Gadjah Mada International Journal of Business
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What Do Banks, Rural Credit Institutions, and Regulators Infer from the Current Strengths and Standing of Indonesian SMEs?
Get PDFThis study investigates whether the Indonesian regulators control Indonesian small and medium-sized enterprises (SMEs) with matching or mismatching empowerment strategies, in light of their strengths and current standing. Indonesian SMEs contributed approximately 60.34% to Indonesia’s gross domestic product (GDP) in 2018. In addition, Indonesian regulators have focused on financial support through credit policies and tax incentives. Indonesian SMEs have been standing on organizational readiness and readiness for change, based on their social networks and social cognition. It collected thirteen informants with different expertise and experiences. This study’s results suggest Indonesia’s regulatory body and financial institutions should consider the SMEs’ social cognition and organizational readiness for change. According to the current situation, to empower Indonesian SMEs, we recommend strategies such as achieving knowledge supremacy, creating an economic development board, as in Singapore, formulating comprehensive industry-wide policies, adopting omnibus laws, and implementing a shifting balance strategy. In other words, the Indonesian regulators should implement major reforms, which are similar to glasnost and perestroika in the former Soviet Union. This is to enhance Indonesian SMEs and achieve the goal of the Government of Indonesia (GoI) with respect to the optimal distinctiveness of Indonesia’s future economy. This optimal distinctiveness refers to the GoI’s policies, which focused on knowledge supremacy, an industry-wide regime, and research for empowerment.
Validation of A Measuring Scale of The Factors for The Employability of Millennials
Get PDFToday the retention millennial workers is a challenge for organizations. The purpose of this paper is to propose ideas to the decision makers, to lessen the high rate of personnel turnover in all kinds of industries in many countries. This research validates an instrument thatevaluates the employability factors of millennials in Mexico, according to their own expectations. We based our study on the previous literature about the millennial generation in many countries. To validate the questionnaire, a sampling of 781 workers from the states of Querétaro and Guanajuato in México was conducted. The method used to achieve the objective was through exploratory and confirmatory factor analyses. The confirmatory factor analysis was conducted using structural equation modeling, and tested two different methods: first order and second order models. With the three methods, exploratory, first order and second order factor analyses, similar results were obtained. In the analysis of the statistical techniques, two latent variables associated with the expectations of this generational group were generated. The factors found are “personal satisfaction with the organization” and “satisfaction with the organization’s social commitment.” These two factors are supported by the literature of other researchers. It is suggested that this questionnaire be validated in other countries but also in other regions of Mexico, using different productive sectors, thereby obtaining a broader perspective that will allow us to understand not only what millennials want from their work, but to what extent they want i
The Influence of CEOs’ Hubris on Firms’ Performance in Indonesia: The Moderating Effects of CEOs’ Power and Board Vigilance
Get PDFPast studies on CEO hubris has found that board vigilance is effective in managing the negative outcome of hubris. Some studies found CEO non-duality and independent director representation are effective in decreasing the damage of hubris. However, these studies have only explored the causal relationship of hubris and firm performance in the one-tier corporate governance setting. This study analyzed the influence of CEO hubris on firm performance in Indonesia by taking into account the CEO-board power dynamics. Indonesia adopts the two-tier corporate system where the board is divided into the board of directors and commissioners. Through 99 public listed companies, this study found that hubris in Indonesian CEOs contributes well to firm performance. Moreover, a bigger commissioner board is effective in strengthening the positive influence of hubris on firm performance in Indonesia. Furthermore, this study hints that two-tier corporate governance is more efficient in controlling hubris than the one-tier system
The Imperfection in a Firm’s Knowledge of the Transformation Process Among Interlinked Internal Networks: The Defect Case
Get PDFThis study, firstly, identifies and analyzes the supply chain management of Aseli Dagadu Djokdja, Co., Ltd., (here-after ADD) which has a problem. Secondly, this study pinpoints what causes the problem in ADD’s supply-chain management (SCM). Thirdly, it investigates ADD’s knowledge of the transformation process, since it was not conducted properly. This research chose to use an exploratory case study with an in-depth interview to collect the data. This article questions all the CEOs and observes all stages of activity accompanied by their information, resources, and financial flows. The interviewer applies angulations to two or more of the subjects. This study takes note that ADD’s knowledge of the transformation process is imperfect; this weakness is at the top managerial level. The problem is also found when oral explanations do not follow the transfer of documents among the divisions and staff. It means that information asymmetry takes place. This study, which is designed with SNT and a comprehensive knowledge of the transformation process, has several biases. The first one is the inference validity bias. Secondly, it did not investigate how ADD’s management faces industrial competitiveness. Finally, this research could not capture what the staff at ADD transforms their knowledge into
The Effect of the Degree of Misfit Between Human Resources Management Practices and the Types of Organizational Culture on Organizational Performance
Get PDF“Fit model” argues that the level of misfit between human resources management (HRM) practices and the type of organizational culture negatively influences organizational performance. However, the lack of emprirical research to support that contention can be problematic. Utilizing the concept of fit, this study aims to examine empirically the effect of the degree of misfit between HRM practices and the types of organizational cultures on organizational performance. Data were collected from a sample comprising of 128 respondents representing 64 companies in Indonesia, from nine industrial sectors. The hypothetical model was developed based on four types of HRM practices (human relations, internal process, rational goals, and open systems) and four types of organizational cultures (clan, hierarchy, market, and adhocracy). Euclidean distance scores were calculated to describe the misfit between the HRM practices and the types of organizational culture variables. Subsequently, the effect of the misfit scores on organizational performance was determined. The results show that the degree of misfit between HRM practices and the type of organizational culture has a significant and negative effect on organizational performance. This empirical research supports the concept of fit, in which the type of organizational culture that is supported by suitable HRM practices will result in a more positive organizational performance. Then, it is deemed necessary for companies to adapt their HRM practices to their culture, in order to improve their performance
Dealing With Non-Performing Loans During The Bank Restructuring Process in Vietnam: Assessment Using The AHP and TOPSIS Methods
Get PDFThis article aims to assess the solutions that have been implemented in Vietnam to deal with non-performing loan(s) (NPLs) in the banking system. By trying to build evaluation criteria through a literature review and an expert survey, as well as using the analytic hierarchy process (AHP) and technique for order preference by similarity to ideal solution (TOPSIS), this research measures the effectiveness of the resolution of NPLs in Vietnam through many factors. The empirical results show that, in the past, the banking system in Vietnam has not dealt very well with bad debt, as it mostly uses traditional methods such as NPL write-offs by loan loss reserves or the liquidation of collateral. Based on our consideration of the NPLs’ resolutions that the Vietnamese banking system has implemented recently, we propose some suggestions to improve the necessary conditions for applying more market-based solutions, such as debt-equity swaps and securitization to thoroughly resolve the NPLs in Vietna
The Influence of Visual Merchandising on Store Patronage in the Fast-Fashion Stores in Indonesia: The Role of Shopping Value and Self-Congruity
No full textThe study examined direct and indirect effects of visual merchandising on store patronage in a fast-fashion retail context. Adopting the Stimulus-Organism-Response (S-O-R) theory, this study aimed to investigate the relationships of visual merchandising, self-congruity, consumers’ perceived shopping value in determining store patronage. While studies about fast-fashion and store patronage behaviour have been extensively conducted in various market regions, research in an emerging middle-income country like Indonesia is still in its scarcity. The study is therefore among a few attempts to better understand the Indonesian consumers’ buying behaviour of fast-fashion brands. A survey was completed to 250 fast-fashion store shoppers in Surabaya, the second largest city and well-known shopping tourism destination in Indonesia. Partial Least Squares (PLS) path modelling method was utilised to estimate the proposed structural model. The results revealed that visual merchandising, shopping value, and self-congruity had positive and significant effects on store patronage. The study has also found that the indirect effects of consumers’ perceived shopping value and self-congruity as mediating variables as to how visual merchandising affected store patronage, were stronger than the direct ones. Managerial implications based on the findings and recommendations for further research were described
Foreign Investor’s Interest and Tax Avoidance: Contingency Perspectives Depended on Country’s Protection Level and Law Systems
Get PDFThis study investigates differences in firms’ tax avoidances between multinational and national. Furthermore, it investigates the differences between firms’ contingent behavior because of the country’s investor protection level and law systems. This research takes into account the firms’ tax avoidance phenomenon. Besides that, it proposes novelties as follows. First, this study highlights that multinational firms tend to avoid taxes higher than national ones. Second, it induces the dividend catering theory related to the country’s investor protection. The latest, it persuades that country’s investor protection, and law systems make firms contingent on their tax avoidance behaviors. This study finds that firms where they live in high investors’ protection countries and common law did higher tax avoidance than others. The findings imply that these firms could grow higher than others. It means that this study suggests economic consequences. The consequence is that a country should increase its investors’ protection level and somehow redefine its law systems. Therefore, it could enhance its capital market and subsequently improve the national welfares
The Evolution in Value Relevance of Accounting Measures in Indonesia
No full textThis paper utilizes the model of share price, which is derived from the valuation model of residual income, to rigorously assess the evolution of value relevance of accounting measures in Indonesia, an emerging market country which has its landscape of equity valuation changed substantially. Using two different approaches, cross sectional and panel regressions, the results indicates a strong linear association between share price and accounting measures. Cross-sectional yearly price regressions provide a strong evidence of non-linear changes on the value relevance of accounting measures over time. Moreover, using panel data analysis, the results of unconditional comparison tests reveal that that the increased value-relevance of the balance sheet would be offset by a reduction of the value-relevance of earnings per share during IFRS regime. It could potentially contribute to explain the decrease in value relevance of accounting numbers during the switchover to IFRS in Indonesia
Investigation of the Stochastic Choice under Risk using Experimental Data
Get PDFThis paper extends the analysis of the data from the experiment undertaken by Pradiptyo et al. (2015), to help explain the subjects’ behaviour when making decisions under risk. This study specifically investigates the relative empirical performance of the two general models of the stochastic choice: the random utility model (RUM) and the random preference model (RPM) where this paper specifies these models using two preference functionals, expected utility (EU) and rank-dependent expected utility (RDEU). The parameters are estimated in each model using a maximum likelihood technique and run a horse-race using the goodness-of-fit between the models. The results show that the RUM better explains the subjects’ behaviour in the experiment. Additionally, the RDEU fits better than the EU for modelling the stochastic choice.