage their taxes to lower the effective tax rate, they may provide higher yield to shareholders compared to non-SOEs.

Increasing Investment Effectiveness In State-Owned Companies In Indonesia By Implementing Measurable And Careful Risk Management

State-owned enterprises' (SOEs) performance is currently under increasing pressure. SOEs are businesses that the government controls, at least with a majority stake, in particular fields that typically concern public interests. The purpose of this study is to investigate how investment efficiency in Indonesian state-owned enterprises is affected by the implementation of precise and measurable risk management. The information utilized is board information from 25 non-monetary SOEs recorded on the Indonesia Stock Trade during the 2013-2018 period. The panel regression method is used for testing, and it was found that the joint implementation of risk management has a significant impact on investment efficiency. Linear regression is used in this study's quantitative research approach. Financial reports from non-financial SOEs that were listed on the Indonesia Stock Exchange between 2013 and 2018 were used as the data. The processed data from this study indicate that the implementation of risk management in non-financial SOEs in Indonesia between 2013 and 2018 has a significant impact on investment efficiency. The commitment to execute SOE risk the executives requires the board to deal with having choices to channel business decisions put forth to stay away from unprofitable attempts

Strategies for retaining customers: How PT ABC can maintain its position as the laboratory of choice

PT ABC (alias name), an Indonesian state-owned enterprise, offers inspection, testing, certification, and consultancy services. Being a well-established company, PT ABC encounters challenges in a highly competitive global market. To stay competitive and foster growth, PT ABC must develop new services, expand its international presence, and embrace new technologies. Additionally, diversifying revenue streams by entering new markets and establishing partnerships with other companies can prove advantageous. However, implementing these changes necessitates a well-designed change management process that involves effective communication, strong leadership, and meticulous planning and execution. By successfully implementing a change management process, PT ABC can sustain its competitiveness, deliver high-quality services to its customers, and expand its market reach and revenue streams.

Conditions, Challenges and Prospects of State-owned Enterprises in Indonesia: The Governance Perspective Based on Economic Constitution

Conditions, Challenges and Prospects of State-owned Enterprises in Indonesia: The Governance Perspective Based on Economic Constitution

The Effort of State and Non-State Actors in Ensuring Access to Primary and Secondary Education for Indonesian Citizens in Singapore

Singapore’s Ministry of Education (MOE) policy in the Singapore local schools admission that places international students as the last priority after Singapore citizens and Permanent Residents, coupled with the expensive school fees for international students are the main problems in accessing primary and secondary education faced by Indonesian citizens in Singapore. Efforts from various parties are needed to ensure the fulfillment of access to primary and secondary education for Indonesian Citizens in Singapore. This research explores state and non-state actors' efforts to ensure access to primary and secondary education for Indonesian citizens in Singapore. Data collection was obtained through interviews and a literature review. This research shows that multi-track diplomacy is established between state actors consisting of the Indonesian Embassy in Singapore and Indonesian State-Owned Enterprises as representative of track 1, and non-state actors consist of professionals (track 2), entrepreneurs (track 3), and college students (track 5). The multi-track diplomacy is reflected in the establishment of Sekolah Indonesia (Singapura) Ltd. and Pusat Kegiatan Belajar Masyarakat (PKBM) KBRI Singapura. The multi-track diplomacy is established because of shared values of humanitarianism. The collaboration of multi-track diplomacy and the spirit of humanitarianism has received positive responses from Singapore Government agencies and educational institutions, which aim to improve the quality of education at Sekolah Indonesia (Singapura) Ltd. and PKBM KBRI Singapura.

Strategies for retaining customers: How PT ABC can maintain its position as the laboratory of choice

PT ABC (alias name), an Indonesian state-owned enterprise, offers inspection, testing, certification, and consultancy services. Being a well-established company, PT ABC encounters challenges in a highly competitive global market. To stay competitive and foster growth, PT ABC must develop new services, expand its international presence, and embrace new technologies. Additionally, diversifying revenue streams by entering new markets and establishing partnerships with other companies can prove advantageous. However, implementing these changes necessitates a well-designed change management process that involves effective communication, strong leadership, and meticulous planning and execution. By successfully implementing a change management process, PT ABC can sustain its competitiveness, deliver high-quality services to its customers, and expand its market reach and revenue streams.

The Effect of Foreign Debt, Liquidity, Firm Size, and Exchange Rate on Hedging Decision

Introduction/Main Objectives: This research aims to analyze the effect of internal factors, especially foreign debt, liquidity, and firm size, and also external factors, especially the exchange rate, on hedging decisions, with profitability as the control variable. Background Problems: Exchange rates are always affected by uncertainty. To ensure a company does not suffer losses, it will implement risk management, such as hedging. This is in accordance with the recommendation of the Ministry of SOEs to undertake hedging in the context of risk management. But in reality, not all state-owned enterprises do this. Novelty: This research adds profitability as a control variable, because this research does not involve the profit of the company, and focuses on how the company minimizes the risk of potential losses. Research Methods: The research used quantitative data, which is secondary data taken from the annual financial reports of state-owned enterprises listed on the Indonesia Stock Exchange for the 2016 to 2020 period that are accessed through the website www.idx.co.id and the annual reports of state-owned enterprises that are accessed through their official websites. Data analysis techniques that were used are descriptive statistics test, multicollinearity test, and logistic regression test. Finding/Results: The results show a significant effect from foreign debt and firm size on the hedging decisions of state-owned enterprises in Indonesia, while liquidity and the exchange rate did not show a significant effect on the hedging decisions of state-owned enterprises in Indonesia. Conclusion: This research shows that state-owned enterprises in Indonesia focus more on their foreign debt and firm size, than their liquidity or the exchange rate,in their decision to hedge.

Value chain in the relationship of intellectual capital and firm’s performance

State-Owned Enterprises (SOEs) are companies whose majority shares are owned by the government. The prime focus of this paper, determine the impact of intellectual capital in State-Owned Enterprises (SOEs) on firm performance using the value chain as a mediating variable. This research methodology begins with selecting of respondents; respondents in this study were 207 general managers and directors from 69 Indonesian State-Owned Enterprises. The data used in this study’s analysis came from questionnaires filled out by respondents. Structural Equation Modelling is a tool for data analysis. The study’s key findings are statistical tests that show intellectual capital directly impact the value chain and firm performance. Research contribution to raise awareness of intellectual capital, relationships, and the value chain among stakeholders in state-owned enterprises. This finding indicates that SOEs have improved the value chain and firm performance through useful resource management. Furthermore, through mandatory company regulations, this study contributes formulating company policies, particularly internal performance regulations.

Measurement of Capability Level Using Cobit 5 Framework (Case Study PT Permodalan Nasional Madani)

The development of information technology brings every company to take advantage of the technology they have. The utilization of information technology must be supported by good information technology governance. PT Permodalan Nasional Madani (PNM) is an Indonesian State-Owned Enterprise (BUMN) that is engaged in financial services. PT Permodalan Nasional Madani aims to assist the development of micro, small, medium, and cooperative enterprises. PT Permodalan Nasional Madani uses the PNM Digi application system in running the company. With the existing problems, PT Permodalan Nasional Madani needs to evaluate its IT governance by conducting an information technology audit. In conducting the audit, a framework is needed, namely COBIT 5 to measure the level of capability possessed by the company. This audit is carried out using the information technology audit stages that focus on 4 to 5 COBIT 5 processes that are priority improvements. The results of this audit will be in the form of an audit report containing findings, measurement results of capabilities, impacts if not corrected, level of gaps, and recommendations for improvement to recommendations for increasing levels for PT Permodalan Nasional Madani.

PERFORMANCE IN SOE TWO TIERS BOARD SYSTEM BASED ON THE IMPLICATION FROM GOOD CORPORATE GOVERNANCE AND TUNNELING OR PROPPING THROUGH RELATED PARTY TRANSACTIONS

This study is to provide empirical evidence about the performance of State-Owned Enterprises in Indonesia with a two-tier board system, on the effect of GCG and tunneling or propping through related transactions. This research uses data in the form of annual reports of State-Owned Enterprises. The results of this study showed that 69% were showing related transactions indicated tunneling and 31% showed related transactions indicated propping. Furthermore, the results obtained that the performance was simultaneously affected by GCG and tunneling. Partially GCG has a positive effect on performance, while tunneling or propping does not affect. The limitation of this research is that there are only 22 state-owned companies whose shares are partly owned by the public, during 2014-2019. The implication is that SOE need to continue to improve GCG to improve SOE’s performance, so that the possibility of tunneling which is a form of detrimental control can be minimized. This study shows that tunneling in state-owned companies is not in the form of taking cash or assets, but taking profits through control, coercion, and regulation. This study uses the performance measure based on the Malcolm Baldridge criteria.

Analyzing Indonesian SOEs Privatization: A Comparison between the SOEs’ Performance and Privatization Determination

This study investigates the privatization situation in Indonesia between 1996 and 2020. This study conducts a comparative analysis to see the impact of privatization on companies’ performance and, with regard to the crisis that occurred with respect to the companies that have been privatized, its economic impact. Furthermore, the determinants of the government’s decision to release its share from state-owned companies are also identified using the regression method. This study found, with regard to the state-owned enterprises in Indonesia, the impact of the economy as there were no differences in the companies’ performance before and during the crisis. This study found that the ability of the company to generate profits declined after privatization, but the company’s efficiency improved. Otherwise, the debt ratio of state-owned companies decreased after the privatization was carried out. Almost the same results were found when comparing the long-term performance with the short-term performance of the privatized SOEs. The determining factors that influenced the Indonesian government’s decision to divest its shares in state-owned companies were Indonesia’s corruption perception index ranking, the company’s ability to generate profits on its sales, and government ownership percentage stock in SOEs.

The Influence of Financial Decisions on the Value of the Indonesian Railroad Services Company Persero Bandung

PT. Kereta Api Indonesia on increasing company value during 2019-2021. and (b) to determine the effect of the implementation of the funding policy implemented by the management of PT. Kereta Api Indonesia on increasing company value during 2019-2021. The objects studied in this study are companies engaged in the transportation services sector for Indonesian Railways services. PT. Kereta Api Indonesia is an Indonesian state-owned enterprise that provides rail transportation services. PT services The data source for this research is secondary data. Secondary data is data taken in the form of data that has been processed in the form of reports that have been prepared by competent agencies or institutions in the form of reports, books or written materials related to the topic to be studied. The results of this research, namely the results of this study, can be concluded that: (a) Pricing Earning Share, Debt to Equity Ratio and Dividend Pay Out Ratio have no significant effect on firm value. (b) The hypothesis says that the Pricing Earning Share, Debt to Equity Ratio and Dividend Pay Out Ratio have no significant effect on the value of the rejected company; (c) Variations in book value per share, large capital to guarantee debt and dividend distribution policies do not affect how much the value of PT. Kereta Api Indonesia through Price to Book Value (PBV).

Co-Movement of Indonesian State-Owned Enterprise Stocks

According to portfolio theory, diversifying investment to several stocks with negative correlations may reduce portfolio risk. In contrast, combining stocks with similar movement (co-movement) has no impact on portfolio risk reduction. This study aims to examine state-owned enterprise stock co-movement in Indonesia using orthogonal generalized auto-regressive conditional heteroscedasticity (O-GARCH) to help investors selectively choose stocks in a portfolio to reduce portfolio risks. Saturation sampling was used since all state-owned enterprise stocks listed on the Indonesian Stock Exchange were selected as samples. Based on monthly data from January 2013 to December 2021, the O-GARCH method was able to simplify the covariance matrix of the 17 SOEs. Of 17 SOEs, 11 had co-movement, as indicated by their similar principal components, whereas the remaining 6 stocks had a different principal component. Hence, investment managers or investors should not put the eleven stocks in the same portfolio as they have similar risk factors; instead, they may combine them with the six remaining SOE stocks which have a different co-movement. In addition, when the fiscal deficit is high and unconventional monetary policy is implemented in a crisis period, the SOE stock co-movement is higher. Thus, the SOE stock co-movement also depends on government-related matters and faces slightly different risks compared to its private-sector counterparts. Hence, the regulators formulating the policy on SOE stock holdings may use the results of this study by considering the potential merging of the SOE stocks with a similar stock return co-movement by taking account the timing in relation to fiscal deficit and crisis period.

Preliminary Study of Solar Energy Utilization for Rural Electrical Energy. Case Studies in Central Kalimantan

Indonesia gradually improves the electricity system's reliability and reaches the areas which contain frontier, outermost and underdeveloped areas by utilizing local energy potential. It can be done independently and in groups to meet the need for electrical energy in remote villages. Electrical power is obtained from generators and solar modules installed in each resident's house, where the capacity and quality are minimal. The initial study was completed in 2019 and took place in Central Kalimantan province, divided into three districts consisting of ten villages. Access to the village is a challenge in satisfying electrical energy needs, so alternatives are needed to meet the demands of electrical energy for areas that are difficult to reach by the electricity network. The solar power plant is one alternative to using new and renewable energy. The State Electric Company is an Indonesian state-owned enterprise that generates, transmits, and distributes electric power which also responsible to provide the electricity network in Indonesia. This study's village information was obtained from the survey results, village energy needs, and costs incurred when the solar power system was installed.

State-Owned Enterprise’s Debt in the State Financial Regime

Several Indonesian State-Owned Enterprises (SOEs) have had very high debts recently. Several reasons, such as government assignment projects, the impact of the Covid-19 pandemic, and corrupt management behaviour, have caused the increase in liability. There is a fierce debate among academics and legal scholars regarding whether the SOE’s debt is state debt. A state company is an independent legal entity separate from the state and obtains capital from separated state assets. Besides, the state, as the majority shareholder, assigns SOEs to projects that support government programs even though they are not profitable. In addition, several SOEs often receive State Equity Participation to survive bankruptcy caused by running out of capital or large debts. This paper will analyse the country's debt status from the perspective of public finance by taking the case of Indonesia. Moreover, it will explore the theoretical and empirical aspects of SOE’s debt from a state finance point of view. This study will use doctrinal legal research to interrogate the law as it is and should be. Although this research concludes that SOEs' finances are a state financial regime, the supervision of SOEs is not Government Judgment Rules but Business Judgment Rules. SOE's debt is the responsibility of SOE as a corporate legal entity. In the case of Indonesia, the government often rescues SOEs that have failed to pay their debts through State Equity Participation and/or privatisation while maintaining most state ownership shares, for instance, Garuda Indonesia, a national airline. Finally, state accountability for SOE's debt only occurs indirectly because of the financial separation between the state and companies. The Indonesian government saved Garuda Indonesia's finances to protect national assets and continue to control vital businesses. However, the state must also reform the management of SOEs so as not to harm state finances by upholding good corporate governance and preventing fraud and corruption.