题目

The Effect of Organization Culture and Internal Control on Corporate Governance and its Impact on State Owned Enterprises Performance in Indonesia

刊名

Department of Accounting, Faculty of Economics, University of Muhammadiyah Sumatera Utara, Medan 20238, Indonesia;

来源数据库

Proceedings of The 7th Annual International Conference (AIC) Syiah Kuala University and The 6th International Conference on Multidisciplinary Research (ICMR) in conjunction with the International Conference on Electrical Engineering and Informatics (ICELTICs) 2017, October 18-20, 2017, Banda Aceh, Indonesia

原始语种摘要

This study measured four variables, namely, organizational culture, and internal control as exogenous variables as well as corporate governance and corporate performance as an endogenous variable. To collect data using survey techniques on state-owned companies in Indonesia. The population of this research is State-owned companies in Indonesia 119 SOEs either state-owned, opened state-owned, and Housing (perum). The samples of this research are 105 companies. The respondent of this research is all company managers of SOEs in Indonesias state-owned enterprises and state-owned company in Indonesia. The data were analyzed using Structural Equation Modeling with LISREL application. The results showed that there is significant influence of organizational culture on corporate governance, internal control of corporate governance, organizational culture on corporate performance, corporate governance influence on corporate performance. From the test direct effect has no significant effect of internal control to corporate performance. Corporate governance is an intervening variable relation between the internal control and corporate performance.

关键词

Keywords: organizational culture, internal control, corporate governance, corporate performance.

原始语种正文

节选

Introduction

State-owned Enterprises (BUMN) is a business entity partially or wholly owned by the Republic of Indonesia. Currently there are 119 State Owned Enterprises (SOEs) under the control of Ministry of SOEs (As of December 31, 2014). Indonesia is a country where the state role in the economy is relatively large. One of them, showed by the large number of SOEs, although until 2014, the number of SOEs has been decreasing or decrease to 20 SOEs compared to the end of 2013. The excessive role of state in the economic system, often considered led to various kinds of distortions that lead to inefficiencies. Therefore, there is a belief that one important step to enhance the competitiveness of enterprises is reducing state intervention in the economy, which in the context of ownership of the SOEs indicated by privatization. Therefore, what is more urgent to be addressed is actually the implementation of the governance of SOEs, which in turn will affect the performance of the company (Corporate performance). Many factors affect the performance of the company which is the development of the organizations, the compensation plan, the communication system, managerial style, organizational structure, policy and procedures. The factors affecting the performance of the company are the business environment factors, namely the external environment and internal environment. According to Syakhroza (2009), the problems faced by SOEs is the professionalism of human resources, organizational systems, organizational culture, good corporate governance, behavioral, organizational strategy, and payroll systems. A step that has to be taken by the state is doing repairs concerning structure, culture, and the organizations internal systems. Empowering the management of SOEs has to be a priority in order to be more responsive to changes in market environment. While at the macro level, concerning the existence of ministries of SOE as SOE policy body. Cultural organization grows easily in the organization. Despite strong to change, organizational culture can be made to further improve the performance of companies (corporate performance), Kotter and Heskett (1998). According to Robbins, (2008), organizational culture can affect performance.

Internal control (internal control) that is good can enables management ready to dynamic economic changes situation, increasingly fierce competition, shifting customer demands and their priorities, and also restructuring for future progress. According to COSO (1992), that the difference in Internal Control of COSO version and Internal Control of previous version (version of Government Accountability Office/GAO) is the emphasis on Soft Control (Performer), which is the core of the internal control compared to its Hard Control (mechanisms, forms, etc.). Furthermore, according to the provisions of Article 1 of Law No.19 of 2003 on State Owned Enterprises (SOEs) the provisions of Article 22 Paragraph (1) The decision of the Minister of BUMN 117 of 2002 on Good Corporate Governance states that 'The Board of Directors shall establish an internal control system that is effective for securing investments and assets of state-owned enterprises. Several of research with corporate governance in Indonesia is more focused on the Stock Exchange and in the interests of the capital markets and investors only.

Literature Review

Corporate Performance

Performance (performance) is an achievement of the work in accordance with the rules and standards that apply to each organizations work. Hawkins (1979), states that: 'Performance is: (1) the process or manner of performing, (2) a nota

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