foreword welcome to the 4th international...

The Fourth International Conference on Entrepreneurship | Book Three

I

FOREWORD

Welcome to the 4th International Conference on Entrepreneurship (ICOEN) 2017, Dili, Timor Leste

On behalf of The Organizational Committee, Honorable Chairs, Conference Chairs , and Conference Co-Chairs, its is a great pleasure to welcome you to this 4th ICOEN Annual Conference 2017 in Dili, Timor Leste. A special word of appreciation to our Conference Chair , Miguel Lucas Lay Costa, SE., M.M.; Manuel Gonvalves Lic. Eco, M.M, Fransisco Vicente Lic Eco, M.A; Manuel Loe Siga Lic Eco, M.M; Faustina da Costa Lic, CSH for their enormous efforts and good collaboration toward the arrangement for hosting this annual ICOEN conference. The ICOEN 2017 activity will enhance good relationship between academic scholars and business practitioner in Organization.

We do hope you have enjoyable and enriching experience throughout the conference , and take adventage of the collaborative, friendly and community of advanced scholarship from our international conference. May I also take this opportunity to invite you to the 5th ICOEN 2018 to be held in Universitas of Ciputra , Surabaya, East Java, Indonesia. Last but not least, we would like to express our sincere gratitude to everyone who has contributed and made the joint conference a success. Best wishes, ICOEN 2017, Steering Committee Chair Dr. J.E.Sutanto, M.M. Graduate School, Universitas of Ciputra Surabaya, INDONESIA


II

FOREWORD

It is my great pleasure to welcome you all in the 4th International Conference on Entrepreneurship (ICOEN) 2017 I would like to delivery my sincre thanks to the working. Team Universitas of Ciputra, Surabaya Indonesia, for their Enormous contribution towards the detailes arrangement of the 4th International Conference on Entrepreneurship (ICOEN) 2017, Dili, Timor Leste). The conference is held on September 06th and 08th, 2017,

moreover. It attracts educators, researchers, and entrepreneurs which related with scientific disciplines of practitioners. On this occasion, let me give special thanks to the Keynote Speakers: (1) Dr. Charles Chow East-West Management University, Singapore; (2) David S. Dixon University of New Mexico, USA, (3) Dr. Amir Shaharuddin, Universiti Sains Malaysia, Malaysia, (4) Prof. Dr. Lucas da Costa, S.E., M.Si., Universidade da Paz, Timor Leste, (5) Dr. Ir. Denny Bernadus, M.M.,Ciputra Education Foundation, Indonesia, (6) Dato Dr. Kim Tan Advisor, TBN Asia; TRUSTEE, TBN UK I also want to thank the kind support all of co-host which your contribution to this seminar as reviewers and keynote speakers make this event more meaningful and evaluable. We are also thankful to all reviewers, for their commitment, effort and dedication in understanding the task of reviewing all of the full paper. We would like to thank to all authors who have submitted their papers to be reviewed, those whose paper were chosen to be presented in the seminar, and those who have submitted manuscripts to be publishes in proceeding. On behalf of all my colleagues, I would like to offer my best wishes for a successful, stimulating and memorable conference Sincerely, ICOEN 2017, Conference Chair Miguel Lucas Lay Costa, SE., M.M Universidada da Paz, Dili, Timor Leste


III

COMMITTEE

Steering Committee

1. Dr. J.E.Sutanto, M.M.

Universitas of Ciputra Surabaya

2. Dr. Ir. Dominggos Cairesi B.B. Gomes, M.Sc.

Universidade da Paz, Dili, Timor Leste

3. Ir. Rini Retnowati, M.PA


4. Fernando Diaz Gusmao, Amd., S.IP., MAP.,


5. Rosinho da Crusz, Lic.Dir., M.Dir.,


6. Dr. Wirawan Endro Dwi Radianto, S.E., M.Sc., Ak


7. Dr. Trianggono Wiradinata, S.T., M.Eng., Sc.


8. Damelina B. Tambunan, SE., M.M., Ph.D.


9. Dr. David Sukardi Kodrat, M.M.


10. Dr. Tina Melinda, M.M.


11. Imam Wijoyo, S.E., M.M.

STIE IBMT Surabaya

12. Prof. Dr. Nyoman Puspa Asri, M.S.

University of W.R. Supratman Surabaya

13. Irwan Yulianto, S.H., M.H.


IV

University of Abdurachman Saleh Situbondo

14. Dr. H. Pribanus Wantara, Drs., M.M.

University of Trunojoyo Madura

15. Dr. Ir. H. Sundjoto, M.M.

STIE Mahardhika Surabaya

16. Dendi Sean T.

Indonesia Marketing Association Chapter Surabaya

17. Dr. Muhammad Alkirom Wildan, S.E., M.Si.

Insan Doktor Ekonomi Indonesia Surabaya

18. Drs. Eko Wahjudi, M.Si.

University of State Surabaya

19. Gabriel Neves

Institute of Business, Timor Leste

20. Lucio M. Gomes

East Timor Coffee Institute


V

Organizing Committee

Chair : Miguel Lucas Lay Costa, SE., M.M. Universidade da Paz

Secretary : Manuel Gonvalves Lic. Eco, M.M.. Universidade da Paz

Co-Secretary : Fransisco Vicente Lic Eco, M.A. Universidade da Paz

Treasury : Manuel Loe Siga Lic Eco, M.M. Universidade da Paz

Co-Treasury : Faustina da Costa Lic, CSH Universidade da Paz

HELD BY UNIVERSIDADE OF dA PAZ DILI COLLABORATED WITH

1. University of Ciputra Surabaya, INDONESIA

2. University of Trunojoyo Madura, INDONESIA

3. STIE Mahardhika Surabaya, INDONESIA

4. University of W.R. Supratman Surabaya, INDONESIA

5. STIE IBMT Surabaya, INDONESIA

6. University of Abdurachman Saleh Situbondo, INDONESIA

7. University of State Surabaya, INDONESIA

8. Insan Doktor Indonesia Surabaya, INDONESIA

9. Indonesia Marketing Association of Chapter Surabaya, INDONESIA

10. Institute of Business, TIMOR LESTE

11. East Timor Coffee Institute, TIMOR LESTE


VI

REVIEWER 1. Prof. Drs. Tatang Ary Gumanti, M.Buss. Acc., Ph.D

University of Jember.

2. Prof. Dr. Ir. Hening Widi Oetomo, M.M., Ph.D.

Sekolah Tinggi Ilmu Ekonomi Indonesia Surabaya

3. Prof. Dr. Lucas da Costa, SE., M.Si Da Paz Universidade, Timor Leste

4. Dr. Tina Melinda, Dra., M.M. Universitas of Ciputra Surabaya

5. Prof. Dr. F. Danardana Murwani, M.M University of State Malang

6. Dr. Christina Whidya Utami, M.M. University of Ciputra Surabaya

7. Dr. David Sukardi Kodrat, M.M. University of Ciputra Surabaya

8. Dr.Tommy Christian Efrata, S.E., M.Sc. University of Ciputra Surabaya

9. Dr. J.E. Sutanto, M.M. University of Ciputra Surabaya

10. Prof. Dr. J.G. Nirbito, M.Pd

University of Ciputra Surabaya

11. Jose Cornelio Guterres, Ph.D Universidade da Paz, Dili, Timor Leste

12. Dr. Elidio de Araujo, Lic.Eco, M.M

Universidade da Paz, Dili, Timor Leste 13. Dr. Augusto C Soares, S.E., M.M

Institute of Business, Timor Leste 14. Dr. Adolmando Soares Amaral, Lic.Eco, M.M



VII

15. Dr. Alex Pires, Lic.Eco, M.M



VIII

KEYNOTE SPEAKERS

1. Dr. Charles Chow East-West Management University, Singapore

2. David S. Dixon University of New Mexico, USA

3. Dr. Amir Shaharuddin Universiti Sains Malaysia, Malaysia

4. Prof. Dr. Lucas da Costa, S.E., M.Si. Universidade da Paz, Timor Leste

5. Dr. Ir Denny Bernadus, M.M. Ciputra Education Foundation, Indonesia

6. Dato Dr. Kim Tan Advisor, TBN Asia; TRUSTEE, TBN UK


IX

TABLE OF CONTENTS

1Raditya Putra Awangga, 2Tommy Christian Efrata

The Establishment of Employees’ Work

Motivation Strategy to Increase

Productivity in Corvette Workshop

Surabaya

1

1Cahya Riski, 2J.E. Sutanto

Quality Service Effect CV Bshb Towards

Perceived Service Quality Users of Gresik

Regental Goverment

7

1Sasongko Basuki, 2J.E.

Sutanto

Factors Affecting the Succesion Process of the

Family Business in East Java, Indonesia 21

1Manuel Goncalves, 2J.

Nirbito

Effect Of Attitude, Subjective Norms, and

Entrepreneur Behavior Control on Sme’s

Atsabe Community Behavior With

Entrepreneur Intention as Mediator Variable

30

1Jose da silva, 2Denny

Bernardus

Entrepreneurship Learning Analysis on the

Readabulity of Entrepreneur Trough

Subjective Norm and Attitudes in Students of

Economic Faculty Economy Unpaz

39

1Asy'ari

Financial Statement Control in the Wealth

Management for Individual Company 48

Wulandari Harjanti1

Social Network Influence to Subjective Norms

in Knowledge Sharing 54

1Dwi Perwitasari

Wiryaningtyas

Behavioral Finance in Debt Decision Making

59

1Hujjatullah

Fazlurrahman, 2Nindria

Untarini

Comparing of Entrepreneurial Intention

Student Between Science And Humanities

Students: A Literature Review

65

1Parwita Setya Wardhani, 2Menur Kusumaningtyas2

Women As Entrepreneurs With Small Capital 78

1Tias A. Indrawati, 2Riza

Y. Kurniawan

Enhancing Competitiveness Smes Women

Creative Industry in Surabaya 85

1Hafid Kholidi Hadi, 2Anik Lestari A

Change Management: An Islamics Perspective 95

1Yenny Kartika Halim, 2Trianggoro Wiradinata

The Influence of Leadership, Motivation,

and Discipline on Employees’ Performance

PT. LMA

100

1Senain, 2Farida Hanum

Utilization of Wood Cutting Waste Back to

Material Furniture Through Social

Entrepreneurship Approach

109

1Moch. Kalam Mollah

Influence Analysis of Motivation Factors

Work to Work Satisfaction in Low Education

Workers at Tanggulangin’s Sme in Sidoarjo

East Java

114


X

1Andre Tjahyono, 2Tina

Melinda

Traditional Snack Strategic Marketing

Analysis of PT. X 123

1Hadi Wijono The Implementation of Economic

Empowerment of Micro, Small and Middle

Enterprises For Food and Beverage Business

in The Regency of Situbondo

130

1Ardhito Himawan, 2Wirawan Endro Dwi

Radianto

The Effect of Leadership Style and

Organisational Culture to Company

Performance Through Strategy of Innovation

as Intervening Variable in PT. Bintang Sarana

Ekspress

134

1Muhammad Yusuf

Ibrahim

Legal Protection For Trademarks For Products

of Umkm Products in Situbondo District 142

1Nanik Hariyana, 2Lita

Permata Sari

The Effect of Marketing Mix Strategy on

Trust

and Product Purchase Decisions by Jember

Specifications

148

1R.A. Sista Paramita

The Influence of Size of Credit, Gender, Age

and Education to Opportunity of Smes

Performance Improvement in Malang

152

1Asra Al Fauzi, 2Denny

Bernardus

Motivational Compensation Design for

Surgeon in Neurosurgical Group Services in

Surabaya

165

1Made Kamisutara, 2I Putu

Artaya

Analysis And Design of Early Warning

Application for Pregnant Women Health for

Acceleration Reduce Mortality Rate Mother

And Baby Web Based And SMS Gateway

174

1Rony Prabowo, 2Moses

L. Singgih, 3Putu Dana

Karningsih, 4Erwin

Widodo

Inactive Problem Recognition Perspective in

Consumer’s Buying Decision: Study

Literature

181

1Surjohadi, 2Heri Tri

Saksono, 3Sugiarto

Marketing Analysis Of Agricultural Product

Sweet Potatoes Using Markov Chain 192

1Setya Haksama Efforts to Improve Patient Visit Based on

Perception, Motivation, Personality, and

Decisions to Uses Health Care Aspect

at Surabaya Lung Hospital

198

1Steven Irawan Innovation Strategy Analysis in UD. X Using

Business Model Canvas and Ten Types of

Innovation Tools

209

1Darwin Simangunsong, 2Bambang Syairudin

Benefit Cost Ratio Analysis of Sukorejo –

Batu Pass Road Project 215

1Tina Melinda

Family Business Viewed From Complexity

Family And Business And How to Manage to

Achieve Sustainability

231


XI

1Soffia Pudji Estiasih, 2Endang Prihatiningsih, 3Handri Kartiono

Profit Planning Model Using the Cost-

Volume-Profit Analysis Approach

(Case Study in CV Transtrek Indonesia Batu

Malang)

238

1Suparjo, 2Gatot Setyono

Information Technology to Develop and

Improving Sales Product on Middle Low

Business At seruni sidoarjo

247

1Churin In, 2David

Sukardi Kodrat

Launching Strategy Delish Coffeshop in Kota

Gresik 255

1Ristanti Ayu Dian

Permatasari, 2Tina

Melinda♠

Strategy Design Marketing Wood Flooring

Product in PT. Srikandi Mandiri Sakti 263

1Sugiono, 2Tina Melinda♠

Optimalization Property Aset of Village

(Study in Desa Ketajen, Kec. Gedangan, Kab.

Sidoarjo)

268

1Azaria Anindita Pandu’u

The Effect of Brand Image and Service

Quality on Perceived Value and Behavioral

Intention (Empirical Study in Culinary

Business Universitas Ciputra)

280

1Budi Utomo, 2Muri

Hardiyanto, 3Sri Purwanti

Analysis of Consumer Behavior in Choosing

Rice Packaging of Brands “Alami, Pak Tani

And Padi” (Cose Study at Rahma Jaya Store

Mojokerto City)

291

1Lavencia Dean Ananda, 2Tina Melinda

Influence Relationship Marketing to Customer

Satisfaction and Loyalty 302

1Ryan Rizki Herdianto, 2Tina Melinda

Marketing Strategy's Fullfreedom

322


1

THE ESTABLISHMENT OF EMPLOYEES’ WORK

MOTIVATION STRATEGY TO INCREASE

PRODUCTIVITY IN CORVETTE WORKSHOP SURABAYA

1Raditya Putra Awangga,

2Tommy Christian Efrata♠

Ciputra University Surabaya

INDONESIA

Email: [email protected]

ABSTRACT

This study aims to determine factors that are causing the low motivation

and also strategies that can be used to increase motivation in Corvette

Workshop. Corvette Workshop is one of the leading workshop in

Surabaya, backed up with high-end technologies and lead by well-

educated mechanics. Unfortunately, performance of this workshop is

proven to be declining, causing loss to the company.

After an observation concerning the performance is done, the decline is

mostly caused by the lack of employees’ work motivation. Employees, as

human, have many internal and external factors that can affect their work

motivations. Even though they have received adequate amount of salary,

the ever-growing needs will bring negative impact to their work lives, one

of them is the decline of work motivation.

Quantitative analysis from interview data will show internal and external

factors that can determine the quality of employee work motivation, and

in order to validate the findings academically, some theories will be used.

Motivation Theory and Maslow Theory will be applied in this study,

considering the subject of research is the motivation of human who have

degrees of life necessities. SWOT Theories will also be used to determine

the positioning of the company and to plan for future strategies. The

result shows that ST strategy with diversification means. This strategy

uses company’s strength (S) to repel threat (T) with concentric

diversification to fulfill material needs and horizontal diversification to

fulfill non – material needs.

Key words: motivation, productivity, and strategy.

INTRODUCTION

Corvette Workshop Surabaya as an organization has internal and external factors that contribute

to the future of the company. The internal factors mentioned include man (i.e. human and

employees), money or capital, machinery, material, and method (i.e. ways and procedures).

External factors mentioned include economic condition, market state, technological

development, and government policy or regulation.

The first year of Corvette Workshop Surabaya establishment was considered to be quite

flourishing, which makes the owner decides to increase the number of employees, equipments,

and service types. This action had proven to give negative result which is not proportional to the

mailto:[email protected]


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investment made. This gives insight to the problems that need to be deeply analyzed. If we look

further, Corvette Workshop condition as of now faces some internal factors as such:

a. Man : Corvette Workshop’s employees are fulfilled quantitatively but

lacking qualitatively

b. Money : Corvette Workshop has an adequate amount of capital

c. Machine : Corvette Workshop has a complete array of offers, including a dyno test

d. Material : Corvette Workshop has a complete array of working tools and supporting

facilities

e. Method : Corvette Workshop’s methods and procedures are not optimal Based on

the analysis above, Man and Method factors give more contribution to the lack of growth

in Corvette Workshop. Employees as the main factor is not showing maximum

performance because of the lack of motivation, which reduces productivity and hinders

company from its goal. This situation will hold as long as ineffective methods are used.

LITERATURE REVIEW

Maslow’s Hierarchy of Needs

The essence of this theory says that human needs are composed in a hierarchy. The

lowest level of needs is physiology needs, and the highest is self – actualization needs.

This theory assumes that people tries to fulfill their needs starting from the lowest level

first before trying to fulfill the higher level. This is because people always have the desire

to improve.

Maslow in Mathis (2011) explains that human needs can be classified to 5 levels:

1. Physiological Needs

Physiological needs are the lowest level of human needs, which is the physical

requirement of human survival. This includes food, clothing, home, oxygen, sleep,

sex, and many more.

2. Security Needs

This need includes safety and security from work risk, work insurance, and pension

plan.

3. Social Needs

This need includes friendship, affiliation, and interaction with other human beings.

4. Esteem Needs

This need includes appreciation and respect for their achievement, and also

recognition for their skills and talents.

5. Self – Actualization Needs

Self actualization is related with the process of developing the true potential of

human – the need to show skills, abilities and potentials

The most important thing taken from this theory is that fulfilled human need is a form of

motivation, where if someone feels adequate with their salary, then money is not the

cause for the lack of work motivation. Unfulfilled need is one of the potential threats for

the company. It can cause frustration, conflicts, and mental strain.

RESEARCH METHODS

Research method is a framework in a particular study that measures and analyzes data in

order to answer research problems. This research uses qualitative method research with

descriptive approach. There are some definitions about the description of qualitative

approach. Moleong (2011) stated that qualitative research is a collection of data in a

natural setting using natural method and done by researchers who are naturally

interested.


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The research is done, at Corvette Workshop in Surabaya, Karang Menjangan street

no.106. It is done carefully with scientific method and approach, including interviews

and archiving their documents for seven months from June to December 2016.

This study uses purposive sampling technique for sampling method. This technique set

samples based on certain criteria which are adjusted to the information needed by the

researcher. The samples that were chosen with this method are 6 (six) employees who

work at Corvette Workshop Surabaya. The researcher chooses these 6 particular

employees because the researcher believes that these 6 people take part in the

management of Corvette Workshop Surabaya. Data analysis technique used in this

research is qualitative data analysis technique from Miles and Hubberman. Miles and

Hubberman state that there are 3 different analyses happened at the same time, which are

data reduction, data presentation, and conclusion making.

RESULT AND DISCUSSION

IFAS and EFAS Analysis

Table.1 below is the result of IFAS analysis done after the identification of internal factors.

Table 1. IFAS Matrix of Corvette Workshop Surabaya

INTERNAL STRATEGY FACTORS WEIGHT

RATING

SCORE

Strength (S):

1. Salary and Compensation

2. Allowance

3. Work Safety and Amenities

4. Archievement Award 5. Pension

0.16

0.12

0.12

0.07 0.07

4

3

3

2 2

0.64

0.36

0.36

0.14 0.14

SUB TOTAL 0.54 1.64

Weakness (W):

1. Life Expediency

2. Cooperation and Communication

3. Management Control Function

4. Organization Policy 5. Self Development

0.04

0.07

0.07

0.12 0.16

1

2

2

3 4

0.04

0.14

0.14

0.36 0.64

SUB TOTAL 0.46 1.32

TOTAL 1 2.96

Legend : For Strength (S), column “Rating”

means: Rating 1: Small strength

Rating 2: Medium

strength Rating 3: Big

strength Rating 4:

Massive strength

For Weakness (W), column “Rating”

means: Rating 4: Small weakness

Rating 3: Medium weakness Rating 2: Big weakness Rating 1: Massive weakness

Table.2 below is the result of EFAS analysis done after the identification of external

factors.


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Table 2. EFAS Matrix of Corvette Workshop Surabaya

EXTERNAL STRATEGY FACTORS WEIGHT

RATING

SCORE

Opportunity (O):

1. Lack of Outside Employment

2. Information Technology

3. Automotive World Advancement

4. Workplace Environment 5. Employee Actualization

0.15

0.07

0.12

0.07 0.07

4

2

3

2 2

0.60

0.14

0.36

0.14 0.14

SUB TOTAL 0.48 1.38

Threat (T):

1. New Competitor in Similar Business

2. Employee Hijacking

3. Price War

4. Social Setting Development

5. Change in Government

Policy SUB TOTAL

0.04

0.12

0.07

0.12

0.16 0.51

1

3

2

3

4

0.04

0.36

0.14

0.36

0.64 1.54

TOTAL 1 2.92

Legends: For Opportunity (O), column “Rating”

means: Rating 1 : Small opportunity

Rating 2 : Medium

opportunity Rating 3 : Big

opportunity Rating 4 :

Massive opportunity

For Threat (T), column “Rating”

means: Rating 4 : Small threat

Rating 3 : Medium

threat Rating 2 : Big

threat Rating 1 :

Massive threat

Analysis result from Table.1 IFAS and Table.2 EFAS show the total score of each factor as:

Strength [1.64], Weakness [1.32], Opportunity [1.38], and Threat [1.54]. The result above

shows that Strength point is higher than Weakness point with the difference of (+) 0.32 and

Opportunity point is lower than Threat point with the difference of (-) 0.16. Those points can be

implemented into SWOT diagram as shown in Figure.1

Figure 1. Cartesian Diagram of Corvette Workshop SWOT Analysis


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SWOT Matrix Strategy Combination will also be made based on the points from each

factor. The result can be seen at Table.3.

Table 3. SWOT Matrix Strategy Combination

IFAS

EFAS

STRENGTH (S)

WEAKNESS (W)

OPPORTUNITY (O)

STRATEGY (SO)

=1.64 + 1.38

= 3.02

STRATEGY (WO)

=1.32 + 1.38

= 2,7

THREAT (T)

STRATEGY (ST)

=1.64 + 1.54

= 3.18

STRATEGY (WT)

=1.32 + 1.54

= 2.86

Based on the result on SWOT Matrix combination, ST strategy has the highest point

(3.18) among the others. This is in line with IFAS and EFAS matrix analysis which put

itself at fourth quadrant.

Strategy of Choice

Analysis and research of IFAS and EFAS factors shows that ST strategy has the highest

point (3.18) among other strategies, and calculation of Cartesian matrix shows result that

is positioned at fourth quadrant, between Strength and Threat in the form of

diversification. Based on these results, Corvette Workshop Surabaya will try to increase

employees work motivation using ST Strategy with many kind of diversification

activities.

a. Concentric Diversification Strategy

ST strategy with concentric diversification focuses on the means to fulfill material

needs of employees, such as:

Giving employees an adequate and on-time salary and wage.

1. Giving employees a new motorcycle if they work diligently for three years

without resigning.

2. Giving employees a cut of salary or wage when they are absent without

explanation as a form of reward and punishment.

b. Horizontal Diversification Strategy

ST strategy with horizontal diversification focuses on the means to fulfill immaterial

needs of employees, such as:

1. Giving employees recognition of their achievement.

2. Giving employees information about modest lifestyle in the midst of

consumptive society.

3. Having a good and clear communication among employees as well as between

employees and owner.

4. Setting “work is prayer” motto at workplace.

CONCLUSION

Based on the above result and discussion, there are some conclusions that can be taken as

listed below:

1. Motivation is placed at moral dimension beside intellectual dimension. Motivation is

a spiritual process which can only be felt and cannot be touched. In an employee’s

life, motivation acts as a drive for them to work.


6

2. Motivation enhancement is not separated from influencing factors. The influence of

environment became more dominant altogether with the development of society that

tends to be more materialistic. Honestly speaking, the influencing factors give more

negative effects to the company.

3. The usage of Maslow Theory stating that “motivation is in line with need

fulfillment” will give burden to the company because employee’s need always grows

with each passing days.

4. The aforementioned problems happened at Corvette Workshop Surabaya where its

productivity recently declines. Research shows strong indication that the main cause

is the lack of employee work motivation.

5. Research result shows that company must do some diversification in order to solve

the problem.

6. The company must consider different type of diversification because of the

involvement in motivation factors, which focus on the fulfillment of material and

immaterial needs.

7. Calculation combination shows that the company must make use of its strength in

order to cover any possible weakness.

8. Research results and considerations shows that the strategy of choice is the one that

uses Strength to cover Weakness through the usage of concentric diversification.

REFERENCES

Maslow, A. (2011). Teori Hiraki Motivasi. Retrieved 5 November 2016, from

http://rajapresentasi.com/2009/03/teori-hirarki-motivasi-dari-abraham-

maslow.

Mathis, R.L. & Jackson, J.H. (2011). Human Resource Management. Jakarta. Salemba

Empat.

Moleong, L.J. (2012). Metodologi Penelitian Kualitatif. Bandung: PT. Remaja

Rosdakarya.

Miles, B.M. & Huberman (2007), Analisis Data Kualitatif: Buku Sumber Metode- metode

Baru, Universitas Indonesia Press,Jakarta.

Rangkuti, F. (2001). Analisis SWOT Teknik Membedah Kasus Bisnis, PT. Gramedia

Pustaka Utama, Jakarta

Rangkuti, F. (2011). SWOT Balanced Scorecard. Jakarta: PT Gramedia Pustaka Utama.

http://rajapresentasi.com/2009/03/teori-hirarki-motivasi-dari-abraham-


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QUALITY SERVICE EFFECT CV BSHB TOWARDS PERCEIVED

SERVICE QUALITY USERS OF GRESIK REGENTAL

GOVERMENT

1Cahya Riski, 2J.E. Sutanto♠


INDONESIA

Emails: [email protected], [email protected]

ABSTRACT

This study aims to examine partially the

dimensions of SERVQUAL construction service

providers against perceived quality service in the

Government of Gresik Regency. The independent

variables were examined in this study is Tangibles

(X1), Reliability (X2), Responsiveness (X3),

Assurance (X4) and Empathy (X5). For the

dependent variable in this study is perceived

Service Quality (Y). The population in this study

were officials and staff of the District Government

of Gresik as much as 1,967. After sampling using

methods slovin, the samples used in this study as

many as 100 people. Based on the analysis that

has been done by using multiple linear regression

modeling is known of 5 (five) dimensions servqual

only 3 (three) variables that had a significant

influence on service quality perceived. These

variables are Tangibles (X1), Reliability (X2) and

Assurance (X4).

Keywords : SERVQUAL, Perceived Service

Quality, Construction

INTRODUCTION

CV BSHB is one of the firms that participates in the regent government. The service given

by this cv includes the building of new offices as well as the maintenances and renovation.

CV BSHB has been established since 2003 and it operates in Gresik regent government.

The company gradually develops and improves its service quality in order to meet the

need of the clients.

To accommodate the services of its clients, the company always communicates actively

either by phone or the social media so that its clients can monitor the updates information

and the progress of its projects considering the amount of fund executed for the project.

The intensity of communication is one effort to measure the service in dealing with

complaint. To evaluate the qualities of its service, e.g., experience with its score 15% and

technical with its score 75%, the table 1 below shows the recapitulation of the clients of

Gresik Regent Secretary office of equipment division.

mailto:[email protected],



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Table 1 Evaluation Recapitulation Towards Service Provider Fiscal Year 2012-2013

Source : Data is processed from the Recapitulation of Evaluation Gresik Regional Secretary

Towards Service Provider For Fiscal Year 2012-2013

The evaluation result done influenced towards the project volume which is conducted

by the company.

Below table 2 shows the onset decrease for 39,36% within the last year (2013-2014)

Table 2 CV. BSHB project data in fiscal year 2012-2014

Source : Company internal data on fiscal year 2012-2014


9

The service quality of CV BSHB as the supplier of construction work, based on the last

evaluation of by the clients, experienced the decrease of the project standard execution.

Based on the fact that the company should conduct research to identify the cause as well

as the factors that affected the decrease of the company’s service quality.

Customers or clients’ readiness to re-order in 2012-2013 can be stabile if the project

contract is reached 1, 566 Billion Rupiah. The evaluation conducted by the clients can be

used as reference in executing the project in the 2014 annual’s budget; therefore the

company is also evaluated. In 2014, the company experienced the decrease of project

volume i.e, four projects are in line within the onset decrease for 39,36% or Rp.

616.635.040 from 2013 annual budget.

According to Gunarathne (2014) customers might have different value as well as different

reason for evaluation and most of the time; they are given the same service with different

method. For this reason, the research entitles “The Service Quality Effect of CV BSHB

towards Perceived Service Quality clients in Gresik Regent Government”. Henceforth,

the company’s future can improve its aspects to increase its performance through

SERVQUAL dimension in order to accommodate the clients’ expectation.

PURPOSE

This research aims to test the partial effect among the five dimensions of SERVQUAL

(Tangibles, Reliability, Responsiveness, Assurance, dan Emphaty) clients in Gresik regent

government. The significance of this research is to determine that Servqual constitutes

precise dimension service and product quality that can influence the clients’ perception

and expectation.

REVIEW OF RELATED THEORIES

According to Brandt (2014:31) these five gaps of service quality that give the effect

towards the service:

1. Gap 1 : Gaps between client’s expectation and the managerial perception. These

show that the difference between the client expectation and its managerial perception are

caused by the management mistake or flaw in understanding the consumers’ expectation.

2. Gap 2 : The Perception Gap between the supplier towards the client expectation and

the specification quality of service. This gap shows the difference between the managerial

perception related to the clients’ expectation and the specification of service quality.

3. Gap 3 : The Gap between quality service specification and the process of service

delivering/ dispatch. This gap shows the difference between quality service specification

and the process of service delivering/ dispatch given by its employees. This gap

constitutes the incompatibility of the service performance as its employees are not able or

do not intend to deliver/ show the level of service required by the customers or clients.

4. Gap 4 : The gap between service and external communication to customers.

Customer expectations of service quality are influenced by statements made by the

company through marketing communications. This gap occurs as a result of a discrepancy

between the promised service and the service delivered.

Gap 5: The gap between customer perceptions and customer expectations. If customer

perceptions and expectations about service quality prove to be the same and even better

perceptions of expectations

the company will get a positive image and impact. Conversely, if the quality of service

received is lower than expected then this gap will cause problems for the company. The

Quality Gap can be shown in Figure 1


10

Figure 1 Conceptual Method SERVQUAL

RESEARCH METHODS

In this study has a goal to describe the expectations of service users about the quality of

services provided by service providers. Therefore, there are stages needed to obtain all this

information, the stages include the method of collecting samples, data collection, and data

analysis that aims to answer the purpose of this research.

The respondents in this research will use sampling by Probability Sampling. We select

groups or clusters within the local government of Gresik Regency. Here is the sample

cluster we use in this research (Table 3)

Table 3 Population in Regent Government Institution /Regent-Owned enterprises at

Gresik Regent Government

No Institution Numbers of

Employees

1 Gresik Regent Secretary 265

2 Public Works Services 229

3 Health Services 1.087

4 Environmental Services 73

5 Financial Revenue, Management, and Local Asset

Services

110

6 Procurement of goods and services Unit 53

7 Bank Jatim Gresik Branch 150

Total 1.967

Source : Gresik in Figures 2014

The Sampling technique in this study population used simple random sampling

as the number of population in the Government of Gresik Regency and Regional

Owned Enterprises that operate in Gresik Regency has been known, the technique

of sampling using Solvin technique with the formula. (Siregar, 2014)


11

The Sampling is done by random sampling method to population of Government Institution

and BUMD spread in Gresik Regency. However, in this study the number of samples is

computed to 100 respondents. According to Franken and Wallen for descriptive research

large minimum sample of 100 respondents

The Data collection is a process of collecting primary and secondary data in a study. Data

collection is a systematic and standard procedure for obtaining the necessary data, and there

is always a relationship between the data collection method and the research problem to be

solved (Siregar, 2014). The following data collection methods are needed to answer the

purpose of research, including :

The type of data used is cross sectional data (data consisting of several variables

collected at the same time) and based on the nature of data collected in the form of

quantitative data because the data obtained in the form of numbers.

Based on how it is obtained, this study uses primary data and secondary data. In this

study, used secondary data in the form of internal company data and literature review

of various forms of publication and also research that has been done and published.

The data of this research is taken from the service user as the result of the survey /

filling questionnaires of officials and staff at the local government agencies of Gresik

Regency, as well as from the literature and research results that have been done

before.

This study uses data collection techniques with a gradual and in-depth interview

technique (in depth interview) with a number of respondents who have chosen

deliberately.

Findings and Discussion

The Respondents participated from this research are all officials and staff of Local

Government of Gresik Regency who actively communicate and cooperate with CV. BSHB

as of September 2015. Staff / Officials who work with companies in the Local Government

of Gresik Regency amount to 100 people with details as shown in the table below.

Table 4. Number of Respondent Based on Institution in Gresik Regent

Government

No Institution Total

1. Gresik Regent Secretary 14

2. Public Works Services 12

3. Health Services 55

4. Environmental Services 4

5. Financial Revenue, Management, and Local

Asset

Services

5

6. Procurement of goods and services Unit 4

7. Bank Jatim Gresik Branch 6

Total 10

0

In this case, the researcher has conducted instrument test on 100 staff / employees

(SKPD Gresik and Bank Jatim) who interact / communicate directly with our company.

The researcher uses the instrument of validity test and reliability test by distributing the

research instruments we have compiled to the research respondents. The results of valid


12

research when there is similarity between the data collected with the actual data occurred

on the object under study. Here are the instruments used in this research :

1. Tangibles (X1)

▪ Company has proper license and certification meets Government standard needs

(X1.1)

▪ Company has representative office / workshop (X1.2)

▪ Company has facilities and infrastructure to support daily operation during project

(X1.3)

▪ Company has staff and field workers with permanent employee status (X1.4)

2. Reliability (X2)

▪ Company is able to maintain its reputation in client environment (X2.1)

▪ Company have a good recommendation from a supervisory consultant (X2.2)

▪ Company provides transparent information regarding project development (X2.3)

▪ Company can shown decent work ethic (X2.4)

▪ Company must be able to fulfill its obligations under the contract (X2.5)

3. Responsiveness (X3)

▪ Company can be flexible with any changes request from client (X3.1)

▪ Company can handling client complaints (X3.2)

▪ Company have acceptable and approving solution by client during project

development (X3.3)

▪ Company give information access to client regarding recent update about project in

progress (X3.4)

4. Assurance (X4)

▪ Company can instill confidence in clients (X4.1)

▪ Company has competent technical staff (X4.2)

▪ Company staff able to answer all inquiries from clients (X4.3)

Company have enough manpower to deliver / complete project according to the schedule

(X4.4)

1. Empathy (X5) ▪ Staff can give special attention towards clients (X5.1)

▪ Understand client specific needs (X5.2)

▪ Put an effort to understand client’s general needs (X5.3)

▪ Project representative can be contact at any time (X5.4) 2. Perceived Service Quality (Y)

▪ Company meets administrative requirements in accordance with Standard

Operational Procedure (Y1)

▪ Company has an effective and efficient working system (Y2)

▪ Company can complete project according designated schedule (Y3)

▪ Company has system for handling complain from client (Y4)

▪ Company has competent human resources (Y5)

The validity of an instrument item can be determined by comparing the Pearson product

moment correlation index (r) with the 5% significance level with the critical value (Sugiyono,

2009). For Reliability The method used is Cronbach’s Alpha. A questionnaire / instrument is


13

considered reliable when Cronbach's Alpha value Cronbach’s Alpha > 0,6 (Kuncoro, 2013:181).

The following test results of the research instrument for each variable that we tested, can be

seen in the table below.

Table 5 Test Result Validity and Reliability of research instruments

Variable

Item

r

Sig

Information

Cronbach's

Alpha if Item

Deleted

Cronbach's

Alpha

Result

Tangibles (X1)

X1.1 0,405 0.000 Valid 0,776 0,805

Reliable

X1.2 0,611 0.000 Valid 0,745

X1.3 0,550 0.000 Valid 0,765

X1.4 0,437 0.000 Valid 0,738

Reliability (X2)

X2.1 0,709 0.000 Valid 0,677

0,736

Reliable

X2.2 0,821 0.000 Valid 0,627 X2.3 0,695 0.000 Valid 0,686 X2.4 0,729 0.000 Valid 0,696 X2.5 0,508 0.000 Valid 0,742

Responsiveness (X3)

X3.1 0,719 0.000 Valid 0,646 0,712

Reliable

X3.2 0,781 0.000 Valid 0,605 X3.3 0,696 0.000 Valid 0,668 X3.4 0,741 0.000 Valid 0,680

Assurance (X4)

X4.1 0,903 0.000 Valid 0,470 0,704

Reliable


Empathy (X5)

X5.1 0,640 0.000 Valid 0,644 0,669

Reliable


Perceived Service Quality

(Y)

Y1 0,489 0.000 Valid 0,659

0,639

Reliable

Y2 0,672 0.000 Valid 0,567

Y3 0,760 0.000 Valid 0,494

Y4 0,711 0.000 Valid 0,528

Y5 0,570 0.000 Valid 0,651

The table above describes the results of the validity and reliability test of the statement on all

servqual variables. To test the validity of Sig value. By Pearson Correlation nothing greater than 0,5 then all statement items are declared valid. As for the reliability test value by Cronbach's Alpha for each item statement has shown the value above 0.6 so it can be said that the reliability of the questionnaire is reliable or trustworthy.

In this research used multiple linear regression analysis to know the influence of

independent variable consist of Tangibles (X1), Reliability (X2), Responsiveness (X3),

Assurance (X4) and Empathy (X5) to one dependent variable that is Perceived Service

Quality (Y). Based on the data processing of the questionnaire results using SPSS 20.0

program obtained the results as in Table 6 below.


14

Table 6 Result for Multiple linear regression analysis

Model Unstandardized Coefficients Standardized Coefficients

t Sig.

B Std. Error Beta

(Constant) -4,107 1,414 -2,904 ,005 Tangibles ,672 ,105 ,461 6,399 ,000

1 Reliability

Responsiveness

,203

,097

,081

,065

,177

,079

2,496

1,493

,014

,139 Assurance ,408 ,093 ,299 4,383 ,000 Empathy ,122 ,072 ,104 1,685 ,095

a. Dependent Variable: Perceived service quality

Based on the regression results in the above table, there are 3 variables

(Responsiveness (0,139), and Empathy (0,095)) which have no significant effect (sig>

0,05) on perceived service quality. So with these conditions need to be re-modeling

(multiple linear regression) using 3 variables that significantly influence and eliminate

the 2 variables that have no significant effect. Here are the results of multiple linear

regression modeling without variable Responsiveness and Empathy. (Table 7).

Tabel 7 Result for Multiple linear regression analysis removing

variable X3 dan X5

Coefficientsa


t Sig.

B Std. Error Beta

(Constant) -2,754 1,287 -2,140 ,035

1 Tangibles Reliability

,674 ,218

,107 ,082

,462 ,191

6,306 2,650

,000 ,009

Assurance ,512 ,082 ,375 6,257 ,000

a. Dependent Variable: Perceived service quality

The statistical test F shows whether all the independent variables included in the

model have a significant influence simultaneously on the dependent variable (Kuncoro,

2013: 245). Decision making based on Sig value. Of F, if Sig. < 0,05 then Ho is rejected

(Ha accepted) and vice versa. After processing data using SPSS 20.0 program, then got

the result of F test as in Table 8 below.

Tabel 8 Result for F Test

ANOVAa

Model Sum of

Squares

df Mean

Square

F Sig

.

Regression 501,485 3 167,162 94,89

7

,000

b 1 Residual 169,105 96 1,762

Total 670,590 99

a. Dependent Variable: perceived service quality

b. Predictors: (Constant), Assurance, Reliability, Tangibles

Based on Table 8 can be seen that the value of F arithmetic with the dependent

variable perceive service quality of 94.897 with Sig. Of 0,000 (Sig. <0.05). Then Ho is

rejected and Ha accepted. Therefore, it can be concluded that tangibles, reliability and


15

assurance have a significant influence simultaneously on perceived service quality of

service from the clients in the local government of Gresik Regency.

The statistical of t-test has shown how far the influence of one independent variable

individually or partially in explaining the variation of the dependent variable (Kuncoro,

2013: 244). After testing, the following t test results in Table 9 below.

Table 9 Result From t Test

Coefficientsa


t Sig.

B Std. Error Beta

(Constant) -2,754 1,287 -2,140 ,035

1 Tangibles

Reliability

,674

,218

,107

,082

,462

,191

6,306

2,650

,000

,009 Assurance ,512 ,082 ,375 6,257 ,000

a. Dependent Variable: perceived service quality

Based on test results above the sig value for each Tangibles (0,000), Reliability

(0.009), and Assurance (0.000). It can be concluded that the three variables are

partially significant effect on perceived service quality of service users in the local

government of Gresik Regency.

The coefficient of determination (R2) is a device that measures how far the

model's ability to explain variations of bound variables. After processing data using

SPSS 20.0 program, then got the result as in Table 10 below :

Table 10 Coefficient of Determination Result

Model Summaryb

Model R R Square Adjusted R Square

Std. Error of the Estimate

Durbin-Watson

1 ,865a ,748 ,740 1,327 1,983

a. Predictors: (Constant), Assurance, Reliability, Tangibles

b. Dependent Variable: perceived service quality

From Table 10 it can be seen that the value of R Square (R2) is 0.748. Therefore,

it can be concluded that 74.8% of service users or clients in the local government of

Gresik Regency are influenced by tangibles, reliability and assurance while 25.2% are

influenced by other factors not examined. Here are the results of the classic

assumption test (Table 11) which includes normality test, multicollinearity,

heteroscedasticity, autocorrelation, and linearity using 3 servqual variables against

Perceived Service Quality.

Table 11 Classic Assumption Test

No. Classic Assumption Test Perceived Service

Quality Conclusion

1 Normality Test Kolmogorov- Smirnov Z

0,737 Residuals are normally distributed (> 0,05)

2 Multicollinearity Test

Tangibles VIF 2,044 VIF < 10 (Multicollinearity does not occur)

Reliability VIF 1,974 VIF < 10 (Multicollinearity does not occur)

Assurance VIF 1,369 VIF < 10 (Multicollinearity does not occur)

3 Heteroscedasticity Test


16

Tangibles Sig. 0,622 Heteroscedasticity does not occur (Sig > 0,05)

Reliability Sig. 0,642 Heteroscedasticity does not occur (Sig > 0,05)

Assurance Sig. 0,933 Heteroscedasticity does not occur (Sig > 0,05)

4 Autocorrelation Test Durbin- Watson

1,983 Autocorrelation does not occur (1,73 < DW < 2,27)

5 Linearity Test

Tangibles Linearity 0,000 Tangibles concluded has a significant linear relationship

Reliability Linearity 0,000 Reliability concluded has a significant linear relationship

Assurance Linearity 0,000 Assurance concluded has a significant linear relationship

SERVQUAL GAP

The servqual gap calculation of the statement attribute in the 3 servqual

dimensions (tangibles, reliability, and assurance) variables is all negative. Servqual

scores (-) negatively indicate that there is an indication of a quality gap on the quality

attribute. While servqual score (+) positive indicates the quality of the quality is quite

satisfying customers. The result of servqual score (service quality) can be seen in

table 12.

Table 12 Servqual Gap Calculation

Variable

No.

Statement Instrument

Perceived

Service (X)

Expected

Service (Y)

Servqual

Score

Tangibles

X1.1 The company's technical expertise can be applied according to project needs

3,36 4,57 (1,21)

X1.2 The office / workshop has adequate working facilities 2,98 4,55 (1,57)

X1.3 Project facilities and infrastructure can support project operation

2,74 4,51 (1,77)

X1.4 Staff and workers work effectively and efficiently in project operation

3,54 4,59 (1,05)

Variable

No.

Statement Instrument

Perceived

Service (X)

Expected

Service (Y)

Servqual

Score

Reliability

X2.1 The company has a good reputation in the Gresik Regent Government

3,26 4,37 (1,11)

X2.2 The company has good quality references from supervisory consultants

3,64 3,95 (0,31)

X2.3 Companies regularly and periodically submit project progress reports

2,81 4,25 (1,44)

X2.4 The Company demonstrates good work ethics in the process of project work

2,94 3,75 (0,81)

X2.5 The company is able to keep promises in accordance with the commitments stated in the contract

3,42 4,67 (1,25)

Assurance

X4.1 Proposal of service provider's offer able to increase client confidence

2,09 4,65 (2,56)

X4.2 The company's technical presentation indicates that the staff has good technical skills

2,82 4,82 (2,00)

X4.3 Client curiosity can be answered well by service provider staff

2,13 4,88 (2,75)


17

X4.4 The company was able to complete the project on time due to the availability of sufficient workers

3,28 4,83 (1,55)

The calculation results showed that the service user is not satisfied with the

quality of services provided by the service provider in this case is CV BSHB. After

finding servqual score further analysis of the perceptions. This analysis is used to

determine the position of service quality attribute of the company based on the service

user's opinion about the level of perceived service (perception) and expected service

(expectation / expectation). In addition, it can also be used to identify the actions that a

company must perform with regard to the position of the attribute. Data value of

perception and expectation level and location of quadrant of each attribute can be seen in

Table 13. While the cartesius diagram result of elaboration can be seen in Figure 2.

Table 13 Result Data value of perception and expectation

Variable No. Statement instrument Perceived

Service (X) Expected

Service (Y) Quadrant

Tangibles

X1.1 The company's technical expertise can be applied according to project needs

3,36 4,57 II

X1.2 The office / workshop has adequate working facilities

2,98 4,55 I

X1.3 Project facilities and infrastructure can support project operation

2,74 4,51 I

X1.4 Staff and workers work effectively and efficiently in project operation

3,54 4,59 II

Reliability

X2.1 The company has a good reputation in the Gresik Regent Government

3,26 4,37 IV

X2.2 The company has good quality references from supervisory consultants

3,64 3,95 IV

X2.3 Companies regularly and periodically submit project progress reports

2,81 4,25 III

X2.4 The Company demonstrates good work ethics in the process of project work

2,94 3,75 III

X2.5 The company is able to keep promises in

accordance with the commitments stated in

the contract

3,42

4,67

II

Assurance X4.1 Proposal of service provider's offer able

to increase client confidence 2,09 4,65 I

X4.2 The company's technical presentation indicates that the staff has good technical skills

2,82 4,82 I

X4.3 Client curiosity can be answered well by service provider staff

2,13 4,88 I

X4.4 The company was able to complete the project on time due to the availability of sufficient workers

3,28

4,83

II

Variable No. Statement instrument Perceived

Service (X) Expected

Service (Y) Quadrant

Mean 3,00 4,49


18

Figure 2 the attribute description in Cartesian diagram

Conclusion

This research is done by distributing its instrument/ questionnaires to 100

respondents as samples of the populations both active officers and public servants of

Gresik governmental regent. From the data analysis used SPSS 20.0 program, hence the

conclusions can be elaborated as follows :

Tangibles partially influences significantly towards the servqual gap of its clients in

Gresik governmental regent.

Reliability influences significantly towards the servqual gap of its clients in Gresik

governmental regent

Responsiveness partially does not influence significantly of its clients in Gresik

governmental regent

Assurance influences significantly towards the servqual gap of its clients in Gresik

governmental regent

Empathy partially does not influence significantly of its clients in Gresik

governmental regent.

Suggestions

The results of this research have shown that there three of five servqual dimention :

tangibles, reliability, and assurance are the influential variables of perceived service

quality. To acquire the result of managerial implications which also have three specific

variables organized and analyzed by applying importance- performance (IPA). The

tangibles improvement plan can be explained below:

1. The procurement of A3 printing: this printing machine is aimed to enhance the

distribution of A3- sized printed pictures within half day for clients and the field

workers.

2. The Procurement of project appliances (grinder and cutter): the additional stock for

one unit can effectively involve the number of its workers for two personnel. By

having appliances the service can be done in half day.

3. Direction keet : Companies need to create design and build a direction keet with


19

size 3 x 6 m. The area of the board of directors provides benefits to the worker in

order to store material, project equipment and private goods with more organize.

4. Commercial vehicles : The ownership of commercial vehicles with this type of

pickup is needed by the company in order to make distribution and mobilization of

project equipment more quickly without having to hire a freight service provider.

Plans related to improving the skills of employees and project workers are embodied in

managerial implications for assurance variables. The first step that companies need to

take is that companies need to create an implementation manual in each project handled

by the company. Technical staff need to learn the process of project implementation

through the manual and companies need to provide training on handling the problems

faced in project implementation. Through this training is expected to increase staff

maturity in recognizing the stages and constraints that occur within the project.

SUGGESTIONS FOR FURTHER RESEARCHERS

To obtain a more precise result, researchers who will conduct similar research are

advised to explore the literature review and other studies to find other variables that can

improve the concept / model of servqual. If the researcher is an employee or owner of the

company to be investigated, you should use the services of consultants who usually

carry out research professionally. This will increase the honesty of the respondent's

answers and will ultimately increase the objectivity of the study. Limitations in this study

is the use of five servqual variables for research types of construction service business

operating in the local government of Gresik Regency is still not enough. And the result of

the coefficient of determination shows that 74.8% of perceived service quality is

influenced by three independent variables (tangibles, reliability and assurance), and there

are 25.2% which can be predicted by other variables not examined in this study.

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http://dx.doi.org/10.4236/health.2014.65041


21

FACTORS AFFECTING THE SUCCESION PROCESS OF THE

FAMILY BUSINESS IN EAST JAVA, INDONESIA

1Sasongko Basuki, 2J.E. Sutanto♠


INDONESIA

Email : [email protected]

ABSTRACT

The purpose of this research is to analyze the factors affecting the succession

process in the family business in East Java, Indonesia. The variables used in

this research are succession planning (X1), preparation of heirs (X2),

relationships among family members (X3) as independent variables while

succession process (Y) and post transition business performance (Z) act as

dependent variables. Questionnaires are used to collect the study data.

Additionally, quantitative analysis with path analysis is used as analysis tool.

The population in this study is medium and large scale family business in

Surabaya, Sidoarjo, Mojokerto, Pasuruan, dan Gresik. Samples are taken

from 43 family businesses with total employment of minimum 20 and have

performed at least one generational transition.

The statistic analysis findings reflect the non-significant relationship between

succession planning and preparation of heirs towards successful transition.

While relationships among family members gives the most significant

influence on the successful transition, as well as the significant influence

between succession process to the post transition performance.

Keywords: succession planning, preparation of heirs, relationships among

family members, succession process, post transition business performance

INTRODUCTION

Family business takes important role in the global business in the world as they rule more than

80% of total world economy and approximately 75% of world’s gross domestic product (GDP)

(Pousa,2007). The same situation occur in Indonesia where 96% or 159,0000 out of 165,000

companies in Indonesia are family managed businesses (Pikiran Rakyat, 2006) and contribute to

82.44% of national gross domestic product (Suara Merdeka, 2010).

Indeed not many family business can survive and grow from generation to generation.

According to Family Business Editor Review in United States of America only 30% can survive

until the 2nd generation, 12% up to the 3rd generation, and only 4% surviving up to the 4th

generation and below (Astrachan, Family Business Editor Review). Meanwhile in Asia only

33% can survive until the 2nd generation, 15% up to the 3rd generation, and only 9% surviving

up to the 4th generation and below (INSEAD InnovAsia’s Team, 2006). In Indonesia, similar

situation occur where 78% of family business are run by the founder, while 15% run by 2nd

generation and only 7% by the 3rd generation according to a survey done by Jakarta Consulting

Group.

Family business faces some challenges such as the conflicts of business value and direction

among founder and the successors, the differences of characters and expectation among family

members in making decision, position and remuneration for the family members involved in the



22

business and the lack of long term planning in the family business. Therefore it is necessary to

plan a succession process in order to maintain the continuity growth of the family business and

to keep a good relationship among the family members. According to research by KPMG

enterprise (2011) main key of a succession process is comfortable level between two party, i.e

meeting the expectation of the founding generation and the acceptance of successor on the

family business rules about management’s responsibility, compensation, profit sharing, etc.

LITERATURE REVIEW

The definition of a family business itself is effectively described by Davis (1983) as an

organization where its policies and management is strongly influenced by one or more family

members. Because family itself plays such a significant role in the company, family business is

generally believed to be resistant to change by being overly dependent on family values.

Balancing between optimum company expansion and fulfillment of family needs is also a

constant challenge for family businesses (Palacios et al, 2013). The succession process for the

next generation is inevitable for a family business, yet only a few could survive. More than 70%

of businesses died out after the second generation, with the number increasing to 90% after the

third generation. A few important components of a long-lasting family business can be seen

below.

First, a detailed long-term plan is needed to ensure the process runs smoothly. A sufficient plan

will allow the company to set out a process to determine the most suitable inheritor, including a

specific time frame for the entire procedure. Ideally the company will also need to involve

outside opinion and consultation, and make sure that everyone involved in the company is

aware of the succession that is about to take place.

The second crucial step is preparing the future generation and making sure they have the

managerial and leadership capabilities needed to lead the company. Some good preparation

strategies include providing high-level education, exposing candidates to work experience

outside the family business, and one-on-one mentoring from the senior to the successor to

transfer the company vision and mission.

Third is maintaining a healthy relationship between the senior and the successor, especially

during the transition period. Either an unwillingness by the incumbent to part with the powerful

role in the company, or an unwillingness by the successor to learn from their seniors can cause

substantial issues during the succession. It is vital for successors regardless of their education

level to learn firsthand from their seniors in managing the company, because those skills can

never be learned through formal education alone.

A fourth key component is regular communication among family members, which can reduce

the risk of conflict both in the business and in the family. Regular meetings among all family

members involved must be done to make sure everyone is on the same page. Indications of

positive communication include the presence of clear rules and boundaries among members, the

ability to solve disputes effectively and the presence of unified support from all family members.

(Morris, 1997)

This study judges the success of a family business succession through the following criteria: the

increase in company sales, the increase in the number of employees, the increase in company

assets, and new product availability and growth in market share.

Prior to the writing of this paper, extensive research had already been conducted on the concept

of the family business and the components that contribute to its success. A study by Palacios et

al. (2013) found that family-oriented businesses tend to view their company as a means for

family members to gain a living, placing more emphasis on providing jobs for family members

as opposed to thinking about the company legacy and recruiting the best professionals for

important leadership roles. Another study by Wang et al. (2004) was conducted to small-middle


23

scale family businesses (having maximum 250 employees) in UK to identify the relationship

between succession issues towards the business performance of the company. In Italy Bigliardi

and Dormio (2009) performed a study to identify the contributing factors of successfully

inheriting a family business. Having a well thought out succession plan over an extended period,

keeping a well-educated family background, and enforcing strict rules by sticking to family

values are a few aspects that are highlighted to ensure a successful generational change in a

family company.

HYPOTHESIS GENERATION

Based on earlier discussion and using the factors of family business succession have been

identified by researcher i.e: succession planning (X1), preparation of heirs (X2), relationships

among family members (X3) as independent variables while succession process (Y) and post

succession performance (Z) act as dependent variables , below model is generated:

Figure 1.The conceptual model

Source : adapted from Wang et al. (2004)

H1 : Succession planning is positively related to succession process

H2 : Preparation of heirs is positively related to succession process

H3 : Relationship among family members is positively related to succession process

H4 :Succession planning, preparation of heirs, and relationship among family members are

simultaneously related to succession process

H5 : Succesion process is positively related to post succession business performance

RESEARCH METHODS

This descriptive quantitative research uses survey method towards the population of medium to

big scale family business –using the indicator of Biro Pusat Statistik i.e: hiring more than 20

employees- in Indonesia that have survived at least one transition or succession in the business.

Surveys were done in some area in East Java province including Surabaya, Mojokerto, Pasuruan,

and Gresik area within the time frame in July-October 2015 collecting data from 73 family

businesses. Independent variable of succession planning (X1) using in the research are measured

by indicators such as B1 the selection process of heir, B2 definition of time span, B3 hiring of

consultant, B4 stakeholder awareness, B5 company rules about succession. Preparation of heirs

(X2) used indicators of B6 formal education, B7 mentoring and training, B8 working experience

outside the family business and B9 entry position. Independent variable X3 (relationship among


24

family members) used some indicators such as B10 open communications, B11 regular meeting

among family member involved in the business, B12 regular gathering among family members

involving and not involving in the business, B13 family business rules, B14 mechanism of

conflict resolution, B15 support of family members towards family business, B16 formal

discussion of family members involved in the business, B17 formal discussion of family

members involved and not involved in the business, B18 rules for the family members in

relation to the business. Meanwhile the dependent variable Succession Process (Y) uses some

indicators such as C1 time span of succession, C2 successful transition, C3 willingness to

delegate authority and control to the heirs, C4 control of business is taken by heirs. The other

dependent variable Post Succession Business Performance (Z) is measured by indicators D1

sales growh, D2 employee growth, D3 asset growth, D4 product line growth and D5 market

share growth.

A questionnaire with cover letter was sent to the managing directors of these family businesses

of total 126, while 105 replies were received. Quantitative data analysis was done after all

questionnaires collected and data were classified, tabulated and coded in order to be processed.

However before data analysis was done, some instrument tests were performed i.e: validity test

with Pearson correlation method and reliability test with Cronbach’s alpha method. Path

analysis was performed to examine the influences of intervening variables dan to determine the

relationship pattern among three or more variables (Latan and Ghozali, 2013). This technique is

used to measure the contribution showed by path coefficients in every path diagram of causal

relationship among variables X1, X2, and X3 towards Y and the influence to Z.

The calculations of path analysis using inter variables causal effect decomposition model will

result in direct causal effects, indirect causal effects and total causal effects. The t-statistic test

will be performed in order to test the hypothesis H0 (the independent variable not significantly

influence the dependent variable) and Ha (independent variable significantly influence the

dependent variable). According to Ghozali(2012) if T statistics > 1.96 H0 is rejected and Ha is

accepted and if T statistics <1.96 thus H0 is accepted and Ha is rejected. Next step is to examine

the coefficient of determination, denoted R² or r² and pronounced R squared, is a number that

indicates how well data fit a statistical model – sometimes simply a line or a curve. An R² of 1

indicates that the regression line perfectly fits the data, while an R² of 0 indicates that the line

does not fit the data at all.

RESULTS AND DISCUSSION

The data for the purpose of this study was taken from middle to large scale family industries in

the Surabaya, Mojokerto, Sidoarjo, Pasuruan and Gresik area with indicators of having over 20

employees and which has experienced the succession process at least once. In total, data from

73 companies were used for this research.

There are a few ways to categorize the respondents used for this study. Based on the number of

successions, most of the respondents interviewed (58.14%) have only went through one

succession, while 32.56% had experienced succession twice. Based on company lifetime,

companies that have been established 30-39 years make up 32.56% of the collected data,

followed by 10-19 years with 23.26%, 20-29 years with 18.60% and 40-49 years making up

16.28% of the data. Based on position within the company, 48.83% of the respondents take up

the position of Director within their companies, while those who are Owners and Managers of

the company each make up 18.60% of the data.


25

Table 1. Characteristic of respondents

Number of

Successions

Company Type

Total

% Trade Industr

y

Servic

e

Property

1 6 7 9 3 25 58,14

2 3 5 6 - 14 32,56

3 1 1 1 - 3 6,98

4 - 1 - - 1 2,32

Total 10 14 16 3 43 100

Company

Lifetime

Company Type

Total

% Trade Industry Service Property

0-9 - - 1 - 1 2.32

10-19 - 2 7 1 10 23,26

20-29 3 1 3 1 8 18,60

30-39 5 5 3 1 14 32,56

40-49 1 4 2 - 7 16,28

60-69 - 1 - - 1 2,32

70-79 1 - - - 1 2,32

90-99 - 1 - - 1 2,32

Total 10 14 16 3 43 100

Position Company Type

Total

% Trad

e

Industry Service Property

Director 5 9 6 1 21 48,83

Commissioner 1 2 - - 3 6,98

Manager 1 - 5 2 8 18,60

Other - 1 2 - 3 6,98

Owner 3 2 3 - 8 18,60

Total 10 14 16 3 43 100

To make sure all the variables used in this study are accurate, we apply the validity and

reliability test. From the validity test using the Pearson bivariate correlation method, it is found

that all indicators from variables X1, X2, X3, Y and Z are valid.

The reliability test is also done to measure how reliable the indicators are when measuring large

samples of data using the Chronbach’s Alpha method. From the reliability test on X1, we found

that variables B1 and B3 are not reliable and will not be used for this paper. The test on X2

shows that variable B6 is not reliable, while variables B8 and B9 are reliable and will be used.

For X3, all variables B10-B18 are reliable. For Y, variables C1-C3 are reliable, while C4 is not.

Last for Z, variables D1, D3, D4 and D5 are reliable and is valid for use for this paper.

After the reliability and validity test, a path analysis is done to evaluate the direct relationships

between the variables. Planning of Succession (X1), Preparation of the Successor (X2), and

Relationships between Family Members (X3) is discovered to be directly related to the

succession process (Y). The succession process (Y) is directly related to Business Performance

(Z). By looking at the coefficients of the path analysis diagram, we can draw conclusions

whether the variables are closely related (with T-statistics of >1.96) or not closely related (T-

statistics of <1.96).


26

Figure 2. Path analysis diagram

In this case, the variable for Succession Planning (X1) is not significantly related to the

Succession Process (Y) because it has a T-statistic of 1.178232 (<1.96). However, a positive

original sample value of 0.228142 shows that Succession Planning still has a positive influence

towards the succession process. A proof that can be seen is that business owners from around

East Java have not considered hiring consultants to help them prepare for the succession

process. Therefore, there are no strict rules in place regarding the succession process of their

businesses.

Likewise, the variable for Preparation of the heirs (X2) does not have a major influence toward

the succession process (Y) as it has a T-statistic of 0.984663 (<1.96), but a positive original

sample value of 0.183329 still makes it have a positive influence for a successful transition.

From the responses received the level of education of the successors is not vital in ensuring

success. Rather, getting the right guidance and management advice from their predecessors is

much more important for the successors during the takeover period.

On the other hand, Relationships among Family Members (X3) has a considerable influence

toward the succession process (Y) with a T-statistic of 2.961620 (>1.96) and a positive original

sample value of 0.403622. A majority of respondents agreed that a friendly and open

relationship among family members, along with the unified support from all family members is

vital for the success of a family business succession. In addition, organizing meetings from time

to time with all family members involved in the business is important to keep everyone aware of

the current business situation.

Finally, the succession process (Y) also has a tight correlation with post succession Business

Performance (Z) with a T-statistic of 6.46779 (>1.96) and a positive relationship with an

original sample value of 0.602796. The success of a family business post succession can be

measured by how the previous generation ownership is able to smoothly hand over the duty and

responsibility of leadership to their successors, as according to what has been planned

beforehand.

Table 2. Path coefficient result of path analysis

Original

Sample

(O)

Sample

Mean (M)

Standard

Deviation

(STDEV)

Standard

Error

(STERR)

T Statistics

(|O/STERR|)

Family Relationships

(X3) -> Succession

Process (Y)

0.403622 0.383294 0.136284 0.136284 2.961620


27

Succession Process (Y)

-> Business

Performance (Z)

0.602796 0.595257 0.093200 0.093200 6.467779

Preparation of heirs

(X2) -> Succession

Process (Y)

0.183329 0.192469 0.186184 0.186184 0.984663

Succession Planning

(X1) -> Succession

Process (Y)

0.228142 0.241250 0.193631 0.193631 1.178232

Through the R square method, it is found that the variables of Succession Planning, Preparation

of heirs and Relationships among Family Members (X1, X2 and X3) make up 49.51% of the

main components for the succession process (Y) while the other 51.49% are made up of

variables that are not identified in this paper. Using the same method, the succession process

(Y) is found to have an influence towards Business Performance (Z) by 36.34%, with the other

63.66% coming from other factors not discussed in this paper.

From there, we identify the direct and indirect effects for each variable. The direct effects of the

variables X to Y and Y to Z are found from the path analysis coefficients. The indirect effects of

variables X to Z (via Y) can be calculated by multiplying the values for each X variable by the

value of the Y variable. The total effect towards Z for each variable, then, is just the direct effect

and indirect effect added together. The total effect for each variable towards Business

Performance can be seen from the table below.

Table 3. Total effect of path analysis

Direct Effect Indirect Effect

Total Effect

(Z) Succession

Process (Y)

Business

Performance

(Z)

Business

Performance (Z)

Succession Planning

(X1)

0,228142 - 0,146661 0,374803

Preparation of Heirs

(X2)

0,183329 - 0,110510 0,293839

Relationships among

Family Members (X3)

0,403622 - 0,243301 0,646923

Succession Process (Y) - 0,602796 - 0,602796

There are a few limitations that can be pointed out from the results of the study above. First is

the size of the sample population used, which is comparatively small. Some of the data received

were not valid as different companies were experiencing various parts of the succession process.

Because of the difficulty to find viable interviewees, the researcher had to interview some

companies that have yet to complete a full succession. Second is the inability of the respondents

to answer the questions accurately. The main reason for this is that family business owners tend

to keep the details of their succession process a family secret. Some of the questions, however

general, may be considered as too sensitive to be answered accurately by the interviewees.

Lastly, the limited time that was allocated to data collection caused some of the data to not be

received on time for the purposes of this study.

CONCLUSION

Succession Planning (X1) has a positive influence but is not significantly related to the

Succession Process (Y). One of the major factors contributing to this is due to the majority of

sample size or up to 93% being relatively new family businesses established under 50 years ago,


28

and only 58% of the entire sample having gone through only 1 succession. In this case, this first

succession process only involves a few members of the inner family circle and almost occurs

naturally. This also reflects the study from Wang et al. (2004) where the succession process

does not significantly affect business performance for small-scale family industries. However,

as the company grows bigger and more family members are involved, a more systematic

approach is needed in preparation for the succession process in the form of educating and

mentoring.

Healthy relationships among family members in the form of continued support, open

communication, clear division of roles and responsibilities and effective conflict resolution

strategies can do wonders to ensure the success of a succession process and improve business

performance in the post-succession period.

The wide scope of respondents used in this study causes the data to be more spread out,

reducing the reliability in some areas. The variety of respondents include businesses from

trading, services, industries and real estate with some only being established 10 years to others

who have been in business for 100 years.

One of the greatest challenges in running a family business is the discipline to follow rules that

have been agreed upon, especially among family members due to the intimate nature of the

relationship. Being overly tolerant and giving special treatment to members of the family will

provide a negative effect in the long run. Things will be different if the same regulations are

carried out by professionals. As a result, hiring professionals to operate in the management of

the family business is a great solution to solve internal conflicts, provide outside opinion and

provide an overall balance for the company after succession.

REFERENCES

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York, NY.

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Bigliardi, Barbara and Alberto Ivo Dormio (2009). ‘Successful generational change in family

business’. Measuring Business Excellence Vol.13 No.2, pp.44-50.

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Enterprise Publishers.

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Program SmartPLS 2.0 M3. Semarang: Badan Penerbit Undip.

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of success in family business transitions’. Journal of Business Venturing Vol.12, pp.385-

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Nisfianoor, Muhaman. (2009). Pendekatan Statistika Modern untuk Ilmu Sosial. Jakarta:

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Palacios, Tomas M.Banegil; Ascension Barroso Martinez & Juan Luis Tato Jiminez (2013).

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EFFECT OF ATTITUDE, SUBJECTIVE NORMS, AND

ENTREPRENEUR BEHAVIOR CONTROL ON SME’S ATSABE

COMMUNITY BEHAVIOR WITH ENTREPRENEUR INTENTION

AS MEDIATOR VARIABLE

1Manuel Goncalves, 2J. Nirbito♠

Ciputra Univercity Surabaya

INDONESIA

Email: [email protected], [email protected]

ABSTRACT

The purpose of this research is to examine and analyze the influence of attitude,

subjective norms, and perceived behavior control on SME’s atsabe community

behavior with entrepreneur intention as mediator variable. The research is

research causal by adopting quantitative approach. A population that used in

the research is are SME’s agents in Atsabe, Timor Leste by the number of as

many as 1,300 people.Technique the sample collection in this research was

purposive sampling and the number of respondents used in this research

determined by using slovin formula.Technique data collection was carried out

by interviews, survey and documentation. Technique analysis was conducted

using analysis structured equation model (SEM) partial least square (PLS).The

results of the study indicating that attitude, subjective norm and perceived

behavior control have had a positive impact and significant impact on SME’s

atsabe community behavior, in Timor Leste. In addition, perceived behavior

control also have a positive impact and significant impact on SME’s atsabe

community behavior, in Timor Leste.

Keyword: Small Medium Entreprises, behavior, attitude, subhective norms,

perceived behavior control.

INTRODUCTION

Now the activity entrepreneurial traits that encouraged by many regions is small and medium

entreprises programs (SME). It because the SME had already been assessed having a resistance

relatively better than with effort a larger scale. The role of umkm are also highly strategically

important in terms of various aspects. First, the number of its industry a great and there are in

every sector of economic. Second, the potential that is great in creating more employment

opportunities compared with the investment that same at a venture with scales greater. Third,

contribution SMEs in it was reflected from gdp significant. Fourth , having donation to foreign

exchange the state with the export value are fairly stable (Hadiyati, 2011). The empowerment of

SME, will also capable of engendering a flagship program of program entrepreneurship and

existing partnership .

SME in indonesia arranged on constitution no. 20 years 2008 who classifies micro business is

business have criteria having net assets most of fifty million rupiah, except land and building,

and having earnings a year the most three hundred million rupiah, small businesses is the

business that have criteria net assets more than fifty million rupiah up to 500 million rupiah, and

having results sales were from 300 million rupiah to 2.5 billion rupiah a year, while medium



31

enterprises menpunyai criteria having net assets more than rp 500 million up to rp 10 billion and

earnings were 2.5 billion rupiah up to 50 billion rupiah a year. In Timor Leste, SMEs arranged

on the act of no. 5 of year 2005 and can be seen in Table 1 follows:

Table 1 The classification of SME in Timor Leste

No Criteria Asset

($)

Rendimento Annual

($)

1 Micro Empresa 100 ate 5.000 6.000

2 Medio Empresa 5.000 ate 100.000 6.000 ate 500.000

3 Alto Empresa 100.000 ate 1.000.000 500.000 ate 5.000.000

Sumber: MoF, Imposto Timor Leste

Timor Leste was one of the countries in Asean having dependence on natural resources as main

source of revenue the state. The main commodities be main source of revenue Timor Leste is oil

and gas.This shown through the data is presented in Figure 1 follows:

Figure 1. The Prediction GDP Timor Leste from oil and gas on 20 years.

Source: (Kementrian Perencanaan dan Keuangan-RDTL, 2005)

Figure 1 shows that the contribution of oil and gas to state revenues reached more than 90% or

more precisely of 94%. This condition and pushing level demand job high in the oil sector and

gas.But, private companies also is not optimal to do investment because security conditions and

politics in east timor not yet stable. This led unemployment rate in Timor Leste increased.

Unemployment rate consisting of productive age between 15 up to 35 years. Researcher find

that economy of Timor Leste divided between the non oil and gas, which is agriculture, and oil

and gas. The 11% from age productive work in the agricultural sector, which was taken from

76,899 the Timor Leste population, who exertion on the agricultural sector and others workers

was between 40 to 55 years, with most of them still depends on agricultural production

subsystem .According to SEPFOPE (Secretaria de Estado The Formacao Prefesional e

Emprego), through force survey work done in 2013 unemployment in east timor to 11 % of the

total productive age as many as 699,620 people of the population as many as 1.212.107 million

people, where consisting of male are 618,789 and female are 593,318 (source: Satistic East

Timor The Population Projection 2014).

Readiness of youth people Timor Leste to labor market, if there was a progress in the education

sector, but still too many young people at adulthood without education, about 20 percent youth

people of Timor Leste is, only 12 percent who completed secondary education and succeeded in

continuing their studies to college. The unemployment rate in Timor Leste also caused by the

more youth educated who aspires to leave sectors traditional and not formal, in particular the

agriculture. Similarly, the impact of economic growth in the future to employment opportunities

promised because the private sector do not increase and almost does not develop the last few


32

years. It’s not really simple in solving the unemployment rate in Timor Leste is a problem

happened since three decades ago, but some field who promised can identified with consider the

prospect of natural resources and opportunities demographic faced by Timor Leste in to

overcome the problem of unemployment. Solution can try to get out of the complexity problems

above demanding thoughts and actions creative and innovative, achieved through the creation of

entrepreneurial young in the quantity and quality of sufficient.

Entrepreneurial contribution in timor leste was significant, this can be seen from the receipt of

the state tax sourced from SME, count of 2012 until 2015 $198,072,270.05. This contribution

only come from 5,557 SME’s entrepreneurs who is active, while in the ministry of industry

trade and environment the number of investors micro and small entrepreneurs who teregistrasi

as many as 9,722. (source: The Department Of Taxation And The Department Of Commerce In

Town), when calculated on a mathematics means that there are 4,165 SME entrepreneurs who

were not contribute to government income sourced from tax.

Tracing desire for knowledge or the initiative of the entrepreneurship of Timor Leste people,

researcher convey in this scientific, that there are several municipio the city madia in Timor

Leste is the famous with a entrepreneurship, of them are municipio ermera, exactly posto

administrativo municipio Atsabe .Atsabe is one of areas in Timor Leste that having the number

of entrepreneurs reached 10 % of the total the population as shown by table 2 the following.

Table 2 The population of Atsabe

Male Female

10.034 3.897

SME’s entrepreneur are 1.393 (10%)

Mostly people of atsabe was not a a graduate of a college who has knowledge and skills from a

stool in entrepreneur lecture and concentrate on entrepreneurship, but factors that located within

the around which affect the pattern he thought to be an entrepreneur. The environment around

which mostly comes the community who also work as entrepreneur teaches about knowledge

and skills being entrepreneur.

The study is done to analyze behavior entrepreneurial traits that doing the atsabe by using

fundamental principle of the theory behavior the theory planned behavior. Conceptually tbp said

three determinan intention is independent. First is attitude, is a pattern of behavior, tendention,

predisposing to to fit in social situation, or simply too are defined in response to social

stimulation which have been conditioned (Musdalifah, 2015). Then there is subjective norm

which is a social pressure that was felt to be to do or behave certain (Mahmoud et al, 2015). The

third of the determinan intention according the concept of TPB is perceived behaviour control,

is a variable showing easy or the difficulty of doing of an act which referred to (Firmansyah,

2013).

The Objectives of Study

The objectives of this study are:

1. To know and analysis the influence of entrepreneur attitude against entrepreneur

intention of Atsabe people.

2. To know and analysis the influence of subjective norm against entrepreneur intention of

Atsabe people.

3. To know and analysis the influence of perceived behaviour control against entrepreneur

intention of Atsabe people.

4. To know and analysis the influence of entrepreneur intention against entrepreneur

behavior of Atsabe people.

5. To know and analysis the influence of perceived behaviour control against entrepreneur

behavior of Atsabe people.


33

LITERATUR REVIEW

Theory of Planned Behavior

Theory of planned behavior (TPB) developed by Ajzen as the expansion of theory of reasoned

action (TRA). TPB is the conceptual framework that used to scrutinize the conduct individual

which in theory of planned behavior allow it can be seen factor that influences individual

decisions in behave so that it can be said an individual in behave based on taking into account

rational (Kumar, 2012). TPB is model resulting from tra by assuming that certain behavior

determined by intention of actually doing it. TPB as the expansion of tra because in TRA there

is no components control behavior felt, so that TRA model difficulty in clarifying conduct of

one who not having control over his behavior (Mok & Lee, 2013). TPB explained that conduct

of one determined by intention behavior. In TPB components an attitude toward behavior and

subjective norm have in common with the theory TRA, but in TPB added perceived behavior

control as a component that determines intention behavior.

Intention behavior is the size of individual willingness to do desired behavior. Based on thought

TPB model, so intention behave is strong predictor determine behavior. Someone who

intentional behavior high will allow the person engages or undertakes these behaviors are (Mok

& Lee, 2013). TPB consisting of three variable, which is determinan that determines intention

behave someone, namely:

1. The first variable is attitude, that define as the extent to which someone evaluate or

judge these behaviors are profitable or not, agreeable or disagreeable, good or bad,

dangerous or beneficial, like or dislike towards an object will mediate all responses to

the object. Become determinan attitude that determines intention behave someone

(Hasbullah et al, 2014). Attitude are steps from the belief conduct of one, this is a

function individuals who feel that they have the possibility of the result of behavior that

will be done as well as their evaluations (Mok & Lee, 2013).

2. The second variable is subjective norm, that define as a reference that originated in the

neighborhood of social impact a person in behave. TPB suggested that someone could

be certain based on what is expected others on the person .People can have good

manners towards an object certain, but if any pressure from others not to do it, so that

person will be have a negative attitude (Hasbullah et al, 2014). A subjective norm

measuring the effects of the influence of social given on individual (Mok & Lee, 2013).

3. The third variable is perceived behavior control, namely feel ease or trouble in carrying

behavior. Behavior felt can be a reflection of a creed against the resources and the

chance to make any specific behavior (Hasbullah et al, 2014). Perceived behavior

control is size of perception someone about ease and difficulty where they were certain

behavior. The extent to which someone succeeded in changing behavior intention to

conduct actual relies heavily on the control of behavior felt (Mok & Lee, 2013).

Entrepeneur

Entrepreneur is someone who develops of a new product or a new idea and build business with

a new concept. In this case will require a number of creativity and a the ability to see patterns

and trend-trend that apply to be an entrepreneur (aprilianty, 2012). Sonny et. al (2012) clear that

entrepreneur is a soul take risks to open a business on a number of occasions, independent and

will begin to business, without over to the fear or anxious even in the condition uncertain. Based

on a number of understanding about entrepreneur can be explained a entrepreneur having in the

ability to change things for the better or created seseuatu an entirely new, soul creative and

innovative.

Behavior business expressed by Thobias et al, (2013) as spirit, the ability, attitude, behavior

individual in handling businesses or activities that leads to the effort to recruit, created, apply


34

how to work, technology, and new products with improve the efficiency in order to give better

service and or make a profit greater.

Behavior approach in the concept of entrepreneurship like approach trait is emphasized behavior

whatever dominated in entrepreneurship successful. In this approach, myths about

entrepreneurship be broken.For example that entrepreneurship not can be learned. It approach

behavior is emphasized an opportunity for anyone to learn entrepreneur (Helmi, 2011). Based

on a number of the discussion definition entrepreneurial behavior, so can be concluded that

behavior entrepreneur man is actions that can be measured performed with courage, eminence

and strength in meet the needs and issues concerning activities business with capability and

power derived from itself.

Small Medium Entreprises (SME)

Anggraeni et al, (2013) describing on small and medium entreprises as follows:

1. Micro business is a productive belonging to someone individuals and or business entity

individuals meet the criteria micro business as regulated by law.

2. Small businesses are productive economic undertakings that stands alone, practiced by the

individuals or business entities that are not is a subsidiary or not the branch company

owned, controlled, or become a part either directly or indirectly of an effort middle class or

big enterprise that meet the criteria small businesses as stipulated under the law.

3. Medium enterprises is a productive economic that stands alone, practiced by the

individuals or business entities that are not is a subsidiary or branch company owned,

controlled, or become a part either directly or indirectly with small businesses or great

effort with the total net assets of or result annual sales as are regulated in the law of.

Based on the meaning of on top can explained that SME is a form of productive

economic undertakings practiced by the individual or business entity individuals meet the

criteria micro business, small, and medium business. Based on the literature review above, the

conceptual and thinking framework for this study can be illustrated as the Figure 2 and Figure 3.

Figure 2 Thinking Framework

Literature Review:

1. Theory Planned Behavior

2. Entrepreneurship

3. Small and Medium Entreprises (SME)

Research Questions: Whether entrepreneur attitude, subjective norm, perceived behaviour control have

influenced againts entrepreneur intention and entrepreneur behavior of Atsabe people?

Penelitian Terdahulu:

1. Gopi & Ramayah (2007)

2. Dahalan et al., (2015

3. Handaru et al., (2014)

4. Amin, (2015

Data Analysis and The Result

Conclusion, Implications and Suggestions

Hypothesis

Research Background: High rate of unemployment and lack of employment opportunities available

in the city atsabe, timor Leste get the economies to its lethargic in timor leste.

P


35

Figure 3 Conceptual Framework

Research Hypothesis

Based on the background and the formulation of the problem posed in this study and the

previous study presented above, then the hypothesis proposed in this research are as follows:

H1: Entrepreneur attitude has significant influence against entrepreneur intention of people of

Atsabe.

H2: Subjective norm has significant influence against entrepreneur intention of people of

Atsabe.

H3: Perceived behavior control has significant influence against entrepreneur intention of

people of Atsabe.

H4: Entrepreneur intention has significant influence against entrepreneur behavior of people of

Atsabe.

H5: Perceived behavior control has significant influence against entrepreneur behavior of

people of Atsabe.

RESEARCH METHODS

The kind of research it is the type of research causal by adopting quantitative approach .The

research also expected descriptive, according to Hamdi & Bahruddin, (2015:6) is research

devoted to describe or described the facts is. Descriptive research is a form of research devoted

to described the facts is, good a natural phenomenon and phenomena were made. The

phenomena can be the form of, activity, characteristic, change, relations, in common, and the

contrast between phenomenon one with the phenomenon other.

The population used in this study is a society Atsabe SMEs in Timor Timur with a total of 1,300

people. The sampling technique in this research is purposive sampling. Counting technique

using a sample size formula Slovin. Data collected by conducting interviews, survey and

documentation study. Then the analytical technique used is structural equation model using

partial least square.

RESULT AND DISCUSION

In this research will test hypotheses done with review of the coefficients path by comparing

between p-value this value of alpha 0,05. Decision making hypothesis would be if value of

alpha 0,05 smaller than p-value so ho rejected that is significant. But if value of alpha 0,05

Entrepreneur

Attitude

Subjective

Norm

(SN)

Perceived

Behavior

Control

(PBC)

Entrepreneur

Intention

Behavior


36

larger than p-value so ho received does not affect significantly. Are the main the analysis shown

in figure 4 following:

Figure 4 Partial Least Square Model for Bootstrapping

Based on the analysis that has been done and the criteria used in this study, the following table

is the result obtained in hypothesis testing are obtained.

Table 3 Hipothesis Analysis Result

Hipotesis Pengaruh t-Hitung P-Value Keputusan

H1 Niat Entrepreneur => Behavior 5,860 0,000 Diterima

H2 Perceived Behavior Control =>

Behavior 2,609 0,009 Diterima

H3 Perceived Behavior Control =>

Niat Entrepreneur 4,055 0,000 Diterima

H4 Subjective Norm => Niat

Entrepreneur 2,107 0,036 Diterima

H5 Sikap Entrepeneur => Niat

Entrepreneur 2,561 0,011 Diterima

Sumber: Data processed

The analysis has shown in table 2, explain that entrepreneur attitude have significant influence

on the entrepreneur intention of people Atsabe. This result confirms that the that the interest is

something which excite attention on something thing. Interest will indicate what is desired or

done or what people being endeared. Someone who is interested in a thing , then all action or

what is done will led him to his interest (Aprilianty, 2012). Based on results of descriptive

analysis, known that attitude entrepreneur and intentions entrepreneur atsabe of society

including in the category of high, that reveals the attitudes entrepreneur owned by the

community high atsabe also cause or affecting entrepreneur intention of people atsabe.

The influence of subjective norm on entrepreneur intention of people atsabe, known to have a

positive and significant. This outcome indicating that when a norm subjective increased, so

intention people to do a business are also increased. Vice versa, if a norm subjective decline, so

intention people in doing effort or entrepreneurship also declined. Based on analysis of the


37

descriptive, it is also known that a norm subjective the people atsabe have a high. Hence known

that in the people atsabe a subjective norm owned the affect his intention to perform the act of

entrepreneurship hopefully with a a subjective norm high so the intention is also high.

The influence of perceived behavior control, based on the results of the analysis which is shown

in table 2 , be seen that is the positive a significant impact on entrepreneur intention .This

outcome indicating that perceived behavior control increased, so intention people to do the

effort or entrepreneurship also rose. Vice versa, if perceived behavior control decline, so

intention people to do the effort or entrepreneurship also declined. Based on the results of

descriptive analysis done, be seen that perceived behavior control of the people Atsabe have a

high. In addition the people Atsabe also have high entrepreneur intentional. Thus known that in

the people Atsabe perceived behavior control owned the affect his intention to perform the act

of entrepreneurship hopefully with a control behavior entrepreneurship high so the intention is

also high.

On entrepreneurial intentions having significant influence and give a positive response to the

entrepreneurs behavior of the people people Atsabe. This result confirms that if the entrepreneur

increased, then entrepreneur behavior residents to conduct a business are also increased. Vice

versa, if entrepreneur intention decline, then entrepreneur behavior the people to make an effort

or entrepreneurship also declined. Based on analysis of the descriptive it is also seen that the

people entrepreneurship intention Atsabe have a very high level. Then for variables behavior

owned by the people Atsabe also has a very high level. Thus seen that on the community atsabe

intention entrepreneurship owned that affected conduct of a in the community atsabe to perform

the act of entrepreneurship.

On perceived behavior control to entrepreneur behavior of the people atsabe, seen that control

behavior berwirausaha having influence a positive and significant impact on entrepreneur

behavior of the people atsabe. This outcome indicating that when perceived behavior control

increased, so the behavior of the people to perform the business or entrepreneurship also rose.

Vice versa, if perceived behavior control decline, so the behavior of the people to perform the

business of also declined. Based on the results of descriptive analysis be seen that perceived

behavior control the people atsabe and entrepreneur behavior owned by the people atsabe have a

high.

CONCLUTION AND RECOMMENDATION

The conclusions obtained from this study based on the formulation of the problem and the

results of data analysis that has been done in previous chapters are as follows:

1. The attitude of the entrepreneur has a significant influence on the entrepreneur intention

of the people Atsabe. If the attitude of the entrepreneur increases, the entrepreneur

intention will also increase.

2. Subjective norm has a significant influence on the entrepreneur intention of the people

Atsabe. If subjective norm increases, the entrepreneur intention will also increase.

3. Perceived behavior control has a significant influence on the entrepreneur intention of

the people Atsabe If the perceived behavior control increases, the entrepreneur intention

will also increase.

4. Entrepreneur intention has a significant influence on the entrepreneur behavior of the

people Atsabe. If entrepreneur intention increases, the entrepreneur behavior will also

increase.

5. Perceived behavior control has a significant influence on the entrepreneur behavior of

the people Atsabe. If perceived behavior control increases, the entrepreneur behavior

will also increase.

Recommendation that can be given based on the results of the analysis and conclusions

of this study is that the government may increase entrepreneurial attitudes, subjective norms,


38

and perceived behavioral control by the people Atsabe to improve entrepreneurship intentions.

The intention then would increase public entrepeneur behavior. This is necessary because based

on the results of the analysis still needs to improve the community who work as entrepreneur.

So as to improve on the three factors to be able to increase the number of entrepreneurs from the

people Atsabe.

REFERENCES

Anggraeni, F. D. (2013). Pengembangan Usaha Mikro, Kecil dan Menengah (UMKM) Melalui

Fasilitasi Pihak Eksternal dan Potensi Internal (Studi Kasus Pada Kelompok Usaha"

Emping Jagung" di Kelurahan Pandanwangi Kecamatan Blimbing Kota Malang). Jurnal

Administrasi Publik, 1(6), 1286-1295.

Aprilianty, E. (2012). Pengaruh Kepribadian Wirausaha, Pengetahuan Kewirausahaan, Dan

Lingkungan Terhadap Minat Entrepreneur Siswa SMK. Jurnal Pendidikan Vokasi, Vol. 2,

No. 3.

Firmansyah, B. (2013). Keterkaitan Pengalaman Kewirausahaan, Sikap, Norma Subjektif,

Kontrol Perilaku Terhadap Niat Untuk Menjadi Wirausahawan (Studi Pad Pengrajin

Batik Di Kota Surakarta, Kabupaten Sragen Dan Kabupaten Karanganyar). Riset

Manajemen dan Akuntansi, Vol. 4, No. 7.

Hadiyati, E. (2011). Kreativitas Dan Inovasi Berpengaruh Terhadap Kewirausahaan Usaha

Kecil. Jurnal Manajemen Dan Kewirausahaan, Vol.13, No. 1, 8-1.

Hamdi, Asep, S., Baharuddin, E. (2014). Metode Penelitian Kuantitatif: Aplikasi Dalam

Pendidikan. Yogyakarta: Deepublish.

Hasbullah, Norazlan., Mahajar, Abdul, J., Salleh, Mad I. (2014). Extending the Theory of

Planned Behavior: Evidence of the Arguments of its Sufficiency. International Journal of

Humanities and Social Science. Vol. 4, No. 14, December 2014. Pp. 101 – 105.

Helmi, A. F. (2011). Model Determinan Perilaku Inovatif Pada Mahasiswa Yang Entrepreneur.

Jurnal Psikologi, Vol. 38, No. 2, 134-146.

Kumar, Bipul. (2012). Theory of Planned Behaviour Approach to Understand the Purchasing

Behaviour for Environmentally Sustainable Products. Working Paper Indian Institute of

Management. Desember 2012, pp.1-43.

Mahmoud, M. A., Muharam, F. M., dan Mas'ud, A. (2015). Factors That Influence The

Entrepreneurial Intention Of Nigerian Postgraduates: Preliminary Analysis And Data

Screening. Asian Social Science; Vol. 11, No. 4.

Mok, WK., Lee, Y.K. (2013). A Case Study on Apllication of The Theory of Planned Behavior:

Predicting Physical Activity of Adolescents in Hongkong. Journal Community Medicine

and Healthy Education. Vol. 03, Issue, 5, pp.1-6.

Musdalifah, A. B. (2015). Pengaruh Locus Of Control Dan Sikap Entrepreneur Terhadap

Intensi Entrepreneur Melalui Kreativitas (Studi Kasus Pada Ibu Rumah Tangga Di

Kecamatan Donri-DOnri Kabupaten Soppeng). Jurnal Administrasi Publik, Vol. 5, No. 2.

Sonny, Eman, dan Burdinasari, S. (2012). Analisis Minat Mahasiswa Fakultas Ekonomi

Universitas Singaperbangsa Karawang Menjadi Entrepreneur. Jurnal Manajemen, Vol.09,

No.4.

Thobias, E., Tungka, A. K., dan Rogahang, J. J. (2013). Pengaruh Modal SOsial Terhadap

Perilaku Kewirausahaan (Suatu Studi Pada Pelaku Usaha Mikro Kecil Menengah Di

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April 2013.


39

ENTREPRENEURSHIP LEARNING ANALYSIS ON THE

READABULITY OF ENTREPRENEUR TROUGH SUBJECTIVE

NORM AND ATTITUDES IN STUDENTS OF ECONOMIC

FACULTY ECONOMY UNPAZ

1Jose da silva, 2Denny Bernardus♠


INDONESIA

Email: [email protected], [email protected]

ABSTRACT

This study aims to determine the effect of entrepreneur readability to entrepreneur learning

through subjective norm and attitudes on Unpaz Students of the Faculty of Economics. The

method used in this research is quantitative method by using Structural Equation Modeling

(SEM) AMOS. The sample used in this study were students UNPAZ Faculty of Economics

majoring in Accounting, Management, and Banking totaling 187 students. This research

data collection methods by using a questionnaire with Likert scale. The results of this study

are entrepreneurial learning, subjective norm, attitude to entrepreneurs have a significant

and positive influence on the intention entrepreneur. Meanwhile, entrepreneurial learning

also has a significant and positive effect on the subjective norm. Four variables showed Da

Paz implication that the University should provide an opportunity to the students a lot of

activity in the field, sharing with colleagues who merged his business. Students are taught

to try to learn the business from the communities around and from an entrepreneurial

family background, always creative and read a great opportunity to succeed and never

give up until achieving success.

Keywords: Analysis of Entrepreneurship Education, Subjective Norm, Attitude and

Entrepreneur Readability.

INTRODUCTION

The State of Timor-Leste is a fully independent State and a fully sovereign State on 20 May

2002. In 2005 East Timor's population was estimated at 1,040,880 inhabitants. The population

of Timor Leste is a mixture of Malay and African tribes, a small part of Portuguese descent. The

majority of the population is Catholic (93%), followed by Protestant (3%), Islam (1%), and

Buddhist, 1%, 0.5%), and 2% confidence. Because the majority of the population is Catholic,

with international recognition through the United Nations (UN). As a newly independent State,

where the actual world situation enters the era of globalization, the era of global development

along with the development of science and technology, thus, the Government of East Timor in

general and the Office of the Ministry of National Education and especially in the Human

Resources Management Division of East Timor , Certainly faced with global challenges and

developments, this condition will greatly affect the development process in Timor Leste. To

respond to these conditions, the Human Resource Management Department is required to

develop a strategic plan in order to increase Entrepreneur's work spirit towards subsequent

development. (Kusminitarti, 2014).

Entrepreneur is one of the supporters who determine the advancement of the economy, because

the field of entrepreneurs have the freedom to work and independently. A person will have a



40

desire for an object or behavior if the individual is affected by the people around him to do it or

the individual believes that the environment or the people around him support what he does

(Saeroji & Tjahningsih, 2015). Profession as an entrepreneur is an option for Life and a

respectable professional choice that must be well planned and mature. Entrepreneur is a chosen

way of life because it has been believed with the facts and facts that the entrepreneur has a big

role in improving the quality of life of individuals, communities and countries.

Readability of entrepreneurship should and should be grown in the community including

students because it has many benefits, among others, proposed by Siswadi (2013).

Entrepreneurship learning can also increase the interest of students to choose entrepreneurship

as a career option in addition to career choice to be a private employee, civil servant, or BUMN

employee. Based on research conducted (Boukamcha, 2015) states the importance of

entrepreneurial learning in raising the desire to do entrepreneurship. Interest in entrepreneurship

activities will predict entrepreneurial behavior. Based on research conducted by Hussain and

Norashidah (2015) also shows a significant influence of entrepreneurial learning on

entrepreneurial readability. Attitudes of entrepreneurship is one aspect that must be prepared

mentally or emotionally in the form of action on a form of entrepreneurship. Based on research

(Dahalan et al.2015) shows that there is an influence between attitudes or entrepreneurial

behavior towards entrepreneurial readability. In addition, Susetyo and Lestari research (2014)

also mentions that entrepreneurship attitudes have a significant influence on entrepreneurship

readability of students.

Unemployment is not bad for the economy of Timor Leste. The country's GDP grew by eight

percent last year, according to the Asian Development Bank, and this will continue until 2015.

But Paulo Alves, the labor director at the Secretary of State for Skills and Employment Training,

warned of no employment in Timor Leste, Making it the poorest country in Southeast Asia. The

proof, Timor Leste has raised more than $ 10 billion since independence in 2002 from offshore

oil and gas reserves, but remains a low-income country, with extreme poverty and complex

social problems (UCA News, 2014).

LITERATURE REVIEW

Entrepreneurship

Entrepreneurs are individual activities aimed at starting or maintaining the management of

profit-oriented business units (Singh and Gupta, 2015: 14). Understanding of entrepreneurship

is a creative effort built on innovation to produce something new, have added value, give

benefits, create jobs, and the results are useful for others (Soegoto, 2011: 3).

Another sense Entrepreneur is the process of creating a new business. Through the process, an

individual will spend time, energy, money and risk taking for intrinsic rewards and extrinsic

rewards (Khuong and An, 2016). Entrepreneurship can also be interpreted as an individual way

of managing any opportunity with regard to resources currently owned or controlled (Bula,

2012).

The entrepreneurial process involves more than just solving a problem in a management

position. The entrepreneurship process has several stages, namely (Leach and Melicher, 2015:

5): formulating ideas for opening new businesses, gathering resources, and managing and

running a business.

Entrepreneur Learning

Entrepreneur learning can be interpreted as a process of acquiring new knowledge from direct

experience or from observing directly the behavior and actions of others applied to open new

business (London, 2011: 392). In entrepreneurial learning will be trained skills, abilities, and

attitudes to be creative and courageous and to be able to recognize opportunities, act

independently, and also develop the ability to work together (Axelsson, et al, 2015).


41

Students in this process start thinking how to run business creation. Students also experience

personal development processes and connections with their individual needs to achieve personal

satisfaction with what they will do (Mueller & Anderson, 2014)

Subjective Norm

According to Fishbein and Ajzen in Anggelina and Japarianto (2014) explains subjective norms

or subjective norms are individual perceptions related to whether the important person thinks

that behavior should be done. The subjective norm is also interpreted as a social influence, ie the

perception of a person indicating that most people are important to think about should or should

not do the behavior in question (Yau & Ho, 2015).

Meanwhile, according to Huda et al. (2012) subjective norm is a person's perception or

assumption about the expectations of others from certain behaviors that one will or will not

perform. Because, this perception is very subjective naturally, this dimension is called

subjective norm. The same attitude toward behavior, subjective norms is also influenced by

belief. Saeroji et al. (2015) explains that subjective norms are a person's perception of social

pressures to perform or not to engage in behavior. According to Marhaini in Saeroji et al. (2015)

states that in this theory the behavior of a person depends on the intention, then the intention in

behaving depends on the attitude (attitude) and subjective norms. On the other hand, beliefs

about behavior and evaluation will determine behavior. Normative beliefs and motivations to

follow the opinions of others will determine subjective norms. Therefore, the theory of

subjective attitudes and norms is also called the theory of reasoned action.

The subjective norms are the social influences that influence a person to behave. A person will

have a desire for an object or behavior if the individual is affected by the people around him to

do it or the individual believes that the environment or the people around him support what he

does Saeroji et al. (2015).

According to Ajzen in Anggelina and Japarianto (2014), the subjective norm is the extent to

which a person has the motivation to follow the person's view of the normative belief. If the

individual feels it is his personal right to decide what he or she is going to do, not determined by

others around him, then that person will ignore people's view of his behavior. Fishbein and

Ajzen in Anggelina and Japarianto (2014) use the term motivation to comply to describe this

phenomenon, namely whether the individual obeys the views of others who have influence in

his life or not.

Entrepreneurship Attitude

Entrepreneurship attitude is a feeling or selection in becoming an Entrepreneur.

Entrepreneurship attitude is something that is based on the beliefs and beliefs of the

entrepreneur in the business that is being worked on (Susetyo and Lestari, 2014). The formation

of entrepreneurial attitude can be seen in everyday life. A person who decides to become an

entrepreneur can be called an entrepreneur. An entrepreneur is someone who develops new

products or new ideas and builds a business with a new concept. An entrepreneurial attitude of

an individual can be seen from how one's appreciation of entrepreneurship up to the individual's

willingness to act and change attitudes in accordance with the characteristics of

entrepreneurship (Nurbudiyani, 2013).. Individuals who are entrepreneurial will have the beliefs,

feelings and tendencies to behave entrepreneurs or establish business independently. The

presence or absence of an entrepreneurship spirit in a person is something that is very important

in encouraging someone to become Entrepreneur because it is the boundary of an individual

attitude in starting to become an entrepreneur. Entrepreneurs' attitudes can be measured using

several indicators, namely (Susita, 2013): self-confidence, task-oriented, risk-taking, leadership


42

traits, pioneering, and exemplary, shown by an attitude that always wants to be different, and

originality.

Entrepreneur Readability

Generally the stronger the readability, the more likely someone is to perform certain behaviors.

Readability in entrepreneurship is closely related to entrepreneurial behavior. Interest is a direct

predictor of Koe et al. (2012). Can also be interpreted readability in entrepreneurship as a level

of cognitive awareness that leads individuals to establish a new business. Readabilities are

situations of thought that involve individual concentration, experience and behavior toward a

particular purpose or behavior. In the entrepreneurial study, readability is usually related to

building new business Mat et al. (2015).

RESEARCH METHODS

Population and Sample

The population according to Ferdinand (2002: 223) are all units from which the sample is

selected. The population may be an organism, person or group of persons, communities,

organizations, objects, objects or events. In this study the population is an even semester student

of Faculty of Economics, consisting of regular class and extension class with a total of 2591

students and each department with the number of students as being scattered: management =

950 students, accounting = 562 students, and banking = 989 students and the sample used is 187

students.

Test Validity and Reliability

Test validity by Waluyo (2011: 16) validity test is the essence and truth of a study. A statement

item is said to be valid if it is able to measure what is desired and can reveal data from the

variables that will be accurately precisely. The vailidity test was performed with SPSS 16.0 to

measure the validity performed by using Pearson Correlation. If the sig value is less than 0.05

then it is declared valid. Data obtained from the research quizoner must be tested first

instrumentation. Testing of research instrument used in this research is test of validity and

reliability test. Validity test is used to measure whether the instrument or indicator used in the

study is valid or not. Valid means the instrument can be used to measure what should be

measured. An instrument or indicator can be said to be valid if pearson product moment has a

significant value smaller than alpha 0.05 (Ghozali, 2002). Reliability test according to Ridwan

and Sunarto (2013) reliability is a tool to measure a questionnaire which is an indicator of a

variable. A questionnaire is said to be reliable or reliable if the answer to the question is

consistent or stable over time. The measurement scale is said to have good reliability if it has a

value of cronbach alpha > 0.6.

Model of Structural Equations

The model used to analyze the data in this study is Structural Equation Modeling (SEM) using

AMOS software. Its software is used because in the conceptual model there are latent variables

and indicators, and to know how big influence of each latent variable and covariance based.


43


Here is a model image after modification

Figure 1. One Step Approach Modification Model of Causality Measurement

Table 1. Evaluation of Goodness of Fit Indices Criteria after Modification

Criteria Result Cut-off Value Evaluation

Chi-square (χ2) 200,024 < X2 (172;0,001=235,05) Good

Probability 0,071 ≥ 0,05 Good

CMIN/DF 1,163 ≤ 2,00 Good

RMSEA 0,030 ≤ 0.08 Good

GFI 0,911 ≥ 0,90 Good

AGFI 0,881 ≥ 0,90 Marginal Fit

TLI 0,982 ≥ 0,90 Good

CFI 0,985 ≥ 0,90 Good

Source: Results Data Processing

Effect of Entrepreneurial Learning on Subjective Norm

Entrepreneurial learning has a significant and positive influence on subjective norms because it

has a positive estimate standard value with a significance value of less than 0, 05. The existence


44

of this significant and positive influence means that the increase of entrepreneurial learning will

be able to increase subjective norms on UNPAZ students of the Faculty of Economics.

This is also supported by research conducted by Gerba (2012) which states that students who

follow entrepreneurial learning or who have entrepreneurial learning tend to have

entrepreneurial interest and have a good perception of things about entrepreneurship.

Effect of Entrepreneurial Learning on Attitude to Entrepreneur.

Entrepreneurial learning has a significant and positive influence on attitude to entrepreneurs

because it has a positive estimate standard value with a significance value of less than 0.05. The

existence of this significant and positive influence means that the increased entrepreneurial

learning will be able to improve attitude to entrepreneurs in UNPAZ students of the Faculty of

Economics. Susetyo and Lestari (2014) which concluded that there is a significant influence

between entrepreneurship knowledge variables on entrepreneurship attitudes

Effect of Entrepreneurial Learning on Intention Entrepreneurs

Entrepreneurial learning has a significant and positive influence on intention entrepreneurs


existence of this significant and positive influence means that the increase of entrepreneurial

learning will be able to increase the intention of entrepreneur in UNPAZ student of Faculty of

Economics. This is supported by research conducted by Hussain and Norashidah (2015) which

suggests a significant influence of entrepreneurial learning on entrepreneurial interest.

Influence of Subjective Norm to Intention Entrepreneur.

Subjective norms have a significant and positive influence on intention entrepreneurs

because they have a positive estimate standard value with a significance value of less than 0.05.

The existence of this significant and positive influence means that the increasing of subjective

norm will be able to increase intention of entrepreneur at UNPAZ student of Faculty of

Economics. Huda et al. (2012) the subjective norm is a person's perception or assumption about

the expectations of others of a particular behavior that one will or will not perform. Meanwhile,

Saeroji et al. (2015) explains that subjective norms are a person's perception of social pressure

to perform or not to engage in behavior.

Influence of Attitude to Entrepreneur to Intention Entrepreneur

Attitude to entrepreneur has a significant and positive influence on intention entrepreneurs


existence of this significant and positive influence means that the increased attitude to

entrepreneur will be able to increase intention of entrepreneur in UNPAZ student of Faculty of

Economics. The results of this study also supported by research conducted by Susetyo and

Lestari (2014) states that there is a significant influence relationship on entrepreneurship attitude

towards entrepreneurship readability.

CONCLUSION AND SUGGESTION

1. Entrepreneurial learning has a significant and positive influence on subjective norms. It is

proved that UNPAZ students of Faculty of Economics who follow entrepreneurial learning

or who have entrepreneurial learning tend to have interest in entrepreneurship and have good

perception about matter of entrepreneurship.

2. Entrepreneurial Learning has a significant and positive influence on Attitude to Entrepreneur

It is proved that students who have followed the learning of entrepreneurship will have

entrepreneurial knowledge and start thinking how to run and create business,

Entrepreneurship attitude to entrepreneur them.


45

3. Entrepreneurial Learning has a significant and positive influence on intention entrepreneur.

This is evidenced by students of UNPAZ Faculty of Economics who have followed the

learning of entrepreneurship will have knowledge and entrepreneurship skills that encourage

student interest to become entrepreneur.

4. Subjective Norm has a significant and positive influence on intention entrepreneur. This can

be proven in the UNPAZ students of the Faculty of Economics who have a subjective norm

regarding entrepreneur will bring the intention to behave entrepreneur.

5. Attitude to Entrepreneur has a significant and positive influence on intention entrepreneur.

This can be proven in UNPAZ students of Faculty of Economics who have entrepreneurial

attitude have confidence, interest and tendency to behave entrepreneur or establish business

independently.

Suggestion

1. The results of this study can be used as reference material for students to conduct

assessments and considerations in increasing their interest in entrepreneurship through

entrepreneurial learning, subjective norm, and attitude to entrepreneur.

2. For further research using the same theme is expected to add or use new variables other than

those in this study. So that the results obtained can be mutually support and strengthen.

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48

FINANCIAL STATEMENT CONTROL IN THE WEALTH

MANAGEMENT FOR INDIVIDUAL COMPANY

1Asy'ari


INDONESIA


ABSTRACT

This study aims to determine the cause of the deterioration of the

individual companies. This research is a qualitative approach. The

object of this study is a located in Sumenep, East Java. Data

collection method used is to study literature related to the theories of

financial statements Accounting, control and wealth management.

The results of this study indicate that the company is bankrupt

because of being influenced by the lack of control over the

company's finances.

Keywords: Controlling, Financial Statement, Wealth Management,

Individual Company

INTRODUCTION

Business world make a decision based on the calculation of profit and loss(Purwati&

Prawinegoro2013).One of such toolsto make a decision is accounting, whereby the information

that presented in the form of qualitative and figures are real pictures of the business activities

from time to time.

A manager needs information at any time to make decisions. Accounting information in the

business world is an important subject for management decisions. Therefore Ari Purwati and

Darsosono Prawinegoro (2013) suggested that all lavel managers must know and understand the

accounting information and are able to use in decision-making, both in the business and non-

business organizations. Here, manager will be the one to control, view and filter all of the

elements that are likely to make a business organization will suffer a setback.

Various functions of the financial statements of one of them to see how big turnover of assets to

cover debtsthat could be detrimental if the turnover pattern is not significant in certain quarters

(James O. Gill in Kashmir, 2015: 140)

The financial report is very important because the financial statement allows to predict how the

continuity of a company in the future. The financial statements also is a source for a manager to

draw conclusions about what to be taken to map or developed and even to save an agency or

company that he leads.

Without controlling the financial statements correctly, a company will have various problems

and even adownturn. it has been experienced by the individual company in Sumenep, East Java,

which was engaged in the trade field and grew very rapidly in the 2000s. Even this business that

located in front of these traditional markets was considered big and got many customers and

demands. However, after more ten years of running, in the year of 2014 the company declared a

bankruptcy.

There is a stigma that states that individual businesses are often not professional, can not

separate the interests of the family and business interests and has insufficient control system.



49

But the existence of the business always shows a pretty good development. This can be due to

most of such companies always prioritizethe importance to relations within the family in the

company. While in the term to choose to run their business, they are more flexible than the

professionals-implemented control system.

The main objective of this research is to discover the wealth management control of the

financial statements that sometimes the manager is wrong to describe the financial statements

for decision making. However, the specific purpose of this study is to determine the role of

financial control for individual companies, how the practice of wealth management in individual

companies and how the role of financial control within an individual company's efforts in

managing wealth.

LITERATURE REVIEW

Control Financial Statements

Controlis the final part of the management process (Kenneth A. & Wim A.: 2012). The use the

term management control has the same meaning as the terms of execution and implementation

of the strategy. Similarly, in terms of achieving the goals we want, a company requires a control

system. According to (V. Wiratna Sujarweni, 2016: 95), control is a process to ensure that

activities lead to the desired goal. Hilmia Nora (2010) in S. Mia Lasmayana et.al (2013) stated

that the main focus in the financial control is an initiative that selected to change the

possibilities and achieve the expected results.

According to Mulyadi (2010) internal control system is an organizational structure, methods and

coordinated measures to safeguard the wealth of the organization, check the accuracy and

reliability of accounting data, promote the efficiency and encourage adherence to management

policies.

Internal control system shall be composed of some basic elements as follows (Mulyadi, 2010)

1. The organizational structure that separates the functional responsibility firmly.

2. System of authorization and record keeping procedures that provide adequate protection

against wealth, debt, income and expenses.

3. Healthy practice in carrying out the duties and functions of each organizational unit.

Financial Statements

According to Lasmi (2016: 56) Financial Report is a report of organization's financial

information published by the company on the results of the accounting process as a means of

communicating financial information to external parties. Therefore, the financial statements for

an Investor (external parties) will be needed in terms of both accuracy and validity to see the

company's performance during a particular quarter. This relates to the control and prediction of

an investor to determine whether it is still worth mentioning that the company is ‘healthy’ or

not, and whether the company can still compete.

Medium according toKashmir (2015) the financial report is a report that shows the current

condition of the company. Current company conditions means the company's financial

condition at a particular date (for balance) and a certain period (for the income

statement).Warren & Fees in Lasmi (2016) defined financial report as a transaction which is

recorded and summarized for users of accounting reports that generate information called

financial statements.

Meanwhile, according to Statement of Financial Accounting Standards (SFAS) No.. 1,

"Financial statements are a structured representation of the financial position and financial

performance of an entity (IAI, 2009: 1-5). Farid & Siswanto (2011:21) said that the financial

statements are expected to provide information that help users to make economic decisions that

is financiallypurpose financial statements


50

As already known that the financial statements are made certainly have a specific purpose. In

practice, there are several objectives to be achieved, especially for business owners and

management companies. In addition, financial reporting purposes are prepared to meet the

interests of the various parties interested in the company. Kashmir (2015) stated that the

financial statements details, capable of providing financial information to parties in and outside

the company who have an interest in the company.

According to Lasmi (2016) the Purpose Financial Report are:

Useful information for investment decisions and credit

Useful information in assessing the future cash flows

Information about the company's resources, claims to resources, and change.

To meet the needs of users of financial statements

To compare performance between entities so that uniformity in the presentation may

facilitate users to read and analyze.

The purpose of financial statements in accordance with IAS 1 is to provide information

regarding the financial position, financial performance and cash flows of the entity that will

benefit the majority of the users report in making decisions (Dwi Martini .et .al: 2016)

The financial report contains financial information is essentially information qualitative

(Dwi Martini .et .al: 2016). In order for such information is useful to users of such information

must satisfy the qualitative characteristics. With the qualitative characteristics, qualitative

information in the financial statements can memenihi needs of the user.

Users and financial reporting purposes of investors, potential investors, lenders,

employees, suppliers, other creditors, customers, governments, institutions and the public. The

user uses financial statements to meet the needs of different information.

Wealth Management

Wealth Management started being popular in recent years. Wealth management services to

appear early in 2000, when foreign banks operating in Indonesia offer wealth management

services. Widiastuti (2009) in Sina (2015) explained that the real financial wealth management

is a science older than risk management. Triggers initiated by private wealth management

banker at the beginning of the establishment of an international financial center in the 17th and

18th Wealth management is an ongoing investment of an expert which includes planning the

financial statements and financial services. Financial planning as a plan to manage the revenue

plus lifestyle.

Sole Proprietorship

By definition, the meaning of individual vendor is a company owned by one individual

(Sukirno, et.al, 2014: 34). But the field, practice these enterprises are often the family company,

a company that uses whole or in part members of the family to run it. Although some individual

holdings are large and have a lot of employees, but many are small and businesses owned

(usually operated) by one man (Pride et.al, 2014).

While Rudianto (2012) defined Sole Proprietorship is a company owned by an individual, where

the owner invests in the enterprise and take full responsibility for the company's operations. All

assets and liabilities of the company are often difficult to be distinguished to the assets and

liabilities of the owner.

RESEARCH METHODS

The method used in this research is qualitative research methods that the research methods used

for research on the condition of the object is natural (Sugiyono: 2015). For Finding an

alternative model of controlling financial statements for the management of wealth, then the

element must be found in accordance with the formulation of the problem, objectives and

menfaat research, we used qualitative descriptive method with a model library research.


51

In this case, the author obtained data by studying literature related to the theoretical basis of

accounting financial statements, control and wealth management, as well as matters other

matters relating to the issues to be discussed as a basis for the preparation of this manuscript.


UD.X is a company engaged in the trade, especially groceries and snacks. UD.X Based in

Sumenep Madura, East Java. This effort has established and operated in the early 2000s. Every

day it operates from 07.00 am until completion.

In terms of the location and layout, UD.X has a very strategic place. In addition to a place which

is the main road south of the island of Madura lines, the company is also situated in front of a

traditional market that opens every Wednesday. The company also serves the retail and

wholesale purchase. When viewed in terms of the place and the density of people who buy both

wholesale and retail enterprise hard common sense to decline or even closed (bankruptcy).

UD.X is one of the companies that existed in 2000's and developed rapidly. However, in 2014,

companies that operate in the field of trade groceries declared bankrupt. In this case, the decline

of the company were not because ofbeing disrupted by the business competitors but because the

company can not develop supervision in financial matters and unable to control and manage

your finances well.

According to some sources the company is starting to find its decline when the owner can not

separate personal, family and business interests. This implies a profound effect on his business

finances marked by the least amount of supplies of goods per weekend because of dwindling

finances.

Related to the above cases, this allows the weak control of the company in the financial sector

where it is company-oriented family interests and personal interests without seeing the bad side.

While UD.Y is a company engaged in the trade of birds equipment and supplies, both in terms

of brackets, feeding and bird species as well. The company also is in the district Sumenep,

Madura, East Java.In addition to a shop, the owner also has a bird nest, as an asset. The

beginning of the journey of this company, swallow it has very smoothly and promising. There is

no indication that it will relocate swallow. So the current owners often buy other assets by

borrowing funds from the bank, and the owners thought as seeds at harvest as well swallow as

the collateral.

The cause of this company decline was the migration of swallows out of the nest. While

dependent on the bank to be paid progressively growing. It was never expected that he might be

able to miss the predictions. The number of loans made by UD.Y increasingly choked to pay off

her credit. And right at that moment proceeds from the sale of store equipment and supplies

birds can not cover the amount of loan that should be paid to the bank due to a similar company

that sells merchandise far below the price of the company.

Paradigm of the author in an enterprise organization, either acompany profit-oriented or non-

profit-oriented supervisory control especially in the financial statements has to be carried out or

a feeling of responsibility and a high integrity to create leadership model that fits that could

overshadow his staffs in his company development and able to form a coalition in the business.

Money management

In individual companies (sole proprietorship) is indeed the owner has the ultimate responsibility

and not limited to all obligations of the company. Because a proprietorship company tends to do

an activity in person, as an individual Vendor is a company owned by one individual only. Here

the owners sometimes difficult to distinguish between personal and corporate money as

experienced in UD.X case where the lack of rigor on the separation between private and

corporate money. Moreover, in this case UD.X never make record of financial accounting, there

is never a financial statement because they assume that the owner of the company did not need

it. He did not know that financial records are necessary to see how good a company's future


52

prospects. Moreover, in terms of finance as a whole there is no separation between personal and

corporate money that it is very important given the cash is the most liquid asset (Rudianto,

2012)

It can be concluded that UD.X here had lack of good company in terms of financial

management even in management wealth, due to financial planning as a plan to manage the

income and lifestyle was not quite right. Because the cause of its decline in this case is the lack

of supervision and control of wealth (asset). One problem that is often overlooked by businesses

is on financial management (Hutagaol, 2012).When judging in terms of lifestyle. The company

owner is very glamorous in social life. They did not realize that sometimes lifestyle that exceeds

the maximum limit will be dropped on to thebankruptcy.

Financial Supervisory

From several sources obtained by the authors that UD.X has a very generous leader, in terms of

the family he never bothered to family happiness was the staffs. In this case (Sukirno, 2014)

confirmed that the financial oversight relating to the protection of wealth must be no assurance

of the accuracy of the financial statements and bookkeeping. This means that any money comes

in and issued either for personal collection or related to the company should remain in control

and recorded clearly in accounting. The goal is to anticipate recording errors or worse to a

deterioration of the company as experienced UD.X the last few years. The impact of ignoring

financial supervision may not be seen clearly, but without an effective accounting method, the

business prospects of success may be bankruptcy. Accounting is the key indicator of the

business as the information provided by the accounting records are useful for decision-making

so as to improve the management and oversight of the company's finances.

Until now many businessmen ignore and do not realize the importance of recording financial

accounting. The businessmen thingthe financial statements is less important. It is considered as

fine situation when no accounting records executed, because of their knowledge of accounting

and the importance of a financial statement for the company are not sufficient, as experienced in

UD.X.

Debt

Debt is the obligation of the company incurred due to the purchase in the form of credit

(Kashmir, 2015). This means that companies purchase the goods with which payment is made in

the future. In this case the financial planning needed to buy goods on credit. Things like that

happened is feared that the business UD.Y insolvent. Many assets purchased and must be sold

to pay off debts. What remains now is to sell the shop occupied a bird equipment and even then

will be sold to cover the remaining debt.

Market Competition

In the competitive business world has become commonplace, which sometimes competing is a

necessity. In the business world and the law of the jungle applies where that is not capable of

being the ruler and survive then he will fall down as it is stated in the theory of disruption where

innovation becomes the most important factor in business, who does not change or innovate it

will die (Kasali, 2017).

Like what happened UD.Y he dazzled at existing businesses and satified because the company's

business runs normally and looks forward to the famous the expensive and rarely owned bird

nests. So when companies are struggling and running the same business with different models,

he cannot do anything. A competition in the market this modern era rules that whoever can not

afford to innovate they will be buried, erased from the business. UD.Y can not compete with his

competitors who issued the new product (what he himself sold was less updated).

Somehow, the control on financial report cannot be avoided because many entrepreneurs still do

not understand what the importance of financial report is and sometimes, in reality, many

businesses run without proper financial report still exist. Nevertheles, the control of business

components in all elements should be done well for better goals.


53

CONCLUSION

In individual company (sole proprietorship), supervision or financial control is needed to see

the company's performance and prospects for the future. The need for financial planning and

lifestyle are subjective to anticipate waste.Lack of understanding to manage money is also an

issue in the enterprise cause the company's bankruptcy. The absence of accounting records of

the financial statements is also one significant problem.In terms of asset management, the

company purchased to many assets on credit assets that are not controlled by reserving the right

things will lead the company's obligation to pay a very high liability.Lastly, the competition is

also a cause of the decline of the company because the company was unable to innovate and

look at the model of the future market. However, the financial report control in proprietorship is

very important to minimize the possibilities in failure and bankruptcy.

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54

SOCIAL NETWORK INFLUENCE TO SUBJECTIVE NORMS IN

KNOWLEDGE SHARING

Wulandari Harjanti1

STIE Mahardhika, Surabaya

INDONESIA

Emails: [email protected]

ABSTRACT

This quantitative research aimed to examine the social network influence

to subjective norms in knowledge sharing in order to support the SMEs in

Situbondo, East Java Province Indonesia in increasing the technology

factor which influences the behavior of knowledge sharing and designs

knowledge management system. Sosial network significantly and

positively influenced the knowledge sharing. It shows when the social

networking is increasing the employees will feel positive feeling to share

the knowledge. The social network influences significantly and positively

to the subjective norms in knowledge sharing. It is where the employees

who have social network will extensively experience bigger social

presure in sharing knowledge.

Keyword: social network, subjective norms, knowledge sharing

INTRODUCTION "Knowledge" is a key component for companies to create such competitive advantage

(Davenport and Prusak, 2000). Thus, Knowledge Management has become a very important

thing for all companies (Chang et al., 2012). Companies that focus on the management and

utilize it have a greater chance of building a competitive advantage than their competitors (Gray,

2001). The fundamental element of knowledge management is Knowledge Sharing which is

considered very important in an organization.

One of the factors contributing to Knowledge Sharing is social capital, which is based on the

willingness of employees to share and social pressure from the organization. Social capital takes

place in the relationship between a person and another person. It is used to describe a wide

range of pro-social behaviors, such as collective action and community involvement. Coleman

(1988), in Chow and Chan (2008), stated that it helps in encouraging action between individuals

or corporations.

Social capital is divided into three main classifications, namely structural, relational, and

cognitive (Granovetter (1992), in Munson et al. (2008)). The structural dimension involves

social relationships and networks that define who can be reached and how to reach them and the

factors in this dimension are related to the pattern of relationships, attachments, connections

between members, and the degree of structure in relationships that occur. The relational

dimension describes the level of trust developed during interactions, norms, obligations, beliefs

and identifications that increase the awareness of their collective goals. The cognitive dimension

refers to enhanced resources in understanding between one party and another. Wasko and Faraj

(2005) stated that sharing knowledge requires understanding, which is related to common

culture and common goals as an important factor. In this case the structural and cognitive

dimensions are the two main things applied in this study.



55

In a sustainable interaction situation such as sharing knowledge within the organization,

appropriate feedback is critical. When others respond in an anticipated way, the individual

concludes that his thoughts and behaviors are correct, at the same time the similar roles are

being in progresses as the exchange of knowledge continues according to role theory, which is

the basis of a symbolic interactionist perspective on the formation of self- Concept) (Bock et al.,

2005). This reflective appraisal process contributes to the formation of self-worth, which is

strongly influenced by the feeling of competence and closely related to effective performance.

Therefore, employees who got feedback on knowledge sharing actions in the past tend to have

better understanding on how these actions have contributed to the work of others and/or

improve organizational performance. Such an understanding will enhance her sense of worth.

Therefore, as a reciprocity will make employees tend to develop supportive behavior in sharing

knowledge compared to employees who can not see the linkage. The greater the self-worth

through knowledge sharing, the attitude to sharing knowledge will be more supportive.

Reference group norms become the standard for individuals to judge themselves. Individuals

who feel a high sense of worth in sharing knowledge tend to be aware of the demands of other

members related to knowledge-sharing behavior and adhere to these demands.

A personal attitude toward a behavior is a predictor of the intention to engage in such behavior

and the intention of knowledge sharing behavior is determined by the individual's attitude

toward knowledge sharing. If the attitude of members of the organization of positive knowledge

sharing, it will be stronger intention to do knowledge sharing

Knowledge sharing behavior is also very useful to help decision making. Therefore, it is

necessary to be familiarized in the organization to form a knowledge sharing culture within.

Things related to the issues of knowledge sharing are also experienced by SMEs which are

increasing their business in Situbondo area such as improper feedback, too fast in executing

tasks, friction between hierarchy and responsibility, dependence on employee knowledge of

other parts, and imperfect monitoring , The company encountered various obstacles.

The biggest obstacle to rapid packing readiness is unavailable and the need for expert staff tends

to increase thus this study will examine how social network influences on attitudes in

knowledge sharing and how the social network influences subjective norms in knowledge

sharing.

LITERATURE REVIEW

Social Network

Social network is the structural dimension of social capital (Granovetter (1992), in Munson et al.

(2008)). The structural dimension is related to a social system and network as a whole. These

conditions illustrate the configuration of relationships between people or units. It is the overall

pattern of connections between individuals to reach and how to reach them (Burt (1992), in

Chua (2002)). One of the most important parts of this dimension is the presence or absence of

network ties between individuals, network or morphological configurations that illustrate

patterns of relationships measured by density, connectivity, and hierarchy, and the right

organization, the existence of a network, Built for one purpose that can be used by others

(Nahapiet and Ghoshal (1998), in Inkpen and Tsang (2005)).

Inkpen and Tsang (2005) also stated that the social network which is the structural dimension of

social capital involves patterns of relationships between individuals within the network, and can

be analyzed through the perspective of network ties, network configuration and network

stability Network stability). The bond in the network is related to the specific way individuals

are connected. Bonding is a fundamental aspect of social capital, because the individuals within

the network of bonds that are formed will create opportunities for social capital transactions

(Adler and Kwon, 2002). A key feature in a network is that network members are part of the

same corporation. Therefore, the bonds between members, such as interdepartemental and


56

interpersonal relationships are not very different between members. In other words, network ties

to members will be stronger (Adler and Kwon, 2002), so that individual social capital will form

the basis for organizational social capital. Through strong cooperation in performing work tasks

and problem-solving work the bonds that occur between Members of the organization will

become stronger so that is an important social capital for the organization.

Chow and Chan (2008) suggest that social networks have a significant direct influence on

subjective attitudes and norms in knowledge sharing. Therefore, management must develop

clear mission and objectives so that all members of the organization can appreciate and

contribute knowledge and therby it is critical for the HR division.

Subjective norms

Subjective norms are a measure of individual perceptions of social reactions to behavior.

People's perception of whether others will approve or reject the respective behavior. Subjective

norms consist of two components, namely normative belief and motivation to comply (Ajzen,

1991). Normative belief is an understanding of something significant. "(Corner and Armitage,

1998). Perceptions about the judgment of others are influenced by a motivation to fulfill / follow

that is influenced by the assessment. Research on compliance measures shows that peers have

an important influence on predicting behavior.

Attitudes and subjective norms are two thoughts about the use of influence or not when a person

requires an activity. In general research has shown that attitudes are a better predictor of making

an action than subjective norms (Ajzen, 2001).

Knowledge Sharing Each knowledge sharing behavior consists of bringing (knowledge donating) and getting

(knowledge collecting) (Van den Hoff and De Ridder, 2004). Knowledge donating is the

behavior of communicating intellectual capital owned by someone to others, and knowledge

collecting is individual behavior to consult with other individual about intellectual capital

owned. Both of these behaviors have different properties and can have different effects. The

same is also expressed Ardichvili et al. (2003), knowledge sharing requires two parties, namely

those who provide new knowledge and who ask for knowledge.

Effective knowledge-sharing and learning behaviors require cultural change in organizations,

new practical management, senior management commitment, and technological support.

Organizational culture should be transformed into a sharing culture and it should be handled

with strong top-level leadership, and by providing a means of knowledge management that can

make the job better. (Turban et al., 2002).

RESEARCH METHODS

Here the model was evaluated by using R-Square for dependent constructs, t test and the

significance of the structural path parameter coefficients (Ghozali, 2008: 26). The change in R-

Squares value is used to assess the influence of certain latent independent variables on latent

dependent variables whether they have substantive effects. Hypothesis testing is done by

comparing the value of t statistics with the value of t table. If the statistical t value is greater

than the value of t table (1.96), then there is a significant influence between a variable on the

other variables and vice versa if the t value of the statistic is smaller than the value of t table

(1,96), there is no significant influence .

This research has two hypothesis:

H1: Social network positively influences the attitude in knowledge sharing

H2: Social network positively influences subjective norms in knowledge sharing

RESULTS AND DISCUSSIONS

Only 37 employees from several SMEs in Situbondo were taken as respondents and divided into

several characteristics according to gender, age, last education and years of service. All

respondents or 100% were males. Major age range is between 36 years to 40 years with the


57

number of 15 people or 41%. About 20 people or 54% are high school graduates. As for the

period of employment, respondents with a working period of more than 4 years to 6 years is the

dominant respondent with the number of 12 people or 32%.

Descriptive statistics of the social network (X1) show an average value of 3.65, which indicates

the condition that the overall level of social network employees are in the high category. Shared

goals (X2) show an average value of 3.75, which indicates the overall condition that the overall

levels of the employees' share goals are in the strong category.

The social network indicator that has the lowest rating related to good relations and conducts in-

depth discussions with other members of the organization, because it has the lowest average

value of 3.62. The social network indicator that has the highest rating associated with spending

a lot of time to interact with other members of the organization, because it has the highest

average value, which is 3.70.

While the indicator of shared goals that have the lowest rating associated with the statement of

employees that “they are always enthusiastic in pursuing the goals and collective mission of the

organization as a whole”, because it has the lowest average value of 3.40. The shared indicators

that have the highest rating associated with the statement of employees “ always share the same

ambition and vision in the work”, because it has the highest average value, which is 3.75.

The results show that the value of Composite Reliability and Cronbach Alpha for each social

network variable (X1), shared goals (X2), shows the number above 0.75 so it can be stated that

the variable construct has good reliability, thus the path coefficient value (Path) social network

(X1) to the attitude of knowledge sharing is positive by 0.3678, with the value of t statistics of

2,5518> t table value of 1.96. It shows that social network (X1) has a significant positive effect

on attitudes on knowledge sharing (Z1).

While the value of path coefficient (path) shared goals (X2) on the attitude of knowledge

sharing is positive at 0.3752, with t statistics of 2.2739> t table value of 1.96. Shows that shared

goals (X2) have a significant positive effect on attitudes on knowledge sharing.

The influence of social network (X1), shared goals (X2), on attitudes towards knowledge

sharing shows the R-Square value of 0.6624, means that the variability of attitudes on

knowledge sharing (Z) can be explained by social network (X1 ) And shared goals (X2),

66.24%, while the remaining 33.76% is still explained by other non-researched variables such as

self-worth. From the above calculation The first hypothesis states that the social network has a

positive effect on attitudes on knowledge sharing. Based on analysis results show that the

coefficient path (path) is positive with a t value of statistics of 2.5518> t table value of 1.96, it

shows that Social network (X1) has a significant positive effect on attitudes on knowledge

sharing. Therefore, the first hypothesis that social networks have a positive effect on attitudes on

knowledge sharing is accepted.

The second hypothesis states that social network positively influences subjective norms in

knowledge sharing is positive with the value of t statistics of 2.4207> t table value of 1.96, it

indicates that social networks have a significant positive effect on subjective norms in

knowledge sharing Therefore, the second hypothesis that social networks have a positive

influence on subjective norms in knowledge sharing is accepted.

CONCLUSIONS

This study examines the influence of social networks, shared goals, and self-worth in

influencing subjective attitudes and norms in knowledge sharing, as well as the influence of

subjective attitudes and norms in knowledge sharing on intentions of knowledge sharing, and

the influence of intent on sharing knowledge on knowledge sharing behavior. The results show

some conclusions as follows:

1. Social networks have a significant positive influence on attitudes on knowledge sharing,

which shows that through increasing social network employees will feel a positive


58

feeling about sharing knowledge, so with the increasingly extensive social network built

among employees, the attitude of employees to share knowledge is better.

2. Social networks have a positive effect on subjective norms in knowledge sharing, where

employees with more extensive social networks will experience greater social pressures

for sharing knowledge, because of high expectations from co-workers on knowledge

sharing is also stronger.

The suggestion raised is the need for the company's efforts to increase employee's

motivation and positive beliefs on knowledge sharing behavior, by increasing the frequency of

activities that lead to the exchange of knowledge among employees, as well as enhancing

superior support to optimize the knowledge sharing culture within the company so as to realize

more effective and efficient work processes.

REFERENCES

Adler, P.S. and Kwon, S.W. (2002). Social Capital: Prospect for A New Concept. Academy of

Management Review, 27: 17-40.

Ajzen, I. (1991). The Theory of Planned Behavior. Organizational Behavior and Human

Decision Processes, 50: 179-211.

Ajzen, I. (2001). Nature and Operation of Attitudes. Annual Review Psychology, 52: 27-58.

Ardichvili, A., Page, V., and Wentling, T. (2003). Motivation and Barriers to Participation in

VirtualKnowledge-Sharing Communities of Practice. Journal of Knowledge

Management, 7(1): 64-77.

Bock, G.W. and Kim, Y.G. (2002). Breaking Myths of Rewards: An Exploratory Study of

Attitudes About Knowledge Sharing. Information Resources Management Journal,

15(2): 14-21.

Bock, G.W., Zmud, R.W., Kim, Y.G., and Lee, J.N. (2005). Behavioral Intention Formation in

Knowledge Sharing: Examining The Roles of Extrinsic Motivators, Social-

Psychological Forces, and Organizational Climate. MIS Quarterly, Vol. 29(1): 87-111.

Chang, C.W., Chan, M.L., and Tseng, C.P. (2012). Human Factors of Knowledge Sharing

Intention Among Taiwanesse Enterprises: A Model of Hypotheses. Human Factors and

Ergonomics in Manufacturing & Service Industries, 22(4): 362-371.

Conner, M. and Armitage, C.J. (1998). Extending The Theory of Planned Behavior: A Review

and Avenues for Further Research. Journal of Applied Psychology, 28: 1429-1464.

Davenport, T.H. and Prusak, L. (1998). Working Knowledge: How Organizations Manage What

They Know. Boston: Harvard Business School Press.

Granovetter, M.S. (1992). Problems of Explanation in Economic Sociology. In N. Nohria & R.

Ecles (Eds.). Networks and Organizations: Structure, Form and Action: 25-26. Boston:

Harvard Business School Press.

Gray, P.H. (2001). The Impact of Knowledge Repositories On Power and Control in The

Workplace. Information Technology & People, 14(4): 368-384.

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Transforming Business in The Digital Economic. John Wiley & Sons.

Van Den Hoof, B. and De Ridder, J.A. (2004). Knowledge Sharing in Context: The Influence of

Organizational Commitment, Communication Climate Use on Knowledge Sharing.

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Wasko, M. M., and Faraj, S. (2005). Why Should I Share? Examining Social Capital and

Knowledge Contribution in Electronic Networks of Practice. MIS Quarterly, 29(1): 35-57.


59

BEHAVIORAL FINANCE IN DEBT DECISION MAKING

1Dwi Perwitasari Wiryaningtyas

Program Studi Manajemen Fakultas Ekonomi

Universitas Abdurachman Saleh Situbondo

Jl. PB Sudirman No. 07 Situbondo, Jawa Timur

INDONESIA


ABSTRACK

This article explores about behavioural finance in debt decisions

making on the owners of MSMEs batok in Situbondo district of East

Java. Data collected using interview method, literature study and also

direct observation. Data analysis technique used is an interactive model

that refers to the model of qualitative data analysis techniques. The

results showed that most owners of batik MSMEs in Situbondo argue

that debt is a positive thing as a source of funding and stimulator.

Based on the results of the study found that there are three dominant

psychological factors important in debt decisions making on owners of

batik MSMEs in Situbondo, namely optimistic, availability, and illusion

of control.

Keywords: behavioral finance, decision making, debt

INTRODUCTION Micro Small Medium Enterprises (MSMEs) is a business established by individuals and groups.

MSMEs is one of the government's efforts to overcome the problem of poverty and

unemployment in Indonesia, in addition MSMEs also has a high degree of flexibility compared

to businesses that have greater capacity. Human Resources (HR) owned by MSMEs is also still

limited, it can be seen that some MSMEs are hereditary efforts of the family. So the manager in

the business is the owner of the business itself and not others

Many problems in MSMEs, there are internal and external problems. The internal problem in

MSME owners is the capital problem used for the development of their business. The lack of

capital is because MSMEs is a small business and managed by individuals, so that the capital is

very limited. As for the loan capital to the bank or other financial institutions are also still

difficult to obtain because constrained by administrative requirements that can not be met by

business owners. In addition, because of human resources that cause less development of the

business. One strategy to develop a business is to meruput the competent human resources in the

field.

Internal problem by other MSMEs is the marketing network is still weak and limited. Some

MSMEs in Situbondo is a home business where the goods produced are only marketed in the

area only and most far only marketed out of town. Seeing the goods generated by MSME itself

actually has a high quality and not less good with the results of large companies, but owners of

MSMEs Situbondo still can not penetrate the international market due to lack of information,

knowledge and network. In addition, the technology used by SMEs is still not bnayak, most

UMKM using traditional power. MSMEs are still many who do not yet have a clear legal entity,


60

it is because the requirements that must be met to take care of the legality and licensing aspects

still can not be met.

External problems by MSMEs one of them is the business climate is not fully conducive, as still

the happening of less healthy competition occurs between small entrepreneurs and big

businessmen. The second external problem is the problem of very limited facilities and

infrastructure. The lack of information gained about the current technological advances that are

so rapidly makes MSMEs less developed and can hurt the progress of its business.

The third problem is the implications of free trade. As it is known that AFTA which came into

effect in 2003 and APEC 2020 which has wide implications for small and medium enterprises to

compete in free trade. In this case, inevitably Small and Medium Enterprises (MSMEs) are

required to perform production processes productively and efficiently, and can produce products

in accordance with the frequency of global markets with quality standards such as quality issues

(ISO 9000), environmental issues (ISO 14000 ) And human rights issues and employment

issues. This issue is often used unfairly by developed countries as a barrier (Non Tariff Barrier

for Trade). Therefore, MSMEs is expected to prepare to be able to compete both in comparative

advantage and sustainable competitive advantage.

Internal and external problems greatly affect the decision of owners of MSMEs. Especially in

funding issues, especially to develop a business or manage the permit and legality of the

business. According to Gibson (2007) the relationship between sources of financing derived

from self-capital and debt to individual micro and small businesses is often complex because the

assets of the business owner are used as debt guarantees, the business owner faces the risk of

obtaining uncertain returns. Preferences to debt as a source of funding are also analyzed through

behavioral finance approaches that emphasize that a person often behaves strangely or

irrationally when making decisions involving money because psychological factors play a

greater role in financial decision making (Hirschey & Nofsinger, 2008).

Preferences of MSME owners in using debt as a source of funding may not be separated from

the perception of business owners about the benefits and risks of debt used and psychological

factors of business owners. Psychological factors here such as overconfidence, optimism, or

lifestyle. The existence of the theory of behavioral finance is very helpful for business owners to

understand their own behavior. According to Brigham and Houston (2014), behavioral finance

is a psychological element incorporated in finance to better understand how individuals and

markets respond to different situations. The academics develop a more comprehensive model by

linking the finance and psychology of human behavior with financial markets (Shiller, 2002).

Shefrin in Supramono and Putlia (2010) also argues how entrepreneurs can understand factors

such as weakness of cognitive ability, personality, emotional, mood or mood and others affect

behavior that deviates from expectations. Research on behavioral finance is very interesting to

study because it is very useful, not only for the academic field but also useful business owners

in improving business management.

RESEARCH METHODS

This research was conducted using qualitative method of interpretive model. This method is in

accordance with the model outlined in the constructivist paradigm, that the researcher or writer

serves to translate what has been said by the respondent. The subject of research is the owners

of batik MSMEs in Situbondo. Research data were obtained through indepth interview and

participant observation. Validity of data obtained by performing member check and

triangulation both on data and source. All data were analyzed using an interactive analysis

model, a series of interconnected since the study was designed, verified and drawn conclusions.


61

Results and Discussion

Batik is one of the cultural characteristics of each region. Batik motif of each region was also

different. Batik motif in Situbondo Regency is marine biota such as shellfish, starfish, fish, and

so on. This is because the District Situbondo is one of the regencies in the northern coastal

region with a wealth of abundant sea. Batik in Situbondo has existed since the 1970's, this can

be proved by the existence of batik cloth in Peleyan Village Kecamatan Kapongan (Batik

Cotto'an). The development of batik in Situbondo has ups and downs, this is due to the lack of

economic and capital conditions.

Various kinds of batik there are 3, namely batik tulis, batik cap and batik printing. Batik tulis is

batik painted / drawn manually by hand with canting as a tool to paint and lilin batik as ink.

Batik tulis higher value than batik cap because of the value of art and requires high creativity to

paint batik so that the price of batik is also higher than batik cap. Batik business owners in

Situbondo regency not only as craftsmen but also as traders or who market the batik. While the

batik cap is batik cloth that is stamped using a mold that already has a motif like a stamp and

then dipped into a hot wax. Making batik cap is faster than batik because it must be painted one

by one using canting, while batik cap can be completed only with one tap only. The last is batik

printing, batik printing is done directly in the print using a screen printing tool.

The price offered for batik cloth in Situbondo is very diverse, from the price below Rp. 100,000,

- up to millions of rupiah. It depends on the fabric, the material / dye used and the difficulty

level in painting batik motifs. Situbondo batik cloth is not only marketed around Situbondo

District, but also marketed outside the city. Batik entrepreneurs in Situbondo also receive batik

orders with certain motives, usually used for school uniforms or agencies - institutions in the

District Situbondo. Situbondo batik business although it has been standing / formed for a long

time but still often face capital problems. This is because the household industry is moving

downhill since the 1970's. Business owners get capital from financial institutions such as banks,

other than that batik business owners in Situbondo can also get capital from non-financial

institutions.

Perceptions of Debt

The perception of MSME owners about debt causes the existence of psychological bias and debt

decision making. The results show that business owners have a positive view of the existence of

debt. Debt is considered as a good and positive for the business it has. The business owner said

that borrowed debt can help smooth the business and be useful in meeting their business needs.

The funding activity through debt is done by utilizing formal financial institutions (banks) and

non formal (relatives, moneylenders and middlemen). Here is a general overview of MSMEs in

Situbondo in meeting its funding.

Table 1. Funding of MSMEs in Situbondo

Description Percentage

Bank Debt 42.35%

Non Bank Loans 20.65%

No Debt 37%

Source: MSMEs in Situbondo 2016

From the Table above shows that the owners of MSMEs Situbindo many who use debt as a

source of funding with varying amounts. Debt is considered as a stimulator and not as a burden

on business owners. In addition, the debt is also a motivation for business owners to develop

their business so that their business can be more productive and get the desired profit in order to

pay the debt obligations. The debts obtained by the owners of batik MSMEs are usually used as

business development such as, the addition of products produced, purchase of raw materials and

tools used for batik and to pay for labor. Funds obtained from these debts are also used to


62

expand the marketing network of batik cloth products produced. In addition, debt funds are also

used to add or improve the infrastructure for batik. For example, a place to wash or soak batik

cloth or cloth to dry batik cloth.

Debt in a business will be useful if used as needed. The amount to owe must also be calculated

and estimated by the business owner not to become a burden. Given the debt or external funds

earned by the business owner should be used in accordance with the needs of his business and

not used for the personal needs of business owners.

Debt obtained by business owners not only from financial institutions or banks, but some are

obtained from non-financial institutions such as from family or relatives. Borrowing money on

non-financial institutions or to families is usually more easing because there is no interest nor

guarantee. However, many business owners are not too concerned about how much interest or

collateral provided by the bank. This is done because the funds obtained from the debt will be

used for business development and improve business performance. According to the view of

Champion (1999) states that the use of debt is one way used by companies in improving

performance.

Psychological Factors in Debt Decision Making

In general, economic actors are unable to make rational considerations, but economic actors

often make irrational considerations. Economic actors rely more on intuitive aspects or

emotions so as to analyze the costs and benefits appropriately. Similarly, when making debt

decisions, business owners more often process information quickly in order to get conclusions

and results quickly so that it can lead to error bias financial practitioners psychology. In

accordance with the theory of behavioral finance that is not entirely economic actors apply

rationally in financial decision-making, they sometimes also behave irrasional in decision-

making.

According to Shefrin (2007) about the classification of psychological factors that there are three

dominant psychological factors that play a role in debt decision making in the entrepreneur

MSMEs air rifle that is optimistic, availability, illusion of control. Optimistic attitude is

expected by all entrepreneurs because of its influence on behavior that always try to achieve

targeted results. Owners of batik MSMEs in Situbondo are confident that their business

prospects will grow and the product produced are accepted by community. This happens

because the demand for batik production is increasing in Situbondo. In addition, business

owners also believe that the debt they get will be useful for the development of business in the

future. Owners of batik MSME Situbondo also stated that by thinking optimistically they will be

able to grow and get the return they want and can pay or pay off the debt on time.

Optimistic attitude is needed in the development of a business, but optimism is also not too

excessive. The over optimistic nature of optimism becomes excessive and makes the

entrepreneur unrealistic with the real situation faced or underestimated the risk that will occur

(Bratvold, Begg & Campbell, 2005). Shefrin (2008) argues that someone who is too optimistic

will have a tendency to feel that he has the ability to process debts beyond the ability of his

colleagues. Owners of batik SMEs Situbondo also very optimistic about the prospects of his

business to the fore. These beliefs can be seen from their ability to produce high quality

products and in great demand by consumers.

Owners of batik MSMEs Situbondo also included in the category of illusion of control that is,

one feels confident to control or influence the outcome of a decision, but in reality is not the

case (Supramono & Putlia, 2010). This is supported by employers' statements regarding their

ability to conduct or process information about debt. An entrepreneur who feels confident in his

ability to process information about debt, goes into the category of illusion of control. This is in

line with the opinion of Taylor & Brown (1998) which revealed that illusion of control is an

unrealistic perception of an event. There is a possibility that the owner of batik MSMEs


63

Situbondo feel familiar with the debt because it has often done decision making task (task

familiarization), determine its own choice of choice (debt) and feel to have adequate

information (information). Entrepreneurs feel that their ability to manage their finances is good

and also feel that they have obtained adequate information about the debt. Baker and Nofsinger

(2002) explain that people often prefer something that is familiar to them. Consequently, the

entrepreneur will make debt decisions to the people he knows without seeking other information

as a comparison. Entrepreneurs who are informed that debt to certain banks are cheaper in

interest and easy to process, are likely to use the bank as a source of funding.

The next category is avalaibility bias, ie someone rely more on information available at the time

of decision making (Supramono & Putlia, 2010). Entrepreneurs who experience avalaibility bias

tend to trust the information they remember only. Some of the owners of SMEs Situbondo

borrow money as business capital from members of their relatives, they do not do the

information adequately, but only rely on information that is spontaneous is to borrow money

from the family only. Business owners will trust the information they get from people they trust.

Families and people who are already familiar, must have a strong emotional bond and usually

will affect a person's ability to think. This is what often causes a person to make or produce

decisions spontaneously and his thoughts are focused on something familiar.

Conclusion

Based on the results of research and discussion about behavioral finance in debt decision

making on batik MSMEs in Situbondo, it can be concluded that most of them consider that debt

is a positive thing as a source of funding and is considered as a stimulator rather than as a

burden, and spur the MSMEs entrepreneurs in motivating themselves To advance his business.

It also revealed that psycological factor bias occurs in debt decision making. The results of

research there are three psychological factors that predominantly play a role in making debt

decisions on entrepreneurs SMEs Situbondo namely:

1. Optimist, is the nature of assuming himself to exceed, surpass, or surpass the human

average in a population.

2. Availability, is conditions where entrepreneurs will trust the information they get

from people who are trusted only.

3. Illusion of control, is an unrealistic perception of an event

Three psychological aspects make the actors or entrepreneurs of MSMEs in decision making is

more likely to put forward the emotional aspects without taking into account the good financial

calculations that lead to biased decisions. Employers should minimize bias in their financial

behavior in making debt decisions in order to minimize losses because they have a strong

optimist and illusion of control. How, MSME entrepreneurs should still seek information and

listen to suggestions derived from others who are judged to provide an objective view of the

profit and loss of sources of debt in accordance with the needs of his business. Thus the

entrepreneur will be able to minimize the risk of debt and the loss of his business.

Suggestions

Future research is expected to allow the objeck to be studied not only in one district but in one

province to see how the differences in financial behavior of the community in the district and

province. The results of study are expected to be input to business owners to be smarter in the

selection of debt with low risk.

REFERENCES

Baker, K. H. & Nofsinger, R. J. 2002. Psychological biases of investors. Financial services

review 11. 97-116

Brigham, Eugene F&Houston, Joel F.2014. Dasar-Dasar Manajemen Keuangan, Edisi 11,

Buku 1. Salemba Empat: Jakarta.


64

Champion, D. 1999. Finance: The Joy Of Leverage. Harvard Business Review. 77, 19-22

Shefrin, H., 2008, Risk and Return in Behavioral SDF-Based Asset Pricing. Models, Journal of

Investment Management 6 (No. 3), 1-19.

Supramono dan Putlia, Nancy. 2010. Persepsi dan Faktor Psikologis Dalam Pengambilan

Keputusan Hutang. Jurnal Keuangan dan Perbankan. 14(1). 24-35.


65

COMPARING OF ENTREPRENEURIAL INTENTION STUDENT

BETWEEN SCIENCE AND HUMANITIES STUDENTS : A

LITERATURE REVIEW

1Hujjatullah Fazlurrahman, 2Nindria Untarini

Universitas Negeri Surabaya

INDONESIA


ABSTRACT

This paper is preposition paper to know factor entrepreneurship intention

and compares two model entrepreneurial intention between science

students and humanities students taking subject. This paper will explore

and discuss entrepreneurial intention theory.

It is a causality study which uses multiple regression for data analyzing.

The samples of this research are undergraduate students and Sampling

method used judgement sampling the sample size are 150.

This research contrasts student taking entrepreneurship subject with

considering background study of the subject.

This paper suggests contribution to board of director faculty and

department to make decision and policy in designing entrepreneurial

learning programs for science and humanities students where later

whether there should be differences in the content of learning programs

on the different fields of study followed by students

Keywords: entrepreneurial intention, entrepreneurship subject, student,

and proposition

INTRODUCTION

Indonesian government campaign for spirit of entrepreneurship in university and push student to

follow the program for student and university every year. This program such as program

mahasiswa wirausaha (PMW), program Coop, dan program kreativitas mahasiswa

kewirausahaan (PKM-K). Indonesian government strike for spirit entrepreneurship student by

that program. Same as the opinion from Wijaya (2008) he explain to built entrepreneurship

intention that influenced by environment such as parent, culture, education process etc. this is

same as opinion from indarti dan rosiati (2008), their research in 3 country in japan, Indonesia

and Norway. Their research explain that environment have the highest influence to

entrepreneurship intention to be entrepreneur. This research show that Indonesian government

made culture of entrepreneurship with university. That program can stimulate student to be

entrepreneur. In contrast, Wijaya (2012) explain that program hasn’t ideal and contributed to

made entrepreneurship intensions

In other side, There is an indication of the relationship between the background of the field of

study with student entrepreneurial intentions. That same as researched by Wu & Wu (2008) to

student in shanghai China. This research show that the formation of the entrepreneurial intention

is influenced by the background of the field of study. Galloway et al. (2006), Shows that the

entrepreneurial intentions of the Faculty of Business students are higher than the entrepreneurial

intentions of the students of the Faculty of Science and Engineering. Bu the other opinon,

Suharti & Sirine (2011), show there is no significant difference between student entrepreneurial



66

intentions from exact faculty with non-exact faculty students. This is same as research made by

Chrissanti (2010) show there is no significant different between in need for achievement, locus

of control, self efficacy, instrumental readiness, subjective norms and entrepreneurship student

based on their department.

There are contradiction opinion of some previous studies researcher interested to know more

about the differences in entrepreneurial intentions are antecedent by the background field of

study. It is specially for student on the science and humanities. Researchers also want to explore

more deeply what exactly are the factors that shape the intentions of entrepreneurship in science

and humanities students. Empirical studies that examine the interrelation between the field of

study with entrepreneurial intentions are still limited. A number of empirical studies only

indicate the existence of a link between the type of pilot efforts of scholars with their field of

study (Lee & Wong, 2002; Alwan & Yenny, 2003).

The purpose of this research is to know the difference between entrepreneurship intention

between science and humanities students. In addition, it also forms a proposition related to the

role of factors influencing the entrepreneurial intentions of science and humanities students. It

aims to provide inputs to Board of Director of University (Rector and Dean) in designing

entrepreneurial learning programs for science and humanities students. For the future question,

Whether there should be differences in the content of the learning program on the different

fields of study that students follow

LITERATURE REVIEW

The academic research on entrepreneurship motivation was started 50 years ago and dominated

by social researchers rather than economics researchers. The development of literature (Lewis,

1991) has being debated in the economic growth. The needed for achievement is a personality,

also the result of demographic characteristic and environmental factors. Hagen (1971) using the

basic theory as used by McClelland on research in burma. Salam "traditional environment", he

said, the existing social structure is hierarchical and authoritarian structures in all aspects of

economic, political, and religious. The status of individuals in a society is a heritage, social

mobility is limited, and therefore, entrepreneurship motivation to be low (Hagen, 1971, p. 126).

Therefore, Hagen has been regarded as a pioneer of environmental determinants (environmental

determinist).

A number of studies have investigated the relationship between field of study and

entrepreneurial intention in a university environment. Grassl and Jones (2005) indicate that

distinct nuances exist between students of differing fields of study when considering

entrepreneurial intent. The studies have produced conflicting results which call for further

investigation.

A number of authors conclude that a definite relationship exists between entrepreneurial

education and entrepreneurial intent (Fatoki, 2014; Ramkhumise, 2014; Muofhe & Du Toit,

2011; Malabena & Swanepoel, 2014, 2015; Susanj, Jakopec & Krecar, 2015). Furthermore,

Otuya, Kibas, Gichira & Martin (2013) investigated the impact of entrepreneurial education in

influencing student’s entrepreneurial intentions. The study reported that students who partook in

an entrepreneurial program exhibited greater intention towards entrepreneurship than those

students who were not exposed to entrepreneurship education. These findings also concur with

those reported by Gerba (2012), who concludes that students who are registered for business-

related qualifications tend to have a higher attraction towards entrepreneurship than those

registered for engineering related qualifications. In addition, Ho, Low and Wong (2014) also

emphasized that an entrepreneurial education gives students a better understanding of the

venture creation process and the necessary skills required for venture creation, thereby

confirming a positive relationship between entrepreneurship education and intention. Also,

business students seem to have thought about entrepreneurship much more than other students;


67

however, they are less excited about entrepreneurship. A possible reason for this finding could

be that business studies are much more aware of the realities and high failure rate of

entrepreneurial ventures (Grassl and Jones, 2005). In contrast, a number of other authors

conclude that entrepreneurial intent is more strongly influenced by a comprehensive study

offering which is not necessarily focused on entrepreneurship education (Wu & Wu, 2008;

Solesvik, Westhead & Matlay, 2014; Abbas, 2013).

Entrepreneurial Intentions In the literature of social psychology, intention has proved to be a strong predictor of the

Planned individual behavior, especially when that behavior is rare, difficult to observe, or do

role in the timeframe that cannot be determined (Krueger, Reilly and Carsrud, 2000);

entrepreneurship is a special example of planned individual behavior and behavior that based on

the intention (Bird, 1988; Krueger and Brazeal, 1994) in karimi (2011).

There is a large literature debate that intention have an important role in the decision to start a

new business (Linan and Chen, 2009). As a consequence, over the last few years, several

models of job status that focus on the employment has become a topic of interest and have a

large enough space in entrepreneurship research (Krueger and Carsrud, 1993; Kolvereid, 1996)

in karimi (2011).

In this model, intension in careers seen as a direct antecedent of behavior (such as starting a

business). Intention in turn are determined by attitudes, and attitudes are influenced by "the

influence of exogenous" like nature, education, demographics and situational variable (Ajzen,

1991; Kolvereid, 1996; Krueger, 2003; Segal, Borgia & Schoenfeld, 2005; Souitaris et al.,

2007) in karimi (2011).

Need for achievement The need for achievement can be defined as "the behavior of the competition with a standard of

excellence" (McClelland, 1953). In other words, the need for achievement refers to the

expectation of doing something better or faster than others or that person achieve better

performance than ever achieved before (Hansemark, 2003). In the context of entrepreneurship,

"need for achievement" refers to the perceived outcome and the result of creating a new

business that significantly affect a person's tendency to take on the challenges and

responsibilities when starting and growing new businesses (Hansemark, 1998; McClelland,

1961). Some research suggests that the need for achievement is one of the strongest predictors

of entrepreneurial behavior (McClelland, 1961; Pillis and Reardon, 2007; Babb and Babb, 1992).

The research of Gorul and Astan (2006) showed that the need for achievement was found is

higher in students who received learning about entrepreneurship than students who did not get.

Entrepreneurial self-efficacy Bird (1989), Boyd & Vozikis (1994) put the construction of self-efficacy in entrepreneurial

research model. In the entrepreneurial, theoretically, self-efficacy is proposed in order to

improve the entrepreneurial intentions and behaviors (Boyd and Vozikis; 1994) and empirically

has a positive influence on entrepreneurial intention (Chen, et al, 1998). According to Mc. Gee,

et al, (2009), the construction of self-efficacy was first used for general self-efficacy for

entrepreneurship research, this also be used for students in general, so it's not accurate enough to

be used to measure entrepreneurial intention.

According to Bandura (1986), self-efficacy are specific task and should be assessed based on

the task and the specific behavior. In Chen, et al, (1998); DeNoble, et al, (1999), has a special

self-efficacy name in the entrepreneurial as an entrepreneurial self-efficacy. According to

Krueger, et al, (2000), in the study of entrepreneurship, entrepreneurial self-efficacy similar to

behavioral control that be perceived in the theory of planned behavior and the perceived

feasibility of the theory of entrepreneurship (Shapero & Sokol 1982). In subsequent research,

the construction of entrepreneurial self-efficacy is widely used to predict the behavior of


68

entrepreneurial research object; university or MBA students (Chen, et al, 1998, DeNoble, et al,

1999; Kristiansen and Indarti 2004, Ramayah and Harun, 2005, Zhao, et al, 2005, Gaddam,

2008).

As a basic entrepreneurial self-efficacy that was developed in the study of entrepreneurship,

Chen, et al, (1998) and DeNoble, et al, (1999), Barbosa, et al, (2007) defines the entrepreneurial

self-efficacy into four types of specific task of self-efficacy: (1) opportunity identification self-

efficacy: (2) the relationship of self-efficacy: (3) managerial self-efficacy: (4) tolerance of self-

efficacy. These categories have characteristics more emphasis on the managerial skills, both

internally (leadership, human resource management) and externally (relationship, opportunist).

According to Mc. Gee, et al (2009), a previous study using the entrepreneurial self-efficacy as

anteceden of the behavior and entrepreneurial intentions which has three limitations: it fails to

distinguish between general self-efficacy and self-efficacy, failed in calculating the

entrepreneurial self-efficacy multidimension, fails to involve new entrepreneur to the sample

(most research on entrepreneurial self-efficacy associated with the university or MBA students

as subjects of study) (Chen, et al, 1998; DeNoble, et al, 1999; Zhao et al, 2005).

Locus of control Several authors argue that the argentic characteristics of internal locus of control is

entrepreneurial self-efficacy, risk-taking propensity, and proactivity to not only distinguishes

between entrepreneurs and non-entrepreneurs, but they also affect the intention to start a

business. In the first place, internal locus of control implies a perception of high control and

feasibility in relation to specific behaviors, which is a strong predictor of intention (Shapero &

Shokol, 1982). That is why the locus of control is often associated with the development of

intentions of entrepreneurship (Krueger, 1993).

Contextual Elements

According to Anderson (2000, p. 102) in Indarti (2007) examined the entrepreneurs around the

Scottish Highlands and found that a person cannot understand about entrepreneurship, and

assume that entrepreneurship is the real object has its own characteristics environment objection

is not true; '... The environment is basically played and, has a consequently to became an object'.

Furthermore, this paper focuses on three contextual elements: access to capital, availability of

information, and social networking.

Access to Capital

Access to capital clearly an obstacle which is typical for the establishment of new businesses,

especially for new businesses in developing countries. Sources of capital can be personal

savings, a large family network, mutual savings and credit systems, or financial institutions and

banks.

Availability of Information

Singh and Krishna (1994) in their study of entrepreneurship in India found that the desire to

look for information is one of the few characteristics of entrepreneurs. Searching information

describes the frequency of contact by individuals with various informers. The results of these

activities often depends on whether it easy or not to access informers, either through its own

efforts or human resources or as part of their social resources and networks. In a study of

agribusiness entrepreneurs in Java, Kristiansen (2002b) found that access to the new

information is indispensable for the survival and growth of the company. The availability of

new information that is found to depend on personal characteristics such as education level and

quality of infrastructure such as media coverage and telecommunications systems.

Social Networking Studies on entrepreneurship has reflected a general agreement that entrepreneurs and new

companies should form a network together in order to survive (Huggins, 2000). Networks

describe a tool for entrepreneurs to reduce risk and transaction costs and improve access to ideas,

knowledge and resources for businesses (Aldrich and Zimmer, 1986). A social network consist


69

of formal and informal relationships between key behaviors and supporter in one circle that

know each other and describes the channel where the entrepreneurs can have access to needed

resources for the establishment of new businesses, growth, and success (Kristiansen and Ryen,

2002).

Figure 1. Reasearch Model Entrepreneurship Intention

Source : Indarti (2007)

RESEARCH METHODS

Papers were included if they were published since 1988, in English and had a qualitative

research focus. Papers with a quantitative research focus were excluded. Other relevant

literature, specifically books and book chapters, were identified through an iterative process

based on the journal papers. This paper is proposition and the researcher explain the hypothesis.

“What is differentiation entrepreneurship intention student in science and humanities?


Several studies have explained about differentiation entrepreneurship intention between

business student and non-business student. Student business represented by individual with

spend time in entrepreneurship education more than non- business student. Because it is

assumed they have higher knowledge, skills, and business competencies. In studies humanities

student is classified by business student and science student is classified by non-business

student. Table 1 show differentiation between entrepreneurship intention business student and

non-business student from many literatures

Table 1 Comparison of Entrepreneurship Intentions to Students

Author Basic Model Variables Unit Analysis Finding

Susanj,

Jakopec,

Krecar (2015)

Krueger and

Breazel's

(1994)

Entrepreneurial

potential model

Entrepreneurial

potential (EPO),

Entrepreneurial

characteristics

(EC),

Entrepreneurial

propensity

(EPR),

Entrepreneurial

University of

Applied

Sciences in

Zagreb,

Faculty of

Humanities

and Social

Sciences in

Osijek,

EC has positive

effect to ESE and

DOE

EC has positive

effect to ESE and

DOE

The EC is able to

directly affect the

EI

Personality Factors

Need for Achievement

Locus of Controll

Self-Effication enterpreneurship

intention

Contextual Elements

Access to Capital

Availability of Information

Social Networking

Entrepreneurial

Intentions


70

self-efficacy

(ESE),

Desirability of

entrepreneurship

(DOE),

Entrepreneurial

intentions (EI)

Faculty of

Humanities

and Social

Sciences in

Rijeka

ESE and DOE have

a positive effect on

EI

ESE and DOE are

able to mediate EC

relationships to EI

ESE and DOE are

better able to shape

EI in business

students than non-

business students

Eresia-Eke,

Shaum, Jean-

Claude (2016)

The Theory of

Planned

Behavior (TPB)

Entepreneurial

Intention diukur

dengan:

Entrepreneurial

Activity, Skills

related to

entrepreneurial

activity,

Attractiveness

towards

entrepreneurship,

Professional

attraction after

degree

completion,

Importance of

educational

courses

to develop

entrepreneurship

South

Africa’s

leading

Universities

There is a significant

difference in the

level of

entrepreneurial

intention of business

students compared to

non-business

students but the value

is not large

Marie Mbuya,

Schachtebeck

(2016)

The Theory of

Planned

Behavior (TPB)

Personal Attitude

(PA), Subjective

Norm (SN),

Entrepreneurial

Capacity (EC)

and overall

selfperceived

EI

(Entrepreneurial

Intent)

the Faculty of

Management,

at the

University of

Johannesburg

Both entrepreneurial

and non-

entrepreneurial

students have the

same views and

believe that

entrepreneurship is a

career choice in the

future (personal

attitude)

Both entrepreneurial

and non-

entrepreneurial

students believe that

entrepreneurship is

the right career

choice if they are


71

able to find

opportunities and

available resources.

Entrepreneurship

students show more

entrepreneurship than

non-entrepreneurial

students

Y. Abiodun,

O. Oyejoke

(2017)

Entrepreneurship

skills (ES),

Students’

Motivation

(SM),

Parental

Occupational

(PO),

Entrepreneurial

Intentions (EI),

Age, Gender

Olabisi

Onabanjo

University

(OOU) and

Tai Solarin

university of

Education

(TASUED)

There is a positive

and significant

influence between

ES and EI

There is a positive

and significant

influence between

SM and EI

There is

significant and

negative influence

between PO and

EI

There is no

significant

difference in

entrepreneurial

intentions between

men and women

There is no

significant

difference in

student

entrepreneurship

intent based on

discipline

There is no

significant

difference in

student

entrepreneurship

intentions based

on age group

Natrah Abbas

(2013)

The Theory of

Planned

Behavior (TPB)

Subjective norm,

Attitude toward

behavior,

perceived

behavior control,

entrepreneurial

intention

three

engineering

faculties: the

civil

engineering

faculty, the

electrical

There are different

entrepreneurial

intentions to students

in three engineering

majors

The highest


72

faculty, and

the

mechanical

faculty in

Malay

intentions of

entrepreneurship are

electrical engineering

students and civil

engineering students,

and finally

mechanical

engineering students

Boyd, Fietze,

Phipsen (2015)

The Theory of

Planned

Behavior (TPB)

Age, Gender,

Marital status,

Regular job,

Nationality,

Level of studies,

fields of study

the University

of Southern

Denmark

All students have

the desire to

establish their own

business.

However,

Business,

Economics and

Law (BECL)

students have a

higher desire to

start a business

than natural

Sciences and

Medicine students

(NSM) and Social

Sciences (SSC)

Based on table 1 it is seen that most of the studies have stated that the intention of

entrepreneurship in business students is higher than for non-business students although the

difference level is not too high. This is because individuals who take entrepreneurship education

classes have greater entrepreneurial intent than those who do not take entrepreneurship

education classes (Galloway and Brown, 2002). Individuals who hold high knowledge, skills,

and competencies will perform better than those with low education (Ployhart and Moliterno,

2011).

Like the entrepreneurship intention study conducted by Natrah Abbas (2015) on students in

three engineering majors University of Malaysia, where it was found that there is a degree of

difference in intentional entrepreneurship among students in all three majors. Where, students of

electrical engineering have a higher level of intention than students of civil engineering and

mechanical engineering. Meanwhile, mechanical engineering has the lowest intentions of

entrepreneurship. This indicates that engineering students have a degree of entrepreneurial

intentions at a moderate level. Generally, students from non-business majors have a lower level

of intention than business-oriented students (Wennberg & Berglund, 2008). There are five

elements that contribute in weakening the entrepreneurial intentions within the student that are

educational resources, learning methods, motivation in training, regulations, future views and

hardware resources. Of the several elements, educational resources receive special attention.

Due to lack of educational resources can create less effective learning process of

entrepreneurship. Educational resources include weak curriculum, improper course planning

process, lack of reference books.

In accordance with research conducted by Ismail, (2010), it was found that non-business

students in Malaysian polytechnic are not interested in studying entrepreneurship modules.

There are two underlying reasons: first, an entrepreneurial learning model that focuses only on

theory and outdated. Second, the applied entrepreneurship curriculum failed to cultivate an


73

entrepreneurial culture. Only about 20% of teachers have experience in business, have

entrepreneurship teaching experience and have attended entrepreneurship training. The minimal

number of teachers with experience in business and entrepreneurial learning led to a

monotonous, rigid, and theory-oriented learning method.

The condition is similar to that of students at the University of Southern Denmark. The

entrepreneurship climate in the university is relatively low. Danish students consider

entrepreneurial learning to be less important and the entrepreneurship courses offered only

partially improve entrepreneurial understanding. They are only interested when the campus

offers seminars with themes such as innovation and exploring business ideas, business planning,

and general entrepreneurship and are somewhat uninterested in the offer of continuing the

family enterprise.

This confirms that universities should position themselves as entrepreneurial centers. The

pedagogical approach at the university is considered effective in assisting students in

determining career options. Entrepreneurship education programs that include interesting

learning elements such as developing virtual companies, providing specialized training on new

business start-up strategies, conducting seminars that can raise awareness and foster

entrepreneurial spirit in students. On the other hand, the collaboration between higher education

institutions and business actors is still low. Whereas success story of business actors can

stimulate awareness and develop entrepreneur spirit among students. But it is rare, because first,

it is difficult to get commitment of business actors. Many business actors do not have time to

discuss other than their business interests. Second, low incentives. Incentives offered by

educational institutions to business actors as resource persons are still based on their level of

education. If their education level is lower than the incentives. Though they have included

successful entrepreneurs (Natrah Abbas, 2015)

Meanwhile, Susanj et al. (2015) studying business students and non-business students at Rijeka,

Osijek and Zagreb, Eastern European faculty found that entrepreneurial characteristics could

influence entrepreneurial intentions if individuals have entrepreneurial self-efficacy And the

desirability of high entrepreneurship. Entrepreneurial desires may arise if reinforced by the

combined training in any entrepreneurship education program. Entrepreneurship education is

able to empower individuals with high knowledge, skills and competence in the field of

entrepreneurship that ultimately allows them to have self-efficacy and high self-esteem

The entrepreneurship education that business students have acquired to grow entrepreneurial

intentions after they graduate from college. Because they feel that entrepreneurship education

can be used as stock in managing and developing business. Higher education can foster cell-

efficacy and hope for positive business outcomes (Pfeifer, Sarlija, and Zekic Susac, 2014).

Entrepreneurship education and training provide positive and significant results with a number

of entrepreneurial intentions linked to human capital assets and entrepreneurial outcomes

(Martin, McNally and Kay, 2013). In fact, entrepreneurship training programs are able to

develop competencies and intentions of doing business.

The degree of difference in entrepreneurial intentions between business students and non-

business students also occurs in college students who have graduated in one of South African

universities. However, the difference rate is low. This is because in South Africa,

unemployment and poverty rates are so high that they are forced to do business. Thought is

supported by the fact that how difficult friends, relatives or colleagues who have graduated from

college get a job in a company. Faced with such a disadvantage situation forced them to think of

starting their own business (Chan & Quah, 2012; Shariff & Saud, 2009). On the other hand, this

low level of entrepreneurial intentions is driven by attitudes attributed to the younger generation.

This group tends to be more adventurous and free than the older generation who tend to think

more conservative. Advances in technology and ease of access to information and networks

stimulate them to start businesses.


74

However, there are differences of opinion related to knowledge and self-efficacy that need to be

considered in generating entrepreneurial intentions. Non-business students sometimes

overestimate their ability to identify business opportunities and challenges and create their own

businesses. Whereas business students who had previously received entrepreneurial education

and training led to a high understanding of the risks, conditions and challenges of becoming

successful entrepreneurs, being anxious and afraid of stepping in to start a business. It is this

condition that causes different levels of entrepreneurial intentions between business and non-

business students (Eresia-Eke, Shaun, Jean-Claude, 2016).

In Nigeria, it was found that there was no significant difference in student entrepreneurial

intentions based on disciplinary levels (Y. Abiodun & O. Oyejoke, 2017). The educational

process does not have a beneficial or adverse effect on entrepreneurial intentions. The intention

of entrepreneurship can be formed by several other factors besides entrepreneurship education

such as family background, low job opportunity, the influence of friends and relative success.

Finally, between business students and non-business students there are still different

entrepreneurial intentions. Although, the average study shows a low rate difference result.

Business students show greater entrepreneurial intentions than non-business students because

they have gained entrepreneurship education, attended courses, and are accustomed to academic

tasks related to entrepreneurship so they have better knowledge, skills and competencies in

starting a business. Although, not entirely a high level of competence can stimuli individuals in

starting a business. Sometimes individuals who increasingly understand about the risks, terms,

and challenges in business make them fearful and anxious in starting a business. On the other

hand, entrepreneurial intentions arise from self-motivation to start a business because of

unfavorable conditions such as the difficulty of finding employment, termination of

employment. The desire to be more flexible in terms of time, energy, and income also

encourages individuals to intend to do business regardless of which individual comes from

which discipline.

CONCLUSION

Entrepreneurship is a crucial source in improving and developing a nation's economy. The study

sets out to define and identify what constitutes a degree of difference in entrepreneurial

intentions between business students and non-business students. The degree of difference occurs

because of the different levels of entrepreneurship education resources that have been obtained

during college. The average business student has better knowledge, skills, and competence

related to entrepreneurship than non-business students. Competence is derived from

entrepreneurship education and training. An interesting learning model also stimulates them to

always follow entrepreneurial learning. The high knowledge and insight into entrepreneurship

leads to self-efficacy and high self-esteem to start a business. The most obvious finding

emerging from this research is that the level of entrepreneurial intentions is not only influenced

by the background of discipline and entrepreneurship education. Sometimes these two things are

less able to stimulate the intentions of entrepreneurship, but motivational factors (such as desire

for security, need for more income) and contextual (such as cultural, economics, political) also

need to be considered in encouraging entrepreneurial intentions in students. This research will

be the basis of further studies that can help researchers to consider other factors in predicting the

degree of difference in student entrepreneurial intentions. On the other hand, it can be used as a

basis for higher education policy makers to pay more attention to entrepreneurship-related

education curriculum more interesting.

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WOMEN AS ENTREPRENEURS WITH SMALL CAPITAL

1Parwita Setya Wardhani, 2Menur Kusumaningtyas2


INDONESIA


ABSTRACT

Seeing the reality of the many successful women and the running of

their businesses, shows that nothing is impossible to be a successful

woman entrepreneur. Creativity to develop the business is also a

concern of woman entrepreneur with small capital. This is important

because so many women entrepreneurs of small capital are emerging.

Only with creative work the business can be successful. In addition to

creativity, managing finance cannot be separated from every type of

business. Not a few women entrepreneurs small capital who cannot

continue its business due to how to manage the wrong money. The result

from this research are woman entrepreneur of small capital started

business with aim to increase income, their passion, and their business

is supported by husband, they want to expand their business in the

future. But not all women who run their business have done the

financial recording that is crucial for developing their business.

Keywords: women, women entrepreneur, small capital

INTRODUCTION

In the economics, the existence of women can not be ruled out. They have contributed a lot with

the minimal capital they have. The spirit in managing the existing income for small and medium

enterprises gets a good response from the national market.

Small businesses with little capital, in addition to being able to generate extra income for them,

also become a separate market on a national scale. The targets of these women are the lifestyle

market. Because this segment is in great demand by women in developing countries. For

example fashion, women's accessories from hair to foot are provided by them. Although it is

possible to them to try another chalenge which are temporal like parcels or catering.

There are several reasons why they are interested in doing this business. First, they have their

own personal income without having to work at the office that takes up a lot of time. And leave

the family as well. Second, for network expansion so they have multiple channels from different

fields. Third, as a social status. By having their own income, they hope to get acceptance from

some circles. Fourthly, they do this because they are motivated by the success of their parents.

So that by following the trail of parents, easy access will be obtained, as well as to get an

injection of funds.

But in addition to providing small capital for business, there are also women who desperately

undergo business with very limited capital. This is usually driven by economic and living costs.

It is rife among students.

They are not ashamed to provide students, from toiletries, snacks, accessories to typing services

of campus tasks.



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Creativity in looking for business opportunities among IRTs or students should continue to be

processed. Not only that, with good service will arise either continuous relationship or

commonly called networking. The purpose of this paper is to find out how businesspeople in

women run their business with little capital and how they manage their finances.

The role of women in the economy of the country cannot be underestimated. They run a lot of

effort to help the family economy or run their business just to channel their talent. The type of

business that is generally run fashion (clothes, accessories) bags and shoes, catering, and others.

The desire to be independent especially in the matter of having their own source of income

independent of job vacancy offered by the company. And now there are many women

entrepreneurs who open their own business. Indeed there are following the career of parents

who background as a businessman and get a capital injection. But not a few also dare to run a

small business with just a mediocre capital because o

f economic factors, education and so forth. Some women open a small capital business from

home only. Usually housewives who want to be able to increase income for the family. But

many are still single and even students can have an effort to pay for their own tuition

(www.betabicara.com).

Creativity to develop the business is also a concern of women entrepreneurs with small capital.

This is important because so many women entrepreneurs of small capital are emerging. Only

with creative work the undertakings can flourish. In addition to creativity, regulating finance is

inseparable from every type of business. Not a few women entrepreneurs small capital who

cannot continue its business due to how to manage the wrong money. The objectives of this

study are to know how an entrepreneur with small capital runs the business and how the

business woman as the entrepreneur manages her financial.

LITERATURE REVIEW

The growth of the number of women who became business owners in a few years are increased.

According to Vice Dean of Resources and Finance Faculty of Economics and Business of

Telkom University, Lia Yuldinawati, entrepreneurs also have to get attention from several

agencies, both private and government. "All agencies should give rewards and capital assistance

for female entrepreneurs," Lia said, Women have an important role to play in the economic

progress of a country.

Based on a recent study conducted by the Asia Foundation, shows that about 23 % are women

entrepreneurs. The amount, growing 8 % annually. In Indonesia alone, the number of female

entrepreneurs is mostly in the micro and small scale. Data from the Ministry of Cooperatives

and SMEs in 2015 was recorded, from about 52 million perpetrators of SMEs that exist

throughout Indonesia, as many as 60 % of businesses run by women. This women's SMEs, she

said that most survive from the crisis of Monetary, economic, food, and energy that hit the

world and Indonesia 10 years ago. Thus, much support should be given to women to become

entrepreneurs. Looking at the enormous number of women entrepreneurs, Lia said that it is

expected that the number will continue to increase. In order, women entrepreneurs can play a

significant role in economic development in Indonesia there should be a strategic program to

increase the number and quality of entrepreneurs in Indonesia. The strategic programs to

support the increase in the number and quality of Indonesian entrepreneurs are capital assistance

and training for entrepreneurs (http://www.republika.co.id)

Examples of women business types with small capital, shown in the picture ;

http://www.republika.co.id/berita/ekonomi/makro/15/07/13/nrfiur-jumlah-pengusaha-umkm-perempuan-meningkat


80

ttps://www.google.co.id/search?biw=1024&bih=494&tbm=isch

http://www.sihanoukville-cambodia.com/Images/2016c/resto-indonesian-restaurant2.JPG

Tips for Successful Women For Small Capital Entrepreneurs

Seeing the reality of the many successful women and running the business, shows that nothing

is impossible to be a successful entrepreneurial lady.Some tips that can be followed successful

business ways for women entrepreneurs small capital from scratch:

Socializing Through the Media

Women entrepreneurs of small capital can run independent businesses by choosing to use social

media.Sebaiknya concentrate on some social media that is in accordance with the target market.

There are several popular sosmed in Indonesia such as: Facebook, Twitter, Path, Instagram,

Linkedin, Google+, BlackBerry, Pinterest, etc.

Take advantage of Network

As a small business owner often gets stressed. Therefore, supports from various parties become

important. If you do not currently have a business network, you can start from an existing

network of friends. Friends around can be a machine that can be utilized with the principle of

mutual benefit. Engaging in the appropriate business forums can be a way to get business

partners who provide many benefits. Frequent get together with friends, colleagues,

acquaintances is a successful business tip. Women's association lunch, botram show, family

gathering are useful social events.

Delegation

Owning a business does not mean that all activities are carried out by the personnel themselves.

If you already have employees or labor, you should start learning to be able to organize and

assign tasks to subordinates. Only need to control and supervise what has been done by

subordinates in accordance with the task. In this way, definitely have more time and energy to

think more about other things, because it also takes time to socialize. Must be able to read the

business needs for the system to run in a balanced, effective, efficient and profitable without

having to always sweat alone.

Make Your Home Inspirational

http://betabicara.com/2014/03/cara-memanfaatkan-google-plus-untuk-bisnis.html


81

Generally women who have their own business, also have responsibility to take care of their

home, children and husband. Often women feel the activity makes them depressed but it should

be an inspiration as a tip to become a successful entrepreneur with a strong mental and vision.

Never Stop Trying

Pursuing business opportunities is not simple and exhausting. But there is no need to be

discouraged and discouraged. Continue to widen the network and resources in order to make the

business more familiar and sought after .

(http://betabicara.com)

How to Manage Business Finance To manage the business finances properly, it takes the name 'financial discipline'. This material

is taken from the book Book of Anti-Bankrupt essay Jaya Setiabudi. Here's how to manage

business finances with 7 Financial Disciplines.

1. Separate Personal Account from the Company. This is to avoid the use of unintentional

or considered money as well. Although the company is 100% owned, the separation of

this account will make it easier to calculate accuracy.

2. Make a budget for Monthly Spending. Including salary. Pay for yourself according to

the position and 'number' of needs. If forced to borrow, calculate as a cash / debt to be

paid in the next payday.

3. Create a Cash Flow Projection. With cash flow projection, know when will receive

money, expend money, and will be minus/plus money. Thus, the anticipatory steps can

be taken before going minus.

4. Create a Cash Flow Statement. Ideally, the financial statements (profit / loss and

balance sheet). But, if not possible because it is still a new venture, make at least the

report out of money.

5. Separate Accounting with Cashier. If the share of money (cashier) also make financial

reports, then there is the potential for report manipulation. For example, cash in the

report is there, it turns out when audited there is no (used for personal use).

6. Avoid Money Staying at Employees. Many events brought home money tends to be

used, ranging from reasons for spree, sick brother, returned home, until the cat is injured.

7. Perform Stock Checks Periodically. The manipulation gap is stock already sold,

reported unsold. As a result, his money was gone. (Falasik.com/how-to-management-

company).

Previous research

The Role of Human and Financial Capital in the Profitability and Growth of Women-Owned

Small Firms

Authors *Susan Coleman

This paper examines the relationship between human and financial capital and firm performance

for women- and men-owned small firms in the service and retail sectors. Results indicate that

human capital variables, including education and experience, had a positive impact on the

profitability of women-owned firms, whereas measures of financial capital had a greater impact

of the profitability of men-owned firms. The ability to secure financial capital also had a

positive impact on the growth rate of men-owned firms, but did not appear to affect the growth

rate of women-owned firms. These findings suggest that the growth aspirations for women-

owned firms may be driven by factors other than human capital or the ability to secure external

capital. (https://scholar.google.co.id/scholar)

What Makes Muslim Women Entrepreneurs Successful? A Field Study Examining Religiosity

and Social Capital in Tunisia

Authors

Authors and affiliations

http://betabicara.com/


82

Lisa E. BaranikEmail author

Brandon Gorman

William J. Wales: 01 June 2017

The present study sheds light upon critical factors that help explain the entrepreneurial success

among Muslim women living in a democratic Tunisia, a Muslim-majority country considered

by many to be the lone Arab Spring success story. We hypothesized that successful

entrepreneurs need social capital, including the capital that comes from marriage and high levels

of wasta (the Arabic concept of having personal connections with influential others). Moreover,

given the lack of empirical attention paid to the role of the culture, language, and customs

associated with Islam on women’s empowerment, we examine whether religiosity is related to

entrepreneurial performance among Tunisian women. Data collected with 84 female

entrepreneurs participating in entrepreneurship training programs across Tunisia reveal that two

forms of social capital, marital status and wasta, are related to training center directors’ ratings

of women entrepreneurs’ performance, suggesting that social capital is a critical asset for

Muslim women entrepreneurs. Religiosity, on the other hand, had no statistically significant

relationship with entrepreneurial performance. Our study contributes to research on

entrepreneurship by identifying wasta as a form of social capital that may be necessary for

women entrepreneurs to succeed in the Middle East and North Africa and by taking an initial

step towards better understanding the empirical (and controversial) relationship between

religiosity and career success among Muslim women. We recommend that training

organizations supporting entrepreneurs directly assist women in the development of social

capital and acknowledge, rather than ignore, that nepotism and wasta are linked to

entrepreneurial success in some cultures.

(https://link.springer.com/article/10.1007/s11199-017-0790-7)

RESEARCH METHOD

The type of research used is descriptive research method. Data used is primary data from

interview with five respondents, whose business are in different fields, culinary ,fashion and

Umroh & Hajj travel.

DISCUSSION

Some of women entrepreneurs with small capital have not done the financial recording well.

This situation also seen from the sources in this study. Some of the entrepreneurs with small

capital interviewed in this study were as follows:

Table 1. Respondents’ Information

Name Business fields Established Initial Investment

Mrs. Rusli Culinary 2014 IDR 200,000

Mrs. Vita Fashion Since study in college IDR 500,000

Mrs Vera Asesoris (bros) 2014 IDR 150.000

Miss Risa Hajj&Umroh Travel 2013 IDR 3.500.000

Mrs Ana Bakery + Rice Box 1994 -

Mrs. Vita is one example of local entrepreneur who has succesful. Her business is fashion that

are purchased by her own money collected from the provision of parents since she were at

college. Once a housewife, the 45-year-old Vita established the boutique . Since she was at

school, she was selling clothes, accessories. At first the customer is her own friends. Now she

used uses social media to offer her wares. selling , Next plan, she want to expand another


83

business. We ask her about the financial statements ,and she answered ; “I have simply

financial statement”.

Mrs. Rusli is another success story. From her loving of baking, she manages the production of

wet and dry cakes. Her husband is very supported.

“ My first order was 30 pieces of pastel and risole within first month of my announcement

through neighbourhood and relation. Now I can supply as many as 500-600 pieces of cakes,”

said the 51 year old woman.

While renting a shop, now she is setting aside funds to buy her own business place. But

unfortunately, she have not the recording for her finances

Mrs. Ana also one of the successful woman with small capital. in the field of bakery and rice

box. She started the business since 1994. At first, She is continued her mother's business which

progressing rapidly while in her hands. Mrs Ana has a promotional strategy to introduce her

business . Mrs. Ana’s bakery products that many customer are interested in is cake and food..

Mrs Ana already has a professionally finance statement.

Unlike Mrs. Ana, Mrs Vera ( one of five respondents) has not managed the financial report

professionally. She started selling her own creations of brooch and necklaces. The initial idea

for business of accessories is the interest of his her friends when he she uses his her own hand

made creation. She has not any strategy marketing and financial report. And her business

become undeveloped. It is important for her to do this business with serious intention.

The last respondents is Miss Risa who has Hajj travel agency, the initial capital is about

3,500.000. She always separating syiar and shopping tool need. The marketing strategy is to

share with the prospective pilgrim and telling the opportunity of this program. Usually, she uses

the brochures, banners, business cards and seminar for promotion. She wants to expand her

business area not only at Surabaya, but also to Makasar, Medan, Palembang and Semarang.

CONCLUSIONS

There are various reason why women start their business. Some are because the necessities of

life such as a pleasure. Most of their business is are supported by their husbands, so they feel

good about it.

Women entrepreneur with small capital have creativity to develop the business. Some of them

have promotion and product strategy, and planning to expand their business area.

Unfortunately, not most of of these women are running their business by doing the correct

recording. They only need to calculate the profit every day without having a financial report.

This is one of the weaknesses in doing business. Businesses become difficult to control and the

wealth of their business is difficult to quantify.

It is important to knows about human capital variables, including education and experience, so

that we can measure the profit of theirs business. And the strategic programs to support the

increase in the number and quality of Indonesian entrepreneurs are capital assistance and

training for entrepreneurs.

LIMITATION OF THE STUDY

1. This study is only performed on adult women, while many young women are also successful

as small capital entrepreneurs.

2. The form of financial records is not attached by the data source due to confidential issues

REFERENCES

falasik.com/cara-mengelola-keuangan-usaha

http://betabicara.com/5-kunci-usaha-sukses-untuk-wanita-wirausaha-modal-kecil/

http://www.republika.co.id/berita/ekonomi/makro/15/07/13/nrfiur-jumlah-pengusaha-umkm-

perempuan-meningkat

http://betabicara.com/5-kunci-usaha-sukses-untuk-wanita-wirausaha-modal-kecil/




84

https://scholar.google.co.id/scholar?q=WOMEN+AS+SMALL+CAPITAL+ENTREPRENEUR

S+JOURNAL&hl=id&as_sdt=0&as_vis=1&oi=scholart&sa=X&ved=0ahUKEwig9p_Wp

6DVAhUDk5QKHVCQCAgQgQMIJzAA

https://link.springer.com/article/10.1007/s11199-017-0790-7

http://www.sihanoukville-cambodia.com/Images/2016c/resto-indonesian-restaurant2.JPG

ttps://www.google.co.id/search?biw=1024&bih=494&tbm=isch

https://scholar.google.co.id/scholar?q=WOMEN+AS+SMALL+CAPITAL+ENTREPRENEURS+JOURNAL&hl=id&as_sdt=0&as_vis=1&oi=scholart&sa=X&ved=0ahUKEwig9p_Wp6DVAhUDk5QKHVCQCAgQgQMIJzAA



https://link.springer.com/article/10.1007/s11199-017-0790-7


85

ENHANCING COMPETITIVENESS SMEs

WOMEN CREATIVE INDUSTRY IN SURABAYA

1Tias A. Indrawati, 2Riza Y. Kurniawan


INDONESIA

Emails: [email protected], 2rizakurniawan@unesa,ac,id

ABSTRACT

This study was conducted to support the increased competitiveness of

women entrepreneurs in the creative industries, especially handicrafts

that have been shown to contribute the economy. The importance of

understanding the obstacles to be able to solve the problem right on

target creative product marketing related business women in the

online business that currently emerging with the rapid world of

communication via the Internet.

This study used the descriptive qualitative method. Data was catch

using observation, interviews and focus group discussion (FGD). The

sample is a handicraft business woman in Surabaya held its products

through online marketing.

The issues raised are how good housewife and a student as women

entrepreneurs can improve marketing and finance in their online

business. Practical knowledge of what is needed to be able to increase

the turnover of the online business.

The result is an increase in the skills they need to be able to increase

its sales. Currently needed include science photography simple using

a smartphone to be able to maximize the product to be marketed on

their online shop. Simple financial records required to be able to

know the financial position that has been generated. Proper

packaging so that the goods can’t be broken up and sold is given the

crafts that have a value will form, with the proper packaging will

make the value of the craft is not reduced due to the damage caused

by shipping. So by knowing these skills need improvement, then the

employer crafts in Surabaya held its products through online

marketing can improve their competitiveness.

Keywords: women entrepreneurs, improvement of skills, creative

industries, online business

INTRODUCTION

Telecommunications rapid development makes the Internet is not new. Marketing world began

to evolve with the advancement of this technology. In 2015, the total value of trade transactions

through the Internet (e-commerce) reached 20 billion US dollars, much improved compared to

2013, which still reached 8 billion US dollars. The Government through the Ministry of

Communication has launched a number of programs targeted to be achieved in 2020, namely

1,000 techno, 1,000,000 farmers and Fishermen Go Digital, 8,000,000 SMEs Go Digital and

Integrated Broadband village in District 187 are categorized outermost, isolated and



86

underdeveloped.(Www.bisnis.tempo.co).These changes lead to competition leading companies

in different areas of design and product development, production, distribution, communication,

and marketing (Singh, Garg, and Deshmukh, 2008)

SMEs play a major role in the Indonesian economy with the ability of the employment rate is

about 97% of the national workforce and contributes to gross domestic product (GDP) of about

57%. Therefore, SMEs have an important and strategic role in national economic development.

In addition, SMEs also play a role in the distribution of development outcomes. With the

evidence of SMEs are not influenced by the economic crisis in the period 1997 - 1998, only

SMEs are capable of standing strong (LPPI & Indonesia, 2015).

Employment population ratio in Indonesia is somewhat higher than the average rate of global,

this is partly due to the high percentage of the working age population and the limited choice of

income outside the world of work. There is a big difference in the ratio of employment

population of men with women, where men are estimated at 89.5 percent in February

2015.while young women estimated 32.6 percent in the same period. In Indonesia, the

participation rate of women in the labor force is very low this is because the number of women

who did not participate in the workforce due to family responsibilities, where there are many

women who claim that they are fully engaged in household activities (ILO, 2015).

Based on a recent study conducted by the Asia Foundation, showed that about 23 percent are

women entrepreneurs. The total, grew 8 percent each year. Some female entrepreneurs are in the

micro and small scale. Data from the Ministry of Cooperatives and SMEs in 2015 was recorded,

from about 52 million SMEs in Indonesia, 60 percent of businesses run by

women.(Http://www.republika.co.id)

The economic value of a product or service is no longer determined by the raw materials or

production system, but rather the use of creativity and creation of innovation through the

development of increasingly advanced technology. This is called a new economic era that

prioritizes the information and creativity that is popular with the title of Creative Industries or

the Creative Economy is driven by the industrial sector concerned in the field. The creative

industry itself is a development concept based capital of creativity that can potentially increase

the economic growth and social welfare. The concept of the creative industry itself is creativity-

based activities that affect the economy and welfare of the community, the small-scale

industries such as handicrafts in the city of Surabaya is one of them.

During this growth creative industry in Indonesia has a particularly prominent economic

contribution in the field of fashion and crafts. So naturally when the government gave serious

attention to the development of creative industries. As presented MEMPERIN during the

exhibition "Fashion Products and Accessories" at Plaza Exhibition Industry, the Ministry of

Industry, Jakarta, Wednesday (12/8) that the added value of the creative economy sector is

estimated to reach Rp. 11 \ 1.1 trillion. The highest contributor of added value, among other

sub-sectors of fashion, food, and crafts (www.kemenperin.go.id).

In 2015 digital industry online store is already crowded, but with the power of the Internet

network faster and devices that support the application, then the phenomenon of online stores is

believed to be further strengthened and increased in 2016. This is because the Internet

technology fourth generation (4G LTE) has been unveiled by the government.

(www.dimbleweb.com)

Rapid telecommunications development makes the Internet is not new. Marketing world began

venturing developed with the advancement of this technology. Digital marketing research

institution E-marketer estimates that in 2018 the number of active users of smartphones in

Indonesia for more than 100 million people. With that amount, Indonesia will become the

country with the fourth largest smartphone active users in the world after China, India, and

America. (www.kominfo.go.id)The world of marketing is growing with the advancement of this

technology. Such changes leading companies to compete simultaneously in different dimensions

http://www.bisnis.tempo.co)/

http://www.republika.co.id)/

http://www.kemenperin.go.id/


87

such as product design and development, production, distribution, communication, and

marketing (Singh, Garg, and Deshmukh, 2008)

The main activity is trading in Surabaya. Geographically the city of Surabaya has been created

as a trading city since Majapahit Period until today. As a business town lasted all the activities

and facilities that support. Today, the trading activity in Surabaya not only serve the needs of a

local and national but also international trade. This study triesto be identified in order to

increase the competitiveness of SMEs female creative industries in the city of Surabaya.

LITERATURE REVIEW.

A. Micro, Small and Medium Enterprises (SMEs)

SMEs picture can be seen from the aspect of business and entrepreneurial nature of the

SME entrepreneurs. In accordance with Law No. 20 the year 2008 on Micro, Small and Medium

Enterprises (SMEs):

1. Micro, is a productive economic activity belonging to individuals and/or entities that

meet the criteria of individual businesses, Micro as stipulated in this Law.

2. Small Business is a productive economic activity that stands alone, carried out by an

individual or entity that is not a subsidiary or not branches of companies owned, controlled, or

be a part either directly or indirectly from medium or large businesses that meet the criteria of

business small referred to in this Act.

3. Enterprises Medium is an economic enterprise productive stand-alone carried by an

individual or business entity that is not a company or branches of companies owned, controlled

or be a part, directly and indirectly with a small business or large enterprise with total net assets

or result in sale annual as stipulated in this Law.

The term comes from the word entrepreneur entrepreneurship. Entrepreneurship is a tool from

the tool life view someone who wants their freedom in the economy to create something new by

using existing resources. To achieve this, of course, a necessary skill in exploiting the

opportunities through a variety of business opportunities, the ability of proper risk management

decision to achieve opportunity, and through communication skills and management expertise in

mobilizing human, financial and material resources to produce a good project. (Ranto, 2007)

Definition of women entrepreneurs according to Meng & Liang (1996) is defined as a business

owner who has the initiative, accept all the risk and finance, responsible administration, social

and effective lead management.

The condition of women entrepreneurs in Indonesia to experience rapid growth. The fact that

women were open for business 2.4 times more than men, but the impact is not at all small. The

companies owned by women employ over 15.5 million employees, or 35 percent more than all

employees of Fortune 500 worldwide. Despite their businesses tend to be slower than the

company man, his power is higher than the overall business. Although 72 percent of women-

owned businesses concentrated in the areas of retail, services, women entrepreneurs thrive in an

industry previously dominated by men such as manufacturing, construction, transportation, and

agriculture. This condition can also be seen from the number of new women's cooperatives and

its diverse businesses small and medium enterprises are formed and success. (SMECDA 2006)

C. Creative Industry

According to the Ministry of Trade (2009, H.5), Creative Industries is an industry that

comes from the use of creativity, skill and talent of individuals to create prosperity and jobs to

generate and empower the creativity and inventiveness of the individual. Simatupang (2008,

h.69) also explains that the creative industries are industries that rely on the talents, skills and

creativity which is a basic element of every individual. The main elements of the creative

industries are the creativity, skill, and talent potential to increase prosperity through offering

intellectual creations. Meanwhile, among the experts in these fields, seems to be no fundamental

discrepancy between the Creative Economy Creative Industries. Judging from the aspect of


88

practical need is not a serious problem. In general, it can be said that both of them implies

creativity-based activities that affect the economy or welfare of the community.

The scope of activities of the creative economy can cover many aspects. Department of

Commerce (2008, H.4) identified at least 14 sectors included in the creative economy, namely:

1) Advertising

2) Architecture

3) Art Goods Market

4) Handicraft

5) Design

6) Fashion

7) Film, video, and photography

8) Interactive games

9) Music

10) Performing arts

11) Publishing and printing

12) Computer services and software

13) Radio and Television

14) Research and Development

Can be seen the extent of coverage of the creative economy, most of the economic sectors that

do not require large-scale production quantities. Unlike the manufacturing industry oriented

product quantity, creative industries more reliant on the quality of human resources. More

precisely the creative industry emerged from a group of small and medium industries.

D. Competitiveness

According to the Indonesian big dictionary (KBBI), the strategy is defined as the science

and art of using all the resources of the nation to implement a certain wisdom in war and peace.

While some other sense of competitiveness, namely:

1. According to the Council on Competitivenessin Washington, DC, in 2006, the nation's

competitiveness is the capacity to face the challenges of the international market competition

and maintain or increase its real income.

2. According to the European Commission in 1999, the competitiveness is defined as the

ability to produce goods and services that meet international testing, and at the same time also

be able to maintain a high level of income and sustainable, or the ability to generate local

income and employment levels are high remain open to external competition.

Anton et al. (2015) found that the competitiveness of SMEs originated at the level of innovation,

entrepreneurship, human capital, financial resources, market potential and business strategy.

SMEs also need government assistance to develop marketing networks and access to financial

institutions. In the case in Indonesia Tambunan (2009) found that their competitiveness can be

improved through human resources, working capital, as well as management expertise and

technology.

In the perspective of development, SMEs can be classified into four (4) groups: [3]:

1. Livelihood Activitiesis an SME that is used as a job opportunity to earn a living, which is

more

commonly known as the informal sector. Examples are hawkers

2. Micro Enterprisean SME that has the properties of craftsmen but do not yet have an

entrepreneurial nature

3 SmallDynamicEnterprise an SME that already have an entrepreneurial spirit and able to accept

work sub-contracted and export


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4. Fast Moving Enterprise, isSMEs already have an entrepreneurial spirit and the will to

transform into Big Business (UB) one law is the reference product and development for

SMEs in Indonesia is law No. 20 the year 2008 on Micro, Small and Medium

Enterprises.

RESEARCH METHODS

This study used the descriptivequalitative method. Data taken with the observation, in-depth

interviews and focus group discussion (FGD). Samples are the women entrepreneur in the field

of creative industries are mainly craft in Surabaya. SMEs have been using social media and

websites to market the products of creative industries.

Surabaya as the second largest city in Indonesia has a population of the diverse community from

migrants seeking jobs in Surabaya so that students and students. Current trends work is work

that can be done at home, especially for mothers,

The focus of this research is the disclosure process and interpretation of meaning. In this study,

held assumption that women and entrepreneurs not only be termed as a relationship but also on

the pattern of action or interaction with the surrounding conditions entrepreneurial development

effort

Based on these assumptions, this study focused on a qualitative approach. The qualitative term

refers to the process and meaning that are not tested or measured strictly in terms of quantity,

intensity or frequency, the emphasis given to the nature of the social construction of reality and

look at how social experience is shaped and given meaning (Denzin and Lincoln, 1994).

According to Denzin and Lincoln (1994), Creswell (1994) and Maxwell (1996), for research

that focuses on the disclosure process and interpretation of the meaning of the qualitative

approach is more relevant. A qualitative approach here means how qualitative research methods

and techniques.


As the second largest city in Indonesia, Surabaya is a business hub where it means a lot of

trading activity carried out in the city. This activity has an impact one of them is garbage. As we

know that for this kind of garbage bins are difficult to recycle. Large companies supporting the

provision of waste management related skills. Surabaya is mainly urban vase is one in which the

place is finally emerging entrepreneurs recycling craftsmen. Creative industries thrive on the

creativity of the use of the waste that can’t be destroyed by itself. Plastic waste one of them,

residents of the vase makes the work of these materials to produce products that have more

value.

Housewife recycling business owners, for example, to produce other products from plastic

materials as well as waste paper. Mrs. Kayubi is one of the creative industry employers where

his work in the form of bags and purses from used plastic packaging material. Mrs. Retno is one

of the woman entrepreneur in craft bag made of cement bags. Mrs. Tris processing scrap

materials from plastic cups, plastic bottles, bottle caps, cap gallon and others. Mrs. Tris many

craft into a flower, clothing and another carnival.

Here creativityshowed by woman entrepreneur Surabaya where the results of their work on the

materials used in the form of plastic waste and waste paper into products that can be sold into

the market through the online store either a blog or Website. The student of one of the

universities in Surabaya also no less creative by making their own products such as pillows


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different shapes and scrapbooks, where they also do marketing of their products through an

online store.

The Context of marketing online offers convenience and new media in marketing

communications media. Segal product is basically the things that can be marketed and able to

satisfy customers when worn or used (Morissan, 2010: 75). In promoting the product in online

business then upload photos of the products are things that must be done by an online business

entrepreneur. So the photos have displayed that is used to communicate what products are sold

to buyers.

Recycled handicrafts produced Mrs. Kayubi shown in his blog daurulangyobi.blogspot.co.id.

While Mrs. Tris using trisflower.com to display their products. This she expressed in the

following interview excerpt:

"... My Product in photo using my child's mobile then uploaded to the web by my husband

.." (Mrs.Tris, July 26th, 2016)

In contrast to housewife, Dea an Ervira choose using social media such as Facebook and

Instagram. This he expressed in the following interview excerpt:

"... photograph the order of my friends on the phone then uploaded on Instagram

@moody_handicraft account, so friends can see my scrapbook example... "(Ervira,

August 5th, 2016).

From the interview above it can be seen that the small business crafts display only modest

picture. They used a camera phone to take a picture and upload it on their online store. Judging

from the photos in their online store seemed to see less professional. They only show sober. One

picture speaks more than a thousand words, this motto is widely known among lovers of

photography. A good image to attract the attention and tells the events in the pictures though

without using words.

These handicraft entrepreneurs realize that the display of photos in online represents their

products in order to avoid questions that are too much for such products. As disclosed in the


"... The picture is indeed because if the photo in the studio so expensive, but sometimes

they ask a lot more because the picture is less clear

...." (Mrs. Retno, July 23, 2016).

DeaNatania @bantal.id business owners displaying their products through Facebook and

Instagram.Nonetheless,Dea still wants to improve the image quality of the products as described

in the following interview excerpt:

".... Photography is currently the most important to attract customers to our products, I

want to learn to maximize photos from my smartphone for more professional product

displays... "(Dea, August 6th, 2016)

If the note of the interview above, we see that the photos displayed on social media, blog or web

are part of the activities to advertise their products. Advertising (ad) over the Internet is

advertising delivered via the Internet (Rangkuti 2009: h.229). So that advertising or ads that are

implemented in the internet marketing as a function is still the same but used in a different

container. So in advertising its products to consider things that can attract buyers.

Packaging is a complex subject that has become an important part of any promotional product,

although devoted to consumer products, and this can’t be separated from sales. Should be able

to distinguish between the packaging and the packaging, although both are often synonymous.

Packaging includes the whole concept including packaging directly, outside, wrapping and

others, and part of that whole role in the marketing and display. A good package will not sell


91

any product if the packaging concept is not appropriate, and also will not sell a bad product. A

poor packaging could give a bad image of the product which is very good, however well

thought up the concept of packaging (Danger, 1992: 3).

Packaging linking promotional support provided by the manufacture shelf space laid out by the

retailer, and the needs and desires of last buyer (Danger, 1992: 4).

Online marketing is also walking regardless of the delivery of goods, as we know that the online

buyer can from outside the region or even from abroad. This makes the shipping of goods is one

thing to note by online entrepreneurs. When in the store businessman adequately prepare

conventional plastic or paper bags to carry their products. It will be very different when the

product needs to be packaged for delivery, it is also given that it is associated with other parties,

namely freight forwarder.

Courier services not only bring our products just so that entrepreneurs need to think about

how the product packaging to avoid damage when up purposes. Moreover, handicraft products

are especially vulnerable so need a lot of rethinking packaging. It is as expressed in the


"... I once got an order from Jakarta for a recycled plastic wallet for Rp 50.000,00.

Customers usually ask to be sent using heavy but this can damage the product, I explain

better using the volume (cardboard) so that the product is not damaged but the postage

becomes more expensive it turns them down and not so buy.... "(Mrs. Kayubi, July 21st,

2016).

As experienced by Ms. Kayubi, postage because packaging can make customers

discouraged buying. Mrs. Retno Made bags from Sack Cement vulnerable when packaged

plastic and isolated to avoid package packing volume, this gives rise to high postage due if

heavy wear it is possible to damage the product, whereas if the packaging using cardboard than

the postage used are volume becomes more expensive. This is expressed in the following

interview excerpt:

"... .. I once got an order of one bag and the customer asked to be packed with a box

because it is expected to be weighed not volume considering the box is not too big, but it

turns out to reach the expedition place is subject to volume. After reconfirming the

customer objection and not so buy. "(Mrs. Retno, July 23rd, 2016).

Asked about the package delivery, Dea explainedin the following interview excerpt:

".....If the pillow heavily hits, the pillow I packing use isolation let me compress and not

get the volume, if the person he bought the two packing is not separated so hit 2 kg, if the

taxable volume is expensive. Customers do not want to usually get 2 kg...... "(Dea,

August 6th, 2016).

Ervira from the beginning has been to prepare packing boxes for his scrapbook products,

it is linked also to store the product itself. So for packing sent then ervira wrap it with brown

paper explained in the following interview excerpt:

".....My scrapbook box plastic safety continue I love the box so let the buyer is not

confused to save it because scrapbook like a photo album, well if you want in the package

I add brown paper to the outside ... .. "(Ervira, August 5th, 2016)

Judging from interviews on appearance that packaging for packets need attention. Dea

around the packaging with sealing up small form because their products are less susceptible

cushion the damage then this can be done. Unlike the recycled products Mrs. Kayubi dan Mrs.

Retno which there are some that can be made of plastic packaging, but there should be packing


92

boxes. And it is difficult for employers. Ervira better prepared in packaging by providing a box

in addition to keeping the product also to facilitate the delivery packaging.

As is understood that the existence of accounting is very useful for SMEs, as it is a tool that can

help business decision-making. In addition, it is also useful accounting information in order to

construct a variety of projections, such as projections of cash needs in the future, control costs,

measure and improve productivity and provide support to the production process.

An attempt can’t be separated from the activities of sales and out of money. In addition to the

products delivered, online sales also use banking services in terms of payment for the sale of

products. Mothers craft entrepreneurs have not been doing financial records related to revenue

from sales and expenses during the production process until the product is sold. Dea itself as an

engineering student was completely unaware that he had no basic bookkeeping as expressed:

"... .If I still need to manage financial finance is the same as learning bookkeeping is good,

the same entry flows out because there is no basic there...." (Dea , August 6th, 2016).

The ability associated with the financial statements are often considered trivial by SMEs,

without realizing that by having a financial report many benefits they get. By having their

financial statements to determine its profits. Financial Statements can also be used as evidence

to apply for a loan if employers need additional capital.

When asked about the employer’s concerned many companies or parties who make frequent

service training in order to improve their business competitiveness This he expressed in the


"... Usually many people who do training on online marketing in general only.... "(Mrs.

Kayubi, July 21, 2016).

While Mrs.Tris as collecting flowers from recycled paper reveals:

"... . If in Jambangan this yesterday we made the training of recycled goods making, but if

the marketing of our own, the friends gathered to me and my husband who takes care of

his web... .."( Mrs. Tris, July 26, 2016)

Asked about online marketing training related to the complaints by employers on display

products and packaging to delivery. This is expressed in the following interview excerpt:

"... Not there we never asked, any training we just follow...."(Mrs. Retno, July 23, 2016)

What about the training on financial statements that are often a part of the training. This he

expressed in the following interview excerpt:

"... It's a lot of theory I do not have time to do it... .."(Mrs. Tris, July 21, 2016)

Training in accounting will determine how well the ability of a manager to the technical mastery

of accounting. The more a manager of accounting training, the better the ability of the managers

to use accounting information, (Hadiyahfitriyah, 2006).

Results of interviews with female entrepreneurs fields of creative industry, it appears that the

resulting product is a form of its intention. Recycling entrepreneur can create a wide range of

products from scrap materials that may not think by others. In addition to reducing the amount

of waste that is not biodegradable, the craft can replace the function of the product. Bags of

cement paper, for example has the power to bring the goods without fear of tearing. Plastic

packaging can look beautiful with woven into a variety of versatile wallet. Plastic bottles can be

transformed into ornaments to beautify the room. Beautiful pillows that can be more personal


93

items for the owner. Creativity stick to make a scrapbook is the result of the wills of skilled

hands that display the photos to appear more beautiful and meaningful. While the characters

into the pillow cushions, more personalized, unique because not all have it.

With their online marketing opens wide opportunities for entrepreneurs who have products to

market extensively. The photos represent products sold need to be considered for one picture

speaks more than a thousand words. While the use of delivery services have consequences for

how employers can package products to be intact arrived at the destination. Lastly, employers

need to evaluate its performance by looking at the existing financial statements. Because of the

financial statements can be viewed ahead of a business.

CONCLUSION

Good online marketing using blogs, web and social media brings a great opportunity for

entrepreneurs to market their products. Surabaya as a trade city a consequence the number of

companies operating in Surabaya. This provides an opportunity for the citizens of Surabaya to

obtain various kinds of training that run from the companies or agencies.

Activity increased competence to enhance the economic competitiveness of Surabaya citizens,

especially women is necessary because 60 percent of businesses run by women. But there must

be responsive education and training in accordance with the need to support improving the

quality of entrepreneurship. Therefore both companies and agencies who want to do the training

needed to figure out what kind of training requirements needed by entrepreneurs.

This study is confined to the training needs of SMEs excavation creative industries woman in

Surabaya and do the marketing through online. SME creative industry has to prove its existence

and needed support related training photographer, packaging and simple finance to improve

their competitiveness.

Future studies could explain how the contribution-based training needs in order to develop

SMEs in rail. This study is expected to contribute to their development of creative industry

which jointly suppots the national economy and the environment.

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CHANGE MANAGEMENT: AN ISLAMICS PERSPECTIVE

1Hafid Kholidi Hadi, 2Anik Lestari A


INDONESIA


ABSTRACT

This paper attempts to review the literature on the Islamic values and

change management, then presents the importance of its delineated

dimensions. Two main theories of Islamic perspective and practices are

discussed comprehensively based on the Qur’an verses as the ultimate

source in Islamic thinking. The review includes the comparison between

certain components’ implementations. This reveals that each of

dimensions are clearly change management. It suggests that Islamic

emphasizes on commercial activities which denied the authors’ opinions

on its’ teaching for not governing the materials aspect or success in

change management. The Islamic religion seeks to deliver the goodness

to all mankind according to its rules and principles. The integrated

system of the Islamic worldview encompasses all aspects of both worldly

and hereafter- including the aspect of change management. The

researcher have three part Islamic for change management such as

human, development and change. We need other Islamic perspective for

change management that can add many reference for other researcher

Keywords: Islamic values, Islamic practice and change management

INTRODUCTION

"There is nothing eternal in the world except the change itself". This is an ever-changing

analogue of the world. The theory of change has actually been discovered by Darwin with his

theory of evolution. Darwin's revelation associated with the theory of evolution "survival in the

fittest" is related to something that is adaptable. Darwin's claims relate to the living beings of

the world that can survive that are compatible with the state of nature. In other words, Darwin's

theory is related to natural selection. This theory can help each other and no few companies

can’t change with existing conditions it will fall by itself

Companies can’t adapt to the environment then the company is heading for destruction. We can

see some companies are destroyed because they can’t adjust to the state of the market. Examples

of companies destroyed because they can’t adapt to the environment. First Nokia, this company

has become the king of mobile phone companies in the world. Nokia phones are excellent in the

hearts of consumers around the world. But since the existence of smart phones, Nokia did not

quickly catch the changes that are in the market. The second example of Blackberry to be a

pioneer of Smartphone, but lost to compete with the late Samsung lost also in the market.

Samsung used to be scorned by Sony but now Samsung has left Sony. Another example that

exists in Indonesia and still warm in our minds, how minimarket Seven Eleven that must close

and lift the foot from Indonesia because it can not compete with other competitors.

Examples of companies that are destroyed by change can explain the importance of a change. In

other words, we are required to adapt to the environment, otherwise we will be crushed by the



96

change. This is in accordance with Darwin's theory of natural selection. After studying the case

of a falling company because it can’t adapt to the environment and its relationship with

Darwin's natural selection toe. The question is why should we change?

Change Management

According to kasali (2010) First, change is a sign of life. We used to be a baby who really need

the help of others, then after growing up we begin to reduce dependence with others. Similarly,

companies and products that have life cycles such as living beings are born, developed, old and

died. It is like the life cycle of a product such as introduction, growth, mature and decline. Many

companies enters the introduction period then immediately decline because it can’t be accepted

by the market.

Second, change gives hope. Any change will give hope. We feel every turn of the Country

leader there is hope for the better. But basically every change is not all changes give the

appropriate expectations.

Figure 1. Sigmoid Curve

When viewed figure 1 , that a company will grow and then fall down in the phase of maturity.

Therefore, they should make changes to their developing. Examples of companies do not make

changes when changing as developed by Nokia that does not directly respond to the existence of

a smartphone. Therefore, they have to pay dearly by far behind by its competitors. Companies

that do not want to change because they feel comfortable with the situation that is facing

develop and then they are lulled.

According to Kotter (2002) the reluctance to change is influenced by the first, satisfied with the

performance of the company. Second, do not want to move or stop in place and protect

themselves do not want to receive input from others. It could be because they are panicking and

fearful of a change. Third, pessimistic for fear of change then many companies that do not make

changes.

Change management in islamics perspective

Human The Islamic context in the management of change originated from the creation of man. Man was

created by Allah SWT as a perfect being. This is also evidenced by Darwin's theory of natural

selection. Man is a creature created by Allah SWT is the most adative to change. Humans can

survive to this day because it is adative to the environment. This different from the large and

powerful dinosaurs but in fact they can’t survive until now.

According to Majid (2003) the natural basic law of all that exists is "change and development",

for: all these things are God's creation and development by Him in an unrelenting process. This

revelation explains that human beings are created to continue to evolve and change. Both of


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these things have become human nature created by Allah SWT. In addition, human beings are

created to constantly evolve and grow in a better direction.

According to Al Qur’an, S. Al Qashash (XXVIII); 20 “ a man came from the uttermost part of

the city, running. He said: O Moses! Lo! the chiefs take counsel against thee to slay thee;

therefor escape. Lo! I am of those who give thee good advice”. This Qur'anic doctrine explains

that we are asked to grow and develop ourselves for the better. Basically a human born to the

dead is developing and a sign of a life

Development Based on Al-Mujadila 58:11 “O ye who believe! when it is said unto you, Make room! in

assemblies, then make room; Allah will make way for you (hereafter). And when it is said, Come

up higher! go up higher; Allah will exalt those who believe among you, and those who have

knowledge, to high ranks. Allah is Informed of what ye do”. In verse has given doctrine about

capacity building. We are encouraged to increase the scientific capacity and skill that we

possess wherever we are. This is in accordance with the opinion of Rafiki and Wahab (2014)

about the concept of self-development that is in the Qur'an.

Rasullah SAW said: "Demanding knowledge is a duty for every Muslim man and woman".

Allah gives virtue and glory to those who are knowledgeable in His word in Al-Qur`an Surah

Al-Mujaadilah verse 11: "Allah will exalt those who believe among you and those who are given

knowledge of some degree". Hadith and verse al qur'an above shows that we are required to

study or in other words increase our capacity in order to develop for the better.

“But (as for) those who believe and do good works – We tax not any soul beyond its scope –

Such are rightful owners of the Garden. They abide therein”(al A’raf: 42). In this verse we are

asked to run the worship is no longer a duty or burden but a willingness or a requirement. This

is also in accordance with what has been delivered Rafiki and Wahab (2014) about continous

improvement in the concept of al qur'an.

Change management in Islamic Human and development are two very related things. In accordance with the characteristics of

change according to kasali (2010) that the nature of change is due to the sign of a life. Therefore,

after we discuss and develop then we will then discuss the nature of change in the Qur'an and

hadith.

The first verse QS Al-Anfal [8]: verse 53 “That is because Allah never changeth the grace He

hath bestowed on any people until they first change that which is in their hearts, and (that is)

because Allah is Hearer, Knower” .This verse describes a pleasures given by Allah SWT. If we

change the favor then God will not change the favor. This corresponds to a sigmoid curve that

explains if we do not change at the time the company is growing, then we will reach the level of

maturity. Thus the sigmoid curve suggests making changes as we progress

Problems about the changes in accordance with Al Qur’an Surah Ar-rad verse 11 ” For him are

angels ranged before him and behind him, who guard him by Allah’s command. Lo! Allah

changeth not the condition of a folk until they (first) change that which is in their hearts; and if

Allah willeth misfortune for a folk there is none that can repel it, nor have they a defender

beside Him. This verse explains if we change, then we will be crushed by the change”. In

accordance with the sigmoid curve that explains after the company develops then the next level

is maturity. At this level the company must make changes (or jump to the second curve)

otherwise it will lead to the gate of destruction. In accordance with the doctrine above, that God

will not change a people if the people do not change. Just as with the company, if the company

does not want to change it will lead to the gate of destruction.

"Whoever his day (today) is better than before, then he has been lucky, whoever his day as

before, then he has lost, and whoever is more ugly than ever, then he is classified as the cursed"

(alhadith) "Whoever is two days (today and yesterday) the same then he has lost, anyone who

day is worse than the previous day then he was classified as the cursed". The origin of this


98

hadith is unknown except in the dream of 'Abd' aziz Bin Abi rawaad, he says "The Prophet had

a will to me in a dream, with the added word at the end" (HR al-baihaqy), possibly the

additional contents are " Then he is in need.

In the above hadith explained that the Prophet invites us to be better every day from time to time.

It aims to improve our ability and capacity in life. In addition, to face a changing world, we are

required to improve ourselves every day. Nothing is eternal except change itself, and therefore

we have to improve every day, month and year in order not to be crushed by such changes.

Tabel 1. The Al-Qur’an reference of Islamic change management

NO Subject Al-Qur’an Verses

1 Human Al Qashash (XXVIII); 20, an-nas,

2. Development Al-Mujadila 58:11, hadist

3. Change management Ar-rad ayat 11, Al-Anfal [8]: ayat 53

CONCLUSION

Figure 2. Change Management in Islamic

Management of change in Islamic perspective consists of 3 parts of human, development and

change. This corresponds to the sigmoid curve present above. Companies are required to make

changes as the company develops. It corresponds to the doctrine of the Qur'an and hadith.

Therefore, the management of change in the perspective of Islam is in accordance with the

teachings of Islam. We hope there are other authors who provide a new reference to change

management in an Islamic perspective.

REFERENCES

Al Hadits

Al Qur’an

Kasali, Rhenald (2010), “Change!: Manajemen Perubahan dan Manajemen Harapan”, Gramedia

Pustaka Utama.

HUMAN CHANGE DEVELOPMENT

Al Qashash Al-Mujadila Ar-rad

CHANGE MANAGEMENT

IN ISLAM


99

Kotter, John P & Cohen, Dan S (2002), The heart of change : real-life stories of how people

change their organizations. Boston: Harvard business Press

Majid, Nurcholis (2003), Islam Doktrin dan peradaban: Sebuah telaah kritis terhadap masalah

keimanan, kemanusiaan dan kemodernan. Jakarta: Paramadina Press.

Rafiki dan Wahab (2014) Islamic Values and Principles in the Organization: A Review of

Literature Asian. Published by Canadia n Center of Science and Education.Social

Science; Vol. 10, No. 9; 2014ISSN 1911-2017 E-ISSN 1911-2025


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THE INFLUENCE OF LEADERSHIP, MOTIVATION, AND

DISCIPLINE ON EMPLOYEES’ PERFORMANCE

PT. LMA

1Yenny Kartika Halim, 2Trianggoro Wiradinata♠


INDONESIA


ABSTRACT

This study aims to analyze and prove the influence of leadership,

motivation and discipline on employees’ performance. This study

provides some recommendations on how to improve employees’

performance. The study was conducted at PT. LMA Surabaya 2017. Data

were collected through questionnaires and distributed to 60 people. This

study used a quantitative method with Likert scale measurement. The

data were analysed using SPSS program. Improved leadership qaulities,

motivation and discipline would improve employees’ performance

outcomes. The results of this study produce recommendations for future

job improvements related to leadership, motivation, discipline, and

employee performance.

Keywords: leadership, motivation, discipline, performance and employee

performance

INTRODUCTION

In Indonesia, a family business is one of the biggest business opportunities. A lot of

entrepreneurs in Indonesia hold principles of a family business. Family business is one of the

most consistent and flexible businesses that are subject to change and adapt to very fast and

uncertain economic growth. "For the first time, US-based audit firm Price Waterhouse Cooper

(PwC) conducted a survey on family business in Indonesia. From the survey, more than 95

percent of companies in Indonesia are family businesses "(CNN Indonesia, 2014). From the

results of PwC family business audit is a very dominant business in Indonesia.

PT. LMA is a family business owned by one owner and his children. PT. LMA is a stockist

business and engineering good distribution. It has been run for more than 30 years. At the

beginning of its establishment, this company only sold spare parts for travos and inverters. After

several years, PT. LMA has expanded its business by moving in the field of techniques such as

"Generator, Compressor, Hoses, Water Pump and others".

The company realized the importance of making some changes. However, the management of

the company did not know how to do and change. The writer got permission from the owner of

the company to do a research. PT. LMA had a lot of problems that needed to be solved. In this

study, the existing problems of the company will be discussed, covering the style of leadership,

motivation, discipline, and employee performance.

The style of leadership at PT LMA was authoritarian despite the fact that other companies have

changed their leadership styles from being conventional to being professional. Although PT.


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LMA has already had some professionals, all decisions were taken by the owner. The

authoritarian leadership made employees reluctant to give feedback to superiors. In this research,

the writer is seeking some strategies that help the company make some improvement.

PT. LMA never gave rewards to motivate the employees. While the programs have not been

well prepared employes had no challenge to improve the performance of PT.LMA. Punishment

and reward stretegies have never been employed that enable employees to reflect upon their

performance.

Having good discipline work ethos in business is very important. However, when inconsistency

takes place, employees will feel difficult to provide good performace at work. PT. LMA has

long experience the shortage of discipline. It is due to a lack of firmness from the head of the

department at the company. For example, they were often late to come to work. They even

missed their work hours.

Table 1.1 below describes a three-month absence from PT. LMA. This table shows the

attendance of all employees every month

Table 1. Employee Attendance at PT. LMA 2016

Month Enter Permission/Miss Late Go Around

June 1,221 (78%) 230 (15%) 85 (5%) 24 (2%)

July 980 (82%) 130 (11%) 70 (6%) 20 (1%)

AUgust 1,256 (80%) 200 (13%) 80 (5%) 24 (2%)

Source: Employee Attendance Card (2016), (day/month)

Authoritarian and inflexible leadership styles, lack of motivation, and work discipline are

problemes at PT. LMA. This company is committed to change the existing system to make the

performance of employees and leaders better.

LITERATURE REVIEW

Leadership

Leadership is a factor or process of giving direction by leaders to followers in an effort to

achieve success. Without effective leadership, individuals and groups tend to have no direction,

no complacency and less motivation.

According to Judge (2007) in Mappamiring (2015) leadership can be explained by concepts like

this "Leadership is a force that flows in unknown ways among leaders with their followers,

encouraging followers regularly to gather energy into formulated targets together. Working

towards goals and achievements gives satisfaction to leaders and their followers. "

According to Sarros and Butchatsky (2007) in Sari (2014), leadership is a behavior with a

specific purpose to influence group members’ activities in order to achieve common goals to

benefit individuals and organizations

Motivation

According to Herzberg (1966) in Juniantara (2015) motivation is divided into two factors:

motivators or often referred to as intrinsic motivation and hygiene factor or often called

extrinsic motivation. Motivator is a factor that comes from within oneself. It is a desire to move

forward and achieve. Hygiene factors prevent dissatisfaction. These factors do not lead to

satisfaction and they are usually derived from company’s policy.

Herzberg (1996) explains two factors of motivation. There are 9 indicators that make upp these

two factors.

A. Intrinsic Motivation

Intrinsic motivation is the motivation that exists within oneself. This motivation drives one to

excel and desires to get something better than before. Intrinsic motivation is better known as


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motivational factor. According to Herzberg (1996) in Juniantara (2015), there are four

motivational indicators:

1. Achievement (Achievement work) is the success of an employee in completing tasks.

2. Advancement (self-development) is a person’s desire to develop a career in the field of

finance.

3. Work itself (job itself) is a variation of work and control over methods and work steps.

4. Recognition means the employee gains recognition from the company that gives rewards or

praises because of achievements.

B. Extrinsic Motivation

Extrinsic motivation is a motivation that comes from outside people. This factor helps people

determine theur behavior in life. This factor is known as as hygiene factor theory. Herzberg

(1966) in Hong and Waheed (2011) has classified five indicators of hygiene factors:

5. Company policy (corporate policy) is a rule established by the company as a management

guidance to carry out activities

6. Relationship with peers (relationship with colleagues) is communication between employees

in completing tasks.

7. Work security (job security) is the employee's individual perception of employees’ variability

in terms of reward values, regional mutation, opportunities of termination of relationship.

8. Relationship with supervisor (Relationship with superiors) is a major element of employees’

job satisfaction.

9. Salaries are financial rewards earned by employees including wages, bonus premiums, and

benefits.

Discipline

Discipline is based on people’s desire to do good and right work. Being disciplined also refers

to people’s attitude, behavior and willingness to do things in accordance with written or

unwritten rules.

Discipline in work can be interpreted as follows: "The awareness and willingness of a person is

to comply with all corporates’ rules and social norms." Hasibuan (2002) in Evanita (2013)

Consciousness is a voluntary attitude of a person to obey all rules or order while they are aware

of their tasks and responsibilities. Willingness is people’s act, attitude, and behavior which are

in accordance with companies’ written or unwritten rules.

Employees’ performance

Performance is an end result of a job people do. The result can be either good or bad. Good

results show good performance. According to Maharjan (2012) in Juniantara (2015)

performance is a result driven by motivation or satisfaction towards work people do.

Anwar King Mangkunegara (2009: 67) argues that: "Performance is related to quality and

quantity of work achieved by employees in performing their duties according to with their

responsibilities".

Sedarmayanti (2011: 260) states that: "Performance is a translation of meaningful performance,

work of a worker, a management process or an organization as a whole where people have to

show through evidence, and their work is measurable (compared with the prevailing standard). "

Research Hypothesis

The hypotheses of the present study are as follows:

H1: leadership has a positive and significant effect on employee’s performance.

H2: Motivation has a positive and significant effect on employee’s performance.

H3: Discipline has a positive and significant effect on employee’s performance.


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Figure 1. Research Model

RESEARCH METHODS

Research design

This research was designed to investigate the relationship of some variables. Researchers used a

quantitative research method. The data were gathered through questionnaires. The variables

included leadership style, motivation, discipline and employee performance. These variables are

described in accordance with their respective indicators.

Variable Research

This study examines the relationship between three variables:

1. Exogenous variables (free) are variables that affect other variables. There are three exogenous

variables in this research: leadership (X1), motivation (X2) and discipline (X3).

2. Endogenous variable (bound) is a variable influenced by other variables such as employee

performance (Y).


The population of the present study involve sixty employees of PT. LMA. The sample size was

determined using Slovin formula: Sampling method used was Saturated Sampling. This

sampling technique was used in this study because the numbers of employees were too few than

the overall employee population. All employees were included in the samples.

Data Type

The data of this study were quantitative data. The data were analyzed using multiple linear

regression statistics. According Sugiyono, a quantitative research method can be interpreted as a

research method based on positivism philosophy. This method was used to examine the

population or particular samples. The samples were selected randomly. Statistical computation

was employed to test the hypothesis (Sugiyono, 2012: 7).

Data Gathering Techniques

The data were gathered using questionnaires. This data gathering method was chosen since it

was cheap and very practical to obtain the data. Moreover, the data collection could be directly

done in the research sites. The question scores in the questionnaire were rated using Likert scale.

FINDINGS AND DISCUSSION

The Description of Respondent's Characteristics

The characteristics of respondents is a description of the existence of respondents involved in

research in terms of age, gender, level of investigation, and years of service. Sixty sampleshave

(Y)

PERFORMANCE

(X1)

LEADERSHIP

(X2)

MOTIVATION

(X3)

DISCIPLINE

H1

H2

H3


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returned the questionnaires. These four characteristics had played important roles in the present

study.

The characteristics of respondents of this study are as follows:

1) Age of respondent, <20 years old consisted of 2 people (3.33%); 20-25 years consisted of 16

people (26.67%), 26-30 years consisted of 6 people or 10%; 31-40 years consisted of 20 persons

(33.33%); and> 40 years consisted of 16 people (26.67%).

2) In terms of gender, there were 39 men (65%) and 21 women (35%).

3) In terms of education level, 23 people graduated from the elementary schools (38.33%), 4

people with Junior High diplomas (6.67), 31 people with senior high school diploma (51.67%),

and 2 people with undergraduate degree (3.33%).

4) In terms of work p of employment, 7 people has worked for <1 year (11.67%), 22 people

have worked for <5 years (36.67%), 8 people have worked for <10 years (13.33%) and 23

people have worked for > 10 years (38.33%)

Description of Respondents' Perception towards Variables X1, X2, X3 and Y

Validity Test (Pearson Correlation)

Table 2. Validity Test Result (Pearson Correlation)

No. Simbol Research Variables Mean Categori

1 X1 Leadership 4.601 High

2 X2 Motivation 4.092 High

3 X3 Discipline 4.015 High

4 Y Staff’s Performance 3.858 Good

The analysis test on leadership variable (X1), motivation (X2), discipline (X3) and

employee performance (Y), showed significant correlation: Pearson correlation for each

indicator is smaller than 0.05. Therefore, it is concluded that all indicators are valid.

Reliability Test (Alpha Cronbach's)

Table 3. Reliability Test Results (Alpha Cronbach's)

Reliability Statistics

Variables Alpha Cronbach’s N of Items Interpretation

Leadership (X1) 0.843 9 Reliable

Motivation (X2) 0.761 8 Reliable

Disc(X3) 0.742 10 Reliable

Staff’s Performance (Y) 0.704 6 Reliable

Table 3 shows the Cronbach's Alpha coefficient value for all variables in this study is

above the 0.70. The alpha value for each variable is 0.843, the motivation 0.761, the discipline

0.742 and the employee's performance 0.704. Viewed from the results of reliability test, it can

be concluded that measurement technique used is reliable.

Hypothesis Testing Results

Hypothesis 1: Leadership has no significant effect on employee’s performance.

Hypothesis 2: Motivation has a significant influence on employee’s performance.

Hypothesis 3: Discipline has no significant effect on employee’s performance.


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DISCUSSION

The Influence of Leadership on Employee Performance

In this study leadership has no significant effect on employees’ performance. The results of this

study are not in accordance with the theory of leadership and performance. The mismatch with

the theory is due to the fact that the questionnaire has focused more on how leaders lead the

company. Table 5.5 shows the three lowest mean with values of x1.9 of 3,850; and x1.2 and

x1.7 respectively of 3,950. The mean is still below 4. These three indicators also have a high

standard deviation. It means that the opinions of respondents are quite varied (inconsistent).

Three questions have something in common that employees view that leaders have the shortage

of direction and approach towards employees.

Strategies currently employed by leaders and employees in the company are as follows:

• The leaders have conducted regular visits to each division in the company.

• The leaders have appointed division heads in every division. The owners and children of the

company owners have still taken all decisions for each division.

The results of this study are different from theories by experts such as Sarros and Butchatsky

(2007) in Sari (2014) and Judge (2007) in Mappamiring (2015).

Effect of Motivation on Employee Performance

In this study, motivation has a significant effect on employee performance. The results of this

study were in accordance with the theory of motivation and performance. Tt would be better to

drop two questions whose mean values are below number 4. These two questions were

concerning tasks and responsibilities; the employments’ relationship with superiors and

subordinates.

The company is running a program to raise employees’ motivation to have more sales. To

achive this goal, "Rewards and Punishment" program for the marketing division was conducted.

The company would provide rewards to employees whose sales are at or beyond a predefined

level. If they can do that, more rewards would be granted. Punishments would be given to those

who could not reach the target or whose sales were below the targets. This program has just

been run, and the company is still waiting for the desired result. For now, sales are rising

slightly, although it is still below the target set. The program was relatively new and employees

needed time to adjust the program.

The results of this study have supported several theories by experts: Uno (2007); Robins and

Judge (2007) in Juniantara (2015); (2010) within Sajangbati (2013); Gomes (2003: 171) in June

between (2015) and Herzberg (1996) in Juniantara (2015)

Effect of Discipline on Employee Performance

In this study, discipline has no significant effect on employee performance. The results of this

study are not in line with the theories of discipline and performance. The mismatch with the

theory is due to the fact that the questionnaire of the present study has focuses more on

individual self-assessed work. The researchers found the two lowest mean values of x3.4 and

x3.9 respectively of 3,900. This mean is still below 4. Both of these indicators also have a high

standard deviation, meaning the opinions of respondents are not consistent.

PT.LMA is currently preparing new job schedules such as delivery schedules. The current

delivery of goods has been irregular, and frequent shipping has not been effective.

To improve employees’ discipline in using and taking time, PT.LMA has condected three new

programs. They were a long-term program. The first program was that employees who never

come late and always come to work would be given a bonus in the form of money. It was called

bonus present. The present bonus money was a gift beyond the basic salary received and given

every 1 week. However, a number of employees often come late and even miss their office


106

hours. Therefore, sanction punishment needed to be implemented. Gor example, if they did not

come for 1 day, they would have their present bonus cut half (50%). Moreover, if they miss 2

working days, they would never get their bonus. The third program was that employees who

came late would never get compensated food money. These three programs were not the same

and run on their own.

The results of this study differ from the theories presented by experts as follows: Hasibuan

(2002) in Evanita (2013).

CONCLUSION

Based on the results of research and discussion, some conclusions are drawn:

1. Leadership does not have a significant effect on employees’ performance in PT.LMA.

Thuis finding is not in line with the theory of leadership and performance. The mismatch is

due to the facts that the questionnaire of the present study has focused more on how leaders

lead the company. In table 5.5 the researcher took the lowest mean value ie x1.9 of 3,850;

and x1.2 and x1.7 of 3,950 respectively. These means are still below 4. This indicates

leaders are demanded to learn about how know they have to pay attentions to their

employees.

2. Motivation has a significant influence on employees’ performance in PT.LMA. Thus

finding is in accordance with the theory of motivation and performance. The average result

of this variable is 4,092. The average value of each statement in this variable is very close

to the average value. A lot of respondents have given their agreement or strong agreement.

3. Discipline has no significant effect on employees’ performance in PT.LMA. This finding is

not in line with the theory of discipline and performance. The mismatch is due to the fact

that the questionnaire has focuses more on individual self-assessed work. The researchers

took two of the lowest mean values of 3 ie, x3.4 and x3.9, respectively, of 3,900 to do

deeper research. These results show that discipline in the company needs to be improved.

The respondents tend to give bias responses.

SUGGESTION

Based on the conclusions, several suggestions are provided for further studies:

1. It is necessary to develop further programs in order to improve motivation so that employees

can improve their performance in PT.LMA.

2. The programs in PT.LMA need to be analyzed further.

3. Although this study shows leadership and discipline are not significantly related to employee

casework, we learn that these two variables are actually very important to consider especially

when running companies. Involving more respondents can provide more optimal results in

futher studies.

4. It is highly recommended that next studies not only use questionnaires but also interviews

with employees.

5. Bringing opinions from outside the company will provide good input for research.

6. Suggestions for subsequent research is to develop and have more variables and involve more

respondents to produce more optimal results.

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Brahmasari, I. A., & Suprayetno, A. (2009). Pengaruh Motivasi Kerja, Kepemimpinan dan

Budaya Organisasi Terhadap Kepuasan Kerja Karyawan serta Dampaknya pada Kinerja

Perusahaan (Studi kasus pada PT. Pei Hai International Wiratama Indonesia).


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Chang, S., & Lee, M. (2007). A Study on Relationship Among Leadership, Organizational

Culture, The Operation of Learning Organization and Employees' Job Satisfaction. The

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RSUD Lubuk Sikaping.

Ghozali, I. (2011). Aplikasi Analisis Multivariate Dengan Program SPSS.

Indermun, V. (2013). Family-Owned Businesses : An Assessment of the Various Leadership

Styles and its Influence on Management Decision-Making. Singaporean Journal of

Business , Economics and Management Studies, 2(3), 63-72. doi:10.12816/0003862

Juniantara, I. W. (2015). Pengaruh Motivasi Dan Kepuasan Kerja Terhadap Kinerja Karyawan

Kopperasi Di Denpasar.

Ma'rufah, L., Tibrani, & Zamora, R. (n.d.). Pengaruh Disiplin Kerja Dan Kepuasan Kerja

Terhadap Kinerja Karyawan Pada PT. Loe Utama Motor Batam.

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Performance of Employees (Studies in Islamic Banking in Makassar). IJARBSS, 5(12).

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Muogbo U .S., M. U. (2013). The Impact of Strategic Management on Organisational Growth

and Development (A Study of Selected Manufacturing Firms in Anambra State). IOSR

Journal of Business and Management, 7(1), 24-32. doi:10.9790/487x-0712432

Muogbo, U. S. (2013). The Impact of Employee Motivation On Organisational Performance (A

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Of Engineering And Science (IJES), 2(7), 70-80.

Nugroho Arianto, D. A. (2013). Pengaruh kedisiplinan, lingkungan kerja dan budaya kerja

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Pegawai PT. Pos Indonesia (Persero) Cabang Bitung, 1(4), 667-678.

Sari, Y. K. (2014). Pengaruh Kepemimpinan, Motivasi Dan Disiplin Kerja Terhadap Kinerja

Karyawan Pada PT. Patra Komala Di Dumai. Jurnal Tepak Manajemen Bisnis, 6(2).

Sukmasari, H. (2011). Pengaruh Kepemimpinan, Motivasi, Intensif, Lingkungan Kerja, Dan

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Does Its Work For Todays Environment, 2(5), 18-22.


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UTILIZATION OF WOOD CUTTING WASTE BACK TO

MATERIAL FURNITURE THROUGH SOCIAL

ENTREPRENEURSHIP APPROACH

1Senain, 2Farida Hanum

Abdurachman Saleh University

INDONESIA


ABSTRACT

One of the excellent products from Situbondo regency is wooden

handicraft product so easy furniture business we meet. Waste wood

pieces are the remnants of wood pieces in the form of boards or

small pieces that can still be seen form. Wooden board consisting

of pieces of wood can be utilized into various objects used in the

interior of a room. In addition to adding functionality from waste

wood pieces, wooden waste board can also add aesthetic value on

an object. This is because the board has different characteristics

compared to ordinary wooden boards. Activities that have been

done include interior design training, interior making from waste

wood pieces, Business Management Training and Employee

Motivation Program on UKM Meubel Heni and UKM Meubel

Kyky. For 6 months the partners' activities are provided with

continuous facilitation and training to produce a table of waste

wood products and grow entrepreneurial spirit in all partners.

Keywords: Waste, meuebel, entrepreneurship

INTRODUCTION

UKM development needs to get great attention both from government and society in order to

grow more competitive with other economic actors. Future government policies need to be

made more conducive to the growth and development of UKM. Development of UKM through

business empowerment approach, need to pay attention to social and cultural aspects in each

region, considering small and medium enterprises in general grow from the community directly.

The government needs to improve its role in empowering SMEs in addition to developing

mutually beneficial business partnerships between large entrepreneurs and small entrepreneurs,

and improving the quality of their human resources (HR).

Small and medium enterprises that grow a lot in Situbondo area is handicraft industry.

Handicraft industry in Situbondo area among others; Batik handicrafts, earthenware handicrafts,

wooden handicrafts, leather industry, bamboo handicrafts, metal crafts, and various traditional

food industries.

One of the superior products of Situbondo district is wooden handicraft product. As a rural area,

the potential of Situbondo area is very supportive of the development of wood craft industry.

The development in timber processing and processing goes very fast, especially since Indonesia

has a tremendous wealth of various types of wood. Knowing the wood material with the purpose

of being used and utilized, is important for entrepreneurs engaged in timber industry, and other

wood users so that in the utilization of wood can be used properly and maximally so that there is


110

no waste of wood use and ultimately can reduce the impact Bad both to nature and to humans

who use it.

In the utilization of wood made by UKM Furniture, wood is widely used as the main material of

furniture making and as part of the foundation of the building. In making furniture for example,

the wood is processed into pieces of wood that is tailored to the form of furniture that will be

made. The remainder of the piece of wood is usually a piece of medium-sized wood and small

which in the end is only considered as waste is not useful and thrown away, then lead into

firewood and smoke will produce CO2 that can pollute the environment.

After the wood utilization process is completed, then other problems arise both in the

community itself and its utilization later in the Interior. The problem that arises in the

community is the lack of public knowledge about how to use waste wood pieces to be wasted

and can be a creative idea that is also useful. While in the Interior itself, the problem arises is

how waste wood pieces can be used properly to be part of the furniture and space forming

elements, so in addition to useful in terms of functions can also add to the beauty of the interior

itself.

The management process undertaken by UKM is still relatively simple. Managers play a double

role as business owners and designers. SMEs are also not yet have a neat bookkeeping so that

the record of good cash flow is not owned by both UKM. Owned capital comes from personal

capital and added from Bank loans. Bookkeeping is still very simple include only the

components of material purchases, employee salaries, and income from sales. UKM feel that

employee motivation needs to be improved, so it is very necessary motivation training for

employees. In addition, training opportunities that can be implemented include training to

cultivate entrepreneurial spirit, machine maintenance, business management, graphic design and

internet use as a marketing medium.

The purpose of this activity is to form UKM Mebeul in order to have a strong entrepreneurial

spirit and motivation by utilizing waste wood pieces into valuable interior products.

LITERATURE REVIEW

Social Entrepreneurship is a derivative term from entrepreneurship. A combination of two

words, social meaning social, and entrepreneurship which means entrepreneurship. Simple

understanding of Social Entrepreneur is someone who understands social problems and uses the

ability of entrepreneurship to make social change, especially covering welfare, education and

health (Santosa, 2007).

Social entrepreneurship is entrepreneurship devoted to the interests of society rather than simply

maximizing personal gain. Social entrepreneurship is commonly called 'community

development' or 'social purpose organization' (Tan, 2005: 1).

According to J. Gregory Dees, Professor of Social Entrepreneurship at Duke University who

says that social entrepreneurs are actors of social sector reform or revolution (education, health,

economic development, environment, art and so on). According to Bill Drayton, CEO and Chair

of Ashoka, social entrepreneurs are individuals who have innovative solutions to tackling social

problems by altering systems, delivering solutions and influencing people to make changes.

According to Muhamad Yunus, Founder of Grameen Bank, a social entrepreneur is an

innovative (economic or non-economic, profit-driven or non-profit) initiative to help the

community.

Forms of Social Entrepreneurship There are several forms of social entrepreneurship by Tan

(2005):

1. Community-based organizations; Such organizations are usually created to address certain

issues within the community (community groups), such as providing educational facilities for

poor children, social home for abandoned children etc.


111

2. Socially responsible enterprises; This social entrepreneur is in the form of a company

conducting a commercial business to support / finance its social enterprise. Some of the profits

earned from profit organizations are intended to support / finance their social enterprises.

3. Socio-economic or dualistic enterprises; This social entrepreneur is in the form of a

commercial company that runs its business on the basis of social principles. For example,

companies that do household waste recycling, organizations that employ disabled people, micro

credit for rural communities.

RESEARCH METHODS

Methods of implementing the activities of Wood Waste Disposal Become Furniture Materials

and Elements Forming Space In The Interior depicted in the following diagram in the form of

solutions offered to overcome the existing problems

Figure 1. Research Methods


Interior Design Training

This training activity was followed by partners from UKM Furniture Heni and UKM Kyebel

Furniture on February 19, 2017. Design drawings that are interesting and needed by consumers

are now used as training materials. In this activity the participants directly make the design

according to the idea and creativity of the participants with the accompaniment of the servant.


112

Participants follow this activity with great enthusiasm so that the target outsider understand the

participants / partners manifested well.

Making Interior Of Wood Waste Cut

Armed with training conducted on 19 February 2017, partners again given a direct

understanding of how to do the practice of making the interior of the design they created on

February 25, 2017. Interior made is a table of waste wood pieces.

Figure 2. The Process Of Making Table Of Wooden Waste

From this activity the output targets achieved in the form of products and the increased

understanding and skills of the partner community as shown in Figure 2

Figure 2. Table Making Process of Wood Cut Waste

Business Management Training

The management process undertaken by both UKM is still relatively simple. Managers play a

double role as business owners and designers. UKM are also not yet have a neat bookkeeping so

that the record of good cash flow is not owned by both UKM. The bookkeeping is very simple

including material purchasing components, employee salaries, and income from sales. Therefore,

it is necessary to reform the administrative system. Human resources owned by UKM Meubel

Heni is 5 employees, with educational qualifications of junior high school graduates, high

school / vocational school. While Meubel Kiki has 4 employees with educational qualifications


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of high school / vocational graduates. On March 5, 2017, business management training was

conducted to improve the management of both partners in order to make the bookkeeping so

that the financial records can be well known by the owner.

Employee Motivation

Program Motivation is the energy and strength of a person who will arouse the level of

enthusiasm and perseverance in doing an activity or effort, whether coming from within

(internal motivation) or from outside the individual (external motivation). This motivation is the

task of a leader to make his subordinates or employees eager to do his duties. Work motivation

comes from the opportunity to move forward and develop, from the type of work, and the

feelings of pride themselves become part of a company or place a person is working. In addition,

work motivation is strongly influenced by a sense of security in work, income or a fair and

competitive salary, favorable working environment conditions, rewards and recognition of work

performance, as well as fair treatment of the leadership. (Anonymous.2017) The main target of

this training is the owner of UKM Furniture Kyky and UKM Furniture Heni. The activity was

carried out on April 2, 2017. The achievement is motivated employees to be more productive in

eliminating the product from wood waste waste so that the quantity target can be fulfilled and

the quality also accompanying by continuing to do the assistance to the employees to be

productive. Quantity and quality will also affect the motivation of employees because there will

be awards from the work in the form of wages and recognition of work performance.

CONCLUSION

Activities that have been done to date include interior design training, interior making from

waste wood pieces, Business Management Training and Employee Motivation Program runs

smoothly. During the 6 months of the activity has been obtained outcome according to the

planned target. Enthusiastic partners follow the activities so that the understanding and skills of

partner communities in processing waste wood pieces into quality products with sustainable

assistance through training that has been done.

REFERENCES

Anonim.2017. Cara dan Upaya Meningkatkan Motivasi Kerja Karyawan

https://pendaftaran-cpns.blogspot.co.id, diakses tanggal 01 Juli 2017

Anggriani, Swastika Dhesti,2011. pemanfaatan-kembali-limbah-potongan. http://ecointerior-

isi.blogspot.co.id. Diakses tanggal 15 April 2016

Fakhri,dkk. 2010. Pemanfaatan Sisa Potongan Kayu Olahan Untuk Produk Papan Lantai

Komposit. JURNAL APTEK Vol. 3 No. 1 Januari 2010

Purwanto,joko.2011. Pembuatan balok dan papan dari limbah industri kayuBoard and wood

block making from waste of wood industries. Jurnal Riset Industri Vol. V, No. 1, 2011,

Hal. 13-20

Ratniarsih,Ika dkk.2013. Pemanfaatan limbah potongan kayu jati

Untuk penyekat ruang non permanen. Simposium Nasional RAPI XII - 2013 FT UMS

Santosa, Setyanto.2007.”Peran Social Entrepreneurship dalam pembangunan”

Tan, Wee-Ling., Williams, John., dan Tan, Teck-Meng. (2005). ‘Defining the ‘Sosial’ in ‘Sosial

Entrepreneurship’: Altruism and Entrepreneurship’.International Entrepreneurship

and Management Journal 1, pp 353-365

Westra, I Made. 1993. Pengetahuan Bahan dan Alat Industri Kerajinan Kayu.Jakarta : Pusat

Perbukuan, Depdikbud.

https://pendaftaran-cpns.blogspot.co.id/2015/01/cara-dan-upaya-meningkatkan-motivasi.html

https://pendaftaran-cpns.blogspot.co.id/

http://ecointerior-isi.blogspot.co.id/

http://ecointerior-isi.blogspot.co.id/


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INFLUENCE ANALYSIS OF MOTIVATION FACTORS WORK TO

WORK SATISFACTION IN LOW EDUCATION WORKERS AT

TANGGULANGIN’S SME IN SIDOARJO EAST JAVA

1Moch. Kalam Mollah

Department of Mining, Faculty of Minerals and Marine,

Institut of Technology AdhiTama Surabaya, East Java

INDONESIA

ABSTRACT

Currently manufacturing SMEs have a very rapid development and

competition is also getting tighter. The decisive factor of this business

excellence is human resources, so the improvement of employee

performance and motivation becomes a very important program in

SMEs. Every SME always wants to achieve a high level of productivity.

One way to achieve productivity is to provide jobs that match the

needs of the employees. This is done to increase work motivation and

simultaneously to improve employee's own job satisfaction. Thus, the

employee does not feel burdened with the tasks they carry and enjoy

the work they do so that the impact on the willingness and ability to

work so that indirectly impact on employee productivity.

In improving the quality of human and quality of work life which is

reflected in the improvement of job satisfaction needs to be done

continuously. Employee engagement and dedication are critical to

maintaining product consistency and product quality. The creation of

employee loyalty will ensure that employees are not discharged from

SMEs, decreased productivity and work strikes. Sidoarjo is a district

that has many SMEs with various types of businesses such as leather

processing for shoes, bags, wallets, jackets etc., SMEs in the field of

woodcraft, toys, accessories, and so on. Where SMEs are able to

dismiss the workforce of the majority of low educated elementary or

junior high school graduates. This research seeks to explore the

factors that motivate these SMEs in working to know the factors of

employee job satisfaction, thus can be used as a proposal for the

owners of SMEs to be able to formulate a strategy of good employee

management in order to obtain high work productivity.

Keywords: motivation, job satisfaction, SME, education, productivity

INTRODUCTION

Workers in SMEs Sidoarjo are generally employees with low level of education ie primary or

junior high school so that SME owners pay them with relatively low salaries (generally far

below the established minimum wage level). This often results in high employee turnover in

SMEs. Employees of SMEs expect salary or wages received not in accordance with

expectations will cause discontent for employees so that the motivation of work is also

decreased and generally employees out of the company to find a job that is better able to meet

his expectations. Every SME always wants to achieve a high level of productivity, the way it

does is to provide jobs that fit with the ability of employees.


115

Thus the employee will not feel burdened with the task and enjoy the job so that indirectly

increased productivity. Employee engagement and dedication are important in maintaining

product consistency and product quality. The creation of employee loyalty will ensure that

SMEs can grow and survive in a tight competition, and productive because they still have

competent human resources. With SMEs growing and growing, the economy in a region

becomes stronger because many workers are absorbed and the level of consumption increases.

LITERATURE REVIEW

Work Motivation

Motivation is a condition that encourages or causes a person to do an act or activity that takes

place consciously (Robbins, 2012). Management should be able to leverage others to achieve

organizational goals effectively and efficiently. Hezberg (1981) divides the motivation into two

parts namely the theory of motivator and hygiene. Motivational factors can also be referred to as

intrinsic fakor because these factors come from within the person concerned. The aspects of the

operational formation of the motivator factors are as follows: (1) achievement factors, (2)

recognition of success, (3) responsibility, (4) challenging work, (5) firms trying to create an

atmosphere for the design of a job to be more attractive , Varied and challenging (6)

development with organized training for skilled employees, opportunities to improve education

and training levels prior to promotion.

The aspects of hygiene factor formation are as follows: (1) unity and administration, (2)

supervision, (3) working environment, (4) employee relations, (5) wages and salaries.

The purpose of providing work motivation to SME employees themselves according to

Tambunan (2013), among others: (a) improve employee morale and job satisfaction; (b)

maintaining employee loyalty and stability; (c) encourage employee enthusiasm and morale; (d)

improve discipline and reduce employee absenteeism; (e) creating good relationships and

working conditions; (f) improving employee welfare; (g) enhance the employee's sense of

responsibility for his duties.

Work Satisfaction

According to Ramos (2010) job satisfaction is a pleasant or unpleasant emotional state in which

employees view work. A person working in an organization will bring the desires, needs,

desires and past experiences that come together to form work expectations. According to Lee

and Shau (2014) job satisfaction shows the degree of fulfillment of employee expectations, the

suitability between the desire that arises with the rewards provided. Feelings of low job

satisfaction can arise as negative actions such as strikes, slacking of work, loss to follow-up,

absenteeism and may even lead to employee turnover.

Davis, Weisj and Lotquist (2011) divide job satisfaction in two groups: internal and

external job satisfaction.

1. Internal work satisfaction. Job satisfaction arising from a person doing a job that

includes: (a) activity is always able to work; (b) social services in the form of an

opportunity to do something for others; (c) the responsibility of the employee's freedom

to use its own decisions; (d) security is the way of employment by ensuring the stability

of the position; (e) social status is the opportunity to be yourself in the organization; (f)

the variation of the opportunity to do things differently over time; (g) authority is the

concept of telling others what to do; (h) independence is the opportunity to work alone in

the work; (i) the utilization of the ability of the opportunity to do something by utilizing

the capabilities possessed; (j) normal values of the ability to do something that is not

contrary to the beliefs held; (k) creativity in the form of an opportunity to try their own

methods of execution of work; (l) the accomplishment of the employee's feelings after

achieving something in his work.


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2. External job satisfaction. Job satisfaction that arises as driven by the company

(management), namely: (a) the rewards of wages and the amount of work done; (b) the

relationship with the superior is the way the managers manage their subordinates; (c)

superior technical capability in the form of employee supervisor ability in making

decision; (d) working conditions relating to workplace conditions; (e) corporate policy

that is the way company policy is applied to the job; (f) recognition is an award received

by employees for doing a good job; (g) coworkers: the way employees are

interconnected; (h) skill in the form of an opportunity to move forward and become

proficient at work.

Definition of Labor

Labor is a working or working resident, who is looking for a job, and who carries out other

activities such as schooling and housekeeping (Simanjuntak, 2012). Manpower ie individuals

who are seeking or already doing work that produces goods or services that already meet the

requirements or age limits that have been determined (Ruthorf, 2011). According to Eudes

(2014) classification of labor is a grouping of manpower that has been compiled based on the

criteria that have been determined. Eudes (2014) classifies labor based on :

1. The population that includes: (a) the workforce is the entire number of people who are

considered able to work and are able to work if there is no work request; (b) Non-

employment shall be those who are deemed incapable and unwilling to work, even if

there is a request for work; (c) Based on the working limit of the productive age

population aged 15 - 64 years who already have a job but temporarily not working, or

who are actively seeking employment; (d) Not the labor force are those aged 10 years

and over whose activities are only in school, taking care of the household and so forth.

2. Based on the quality that includes : (a) The educated worker is a workforce who has a

skill or expertise in a particular field by way of school or formal and non-formal

education; (b) Trained labor Trained workers are those who have expertise in certain

areas through work experience; (c) Uneducated and untrained workers are rough

laborers who rely on energy alone.

RESEARCH METHODS

In this research there are several stages of methodology that will be described as follows:

1. Research Sites. Place of research in this research in SME Industrial Cluster Sidoarjo East

Java by taking the object of research as much as 10 SMEs.

2. The measured variable. This research is measured variable is independent variable and

dependent variable. Independent variable is motivation variable with indicator that is: (a)

fair and decent wage; (b) recognition as an individual; (c) working security; (d)

acceptance by the group. While the dependent variable is employee job satisfaction (Y)

with indicators such as: (a) opportunity to move forward; (b) job security; (c) employees

obtain proper facilities from the company.

3. Model Used. This study uses a simple linear regression statistic model. In general this

regression equation is:

Y = a + b. X + e

Where: Y = the variable is not free; A = constants; B = regression coefficient; X =

independent variable; E = error

1. Research Design In this research first formulate problems related to motivation and job

satisfaction of employees faced by small business owners in SME industrial clusters in


117

Sidoarjo region together, so that after obtained the problem that is considered important

then made a design as follows: (a) Conducting Surveys to small businesses in the SME

industry cluster in the Sidoarjo region and make statistical data related to the growth and

business development of small business actors in the SME industry cluster of Sidoarjo;

(b) Identify the strengths, weaknesses, opportunities and threats posed by small business

actors in SME industry clusters to create SWOT matrices in relation to their own

resources; (c) Design a human resource development model based on work motivation

and job satisfaction suitable for small businesses in SME industry clusters in Sidoarjo

region, so it is expected that with this HR development strategy this small business can

be more developed.

2. Data Collection and Analysis Techniques

Data collection is done through: (a) Primary data of this research is obtained by

interview and distributing questionnaires to respondents, ie owners and employees of

Small and Medium Enterprises; (b) Secondary data is primary data obtained further and

presented either by primary data collectors or other parties. In addition, books and

literature related to research problems.

Figure 1. Research Methods

Start

Literature Study

Survey and Data Collecting

Primary Data Selection

Determination of trigger Motivation factors

and Work Satisfaction factors

Strategic Identification of HR Development

Benchmarking to SME’s Successful in

HR Development

Strategic Design of HR Development in

Competition Basic

Publication

End


118

Primary data and secondary data contains the results obtained from the data analysis based on

the previous step which can then be implemented with real conditions in the field. The method

of analysis used in this study is multiple linear regression analysis method to explain the effect

of independent variables on the dependent variable in SMEs studied. This data analysis is

preceded by the validity and reliability test of the data, t test to determine the effect of

independent variable to the dependent variable partially and calculate the value of the

coefficient of determination (R2) and the correlation coefficient r to know the influence of

independent variable to dependent variable.

3. Conclusions and Suggestions. The final step in this research is to draw conclusion based

on analysis result and suggestion in improvement proposal related to human resource

management to be more productive, innovative, creative and highly competitive with

linked to motivation factor and job satisfaction to SME management side in Sidoarjo in

the future And suggestions for further research.

1. Result and Discussion

1. Validity and Reliability Test

With 50 employee as respondents at SMEs leather craft in Tanggulangin then first

tested the validity of the proposed statement

Table 1. Validity Test

variable

Coefficient Value

of Product Moment

Correlation

Coefficient Corralation

Value of Product

Moment

(N = 50; = 0,05)

Conclusion

X

Y

0,759

0,409

0,235

0,235

Valid

Valid

Table 1 shows that all of the question items in this study were valid. Where the critical

value (r) Product Moment with degree of freedom of 50 and significance level of 0.05 is

0.235.

Table 2. Reliability Tesst

Variabel Alpha Conclusion

X

Y

0,7390

0,7826

Reliable

Reliable

Based on the results of reliability test conducted showed that the value of Alpha

Cronbach () is greater than 0.6 so it can be concluded that the test results that have

been done reliable for further analysis.

2. Heterocedasticity Test

From Figure 2 it shows that there is no clear pattern, where the points spread above and

below the number 0 on the Y axis, so that the resulting linear regression model does not

occur heterokedaktisitas.


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Figure 2. Scatterplot The Influence of Motivation Factors to Works’ Satisfaction

3. Multicolinearity Test

Table 3. Multicolinearity Test

Variable Tollerance VIF

Work Motivation Factor (X) 0,886 1,128

Table 3 shows that the amount of VIF for each independent variable appears to be

below the number 10 or ranged between 1 and 3, as well as the tollerance value above

0.5 or close to 1. So that it can be concluded between the independent variables does not

occur correlation (does not occur Multicollinearity).

4. Autocorrelation Test

From the calculation results, obtained Durbin-Watson value of 1.616 (appendix 8).

Durbin-Watson value of 1.616 lies in the criterion 1.66 D - W 2.34 means the model

of linear regression equation is not autocorrelation. Or be in the criterion between the

numbers -2 1.616 + 2 which also concludes that there is no autocorrelation

5. t Test

Based on the comparison of t value arithmetic with t table where t arithmetic is located

above or outside the interval t table, it can be concluded that the variable of work

motivation (X) have a significant effect on employee work satisfaction at SME Skin

Crafts Tanggulangin Sidoarjo (reject H0 and accept H1) , So the second hypothesis is

proved true.

Table 4 Comparison Value of t calculate with t table

Variable t table t calculate

Work Motivation (X) 1,681 2,467

6. Simple Linear Regression Test

Table 5 Recapitulation of Simple Linear Regression Analysis Result

Variable Regression

Coefficient (b) t Sig r2

Work Motivation Factor

(X)

0,317 1,6

67

0,103 0,061

R = 0,871

R2 = 0,758

F Change = 11,281

Sig. F = 0,000


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Constanta = 8,932

Standard Error = 0,4892

Durbin Watson = 1,616

Based on the calculation in Table 4, it can be made a simple linear regression equation

model of work motivation factors that affect the employee job satisfaction in SMEs skin

crafts, as follows:

Y = 8,932 + 0,317 X

Some things that can be known from the multiple linear regression equation above are

as follows:

a. Constant intercept of 8.932 is the intersection of the regression line with the Y

axis showing the average employee satisfaction factor in SME Skin Crafts

Tanggulangin Sidoarjo at the time of motivation factors of cooperation with

zero.

b. The regression coefficient X of 0.317 indicates that if the variable of work

motivation increased 1 unit then employee job satisfaction factor will increase

by 0,317.

c. The value of multiple correlation coefficient (R) from the simple linear

regression equation above is 0.871. This value (R) shows the relationship

between employee satisfaction variable (Y) and employee's work motivation

variable (X) is very strong (because above 0, 5).

d. The determinant coefficient (R2) of the multiple linear regression equation

above is 0.758 ≈ 0.76. This means that 76% of variation of work motivation

variable (X) affect employee job satisfaction. While the rest, 26% showed the

development of employee job satisfaction influenced by other variables outside

of work motivation variable.

e. Standard Error of The Estimation (SEE) of 0.489. The smaller the SEE will

make the regression model more appropriate in predicting the independent

variables.

Conclusion, Managerial Implication and Suggest

Conclusion

1. Employee motivation assessment has a strong effect on job satisfaction of employees in

working in SMEs Skin Crafts in Tanggulangin Sidoarjo, which is said to have a strong

effect because it has a value of correlation coefficient (R) of 0.691 and based on

interpretation table correlation coefficient that the value of 0.691 is between 0, 60 - 0.799

which means have a strong effect.

2. From the test result using t test, the result of tcount value on employee motivation

variable equal to 2,467 with significance value equal to 0,003 so (0,003 <0,005), where

result stated that hypothesis proposed acceptable and proven correctness.

Managerial Implication

This research can have an impact on decision making for managerial related to strategy to

increase employee motivation and also measures to give job satisfaction for employee so that

expected to increase work productivity of employees.

Suggest

1. Manager or Leadership in SME Handicraft Tanggulangin Sidoarjo should pay attention

to the wage variables fair and decent, job security and acceptance by the group.


121

2. In order to form the expected employee job satisfaction. SME owners need to pay

attention to the provision of proper facilities and opportunities to advance for their

employees.

3. Skills and motivation training should always be done so that employees feel comfortable

and loyal to the company, this is given in the questionnaire there are respondents who

answered that a small percentage of employees feel like moving to another SME.

4. Leaders should be able to foster morale and form a conducive organizational climate by

taking into account psychological factors such as in the form of good communication

between employees or leaders with employees, improvement of promotion mechanisms

and so on.

Keterbatasan Penelitian

1. This research still uses simple linear regression analysis because it only involves.

Variables only that is variable of work motivation (independent variable) and job

satisfaction (dependent variable), in the next research is expected to do multiple

regression analysis with more variable or by using moderation variable

2. This study uses relatively few respondents so that in the next research is expected to be

used more respondents so that more representative. In addition it is expected the

involvement of the management to participate.

3. This research use indicator good for independent variable and dependent variable

relatively little that is 4 and 3, in subsequent research expected use of more indicator.

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TRADITIONAL SNACK STRATEGIC MARKETING ANALYSIS

OF PT. X

1Andre Tjahyono, 2Tina Melinda♠


INDOENSIA

ABSTRACT

This research represent about marketing strategic analysis for

traditional snack which produce by PT. X, hence PT. X can find

marketing strategy that work effectively and efficiently for market share.

The objective of this research is to obtain marketing strategy for

traditional product of PT. X. This research is a qualitative research,

obtain data through interview from credible sources which have

experiences in marketing both from inside company and outsider who

have connection with the company itself. The result from interview will

be processed with SWOT Analysis to get the Strength, Weakness,

Opportunity, and Threat from PT. X. Moreover the result from SWOT

Analysis will be processed further with 7P’s Marketing Mix to obtain

the marketing strategy for Product of PT. X. The result of this research

indicates there some marketing strategy which have to implemented by

company for it’s traditional-trade product, they have to concerned

about Price and Product from Marketing Mix. The main factor for

modern-trade product are Product and Physical Evidence. The

company have to do many improvement regarding this matter, not only

for the main factor but also the other factor, hence it will be a great

help for company to maximize their marketing strategy.

Keywords : Marketing Mix, SWOT Analysis, Marketing Strategy

INTRODUCTION

Snack nowadays is not only for complementary food, but also subtitute to fulfill people

needs.One of the main reason is because most people feel so busy which lead them to eat

something that easy to get or make.The most important factors which become the main reason

for people to choose a snack is food hygiene, hence people will not buy it. Import snack become

really renown because of unique packaging and food hygiene. The point of view from local

market about traditional snack is not as good as what they see in import snack. Traditional snack

manufacturer have to make something unique and fresh product, otherwise they will not be able

to compete with import snack.

There are so many traditional snack, not only ready-to-eat snack but raw snack as well. One of

the most well-known traditional snack is snack pellet or so-called kerupuk in Indonesia. Local

brands that quite famous even in other countries are Qtela, Kusuka, Lumba-lumba, Finna and

Nixxa. Other countries that make snack pellet are China, Korea, Taiwan, and India. PT. X is one

of snack pellet manufacturer that established since 1989 which located in Mojokerto. PT. X

develop their business to compete with other competitor in international market and local

market as well. Food Hygiene, unique and healthy encourage PT. X to develop new traditional

snack pellet which packed with unique packaging, natural ingredients, healthy and hygiene.


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PT. X produce traditional snack such as onion snack pellet, fish snack pellet, shrimp snack

pellet, prawn snack pellet, cassava chips, egg noodle. Creative and fresh idea and innovation

will give new taste for PT. X traditional snack to compete with other local and global

competitor. One of the most important aspect beside a good product is how we introduce and

promote the product. One of the most important marketing theory is called Marketing Mix

which presented by Kotler in Saputra (2013), Marketing mix contain marketing tool that can be

used by some companies to get them closer to their goal. Marketing Mix have four basic factor,

there are Product, Price, Promotion and Place. Those factors have been developed into seven

factors ,according to Boom and Bitner’s in Lin (2011) , as follows Product, Price, Promotion,

Place, People, Process, Physical Evidence.

Creative idea and a new innovation are needed to support for new product, one of the main

factor that really important to improve is marketing strategic. Marketing Mix is a tool to help

company in analyzing marketing strategic which effective and efficient to develop a product.

Marketing Mix will be used to get basic elements in marketing. All of the basic elements will be

combine to get a good way to promote and market the product, for example how PT. X explain

that the new product is a healthy product , hygiene and safe. Another example to promote are

using social media and follow the trend, hence people will know the product easily through this

way. A good way to promote and market the product will make the company have a chance to

tell what the value of their product. PT. X will increase their sales and develop their business

one step ahead, according to Lamb Hair & Mc Daniel in Dharmawan (2012).

Marketing is a organizational function and chain of process to create, communicate and give

value to customer to build relationship between customer through a profitable way for the

organization, according to Kotler & Keller in Lengkey (2014). Marketing Mix is a combination

of four variables that build basic and core from a marketing system, as follows Product, Price,

Promotion and Place. Product is the first element in Marketing Mix, a product have to fulfill the

customer needs. Product have some elements as follows, physic, service, branding, packaging,

colour, standaritation, planning, development, modification, innovation, etc. Price is element

that affect product’s sales, price covers pricing policy, discount, profit margin, term of payment,

credit, etc. Promotion is element that draw customer to buy a product, promotion can be

described as a way to communicate about the product from a company to the customer.

Promotion includes few things, as follows direct sales, advertisement, promotion activity, public

relations, demonstrate, exhibition, etc. Place is the last element from Marketing Mix that show

time, place and utility. Place is a combination of distribution, storage, market place, facility,

storage level, transportation, warehouse, etc. Four basic elements are really important and must

be balanced, hence it will maximize the potential of Marketing Mix.

Promotional Mix is a tool for promotion in marketing strategic to communicate the value from

the product to the customer in persuasively and build relationship between customer. There are

five main components, as follows advertising, sales promotion, public relation & publicity,

personal selling, and direct marketing. Advertising is element that contains promotion idea

through sponsors. Sales Promotion is element that have short-term incentive which draw

customer interest to try or buy a product or service. Public Relation is element that cover

programs to promote and protect company profile and product. Personal Selling is element that

contains direct interaction with customer to give a demo, presentation, interaction and receive

order. Direct Marketing is an element that cover media communication as follows phone,fax,

and e-mail to communicate with customer.

Marketing Mix is not management theory which comes from scientific analysis, but a

conceptual framework which emphasize into decision-making principle, according to Boom &

Bitner’s in Lin (2011). Marketing Mix is really useful when it comes to long-term and short-

term development, according to Palmer in Lin (2011). Four elements of Marketing Mix then

developed into seven elements, as follows Product, Price, Promotion, Place and the additional


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elements are People, Process, and Physical Evidence. The framework of seven elements can be

applied in a wider range rather than four elements. New elements of Marketing Mix have to be

integrated with the old one, hence it will maximize the potential of Marketing Mix itself. The

fifth element is People, that can be described as customer, employee, management, and every

individual. Products reputation can be affected by people who involved in the process to make

those product. The sixth element is Process which a method and process to make services or

products. The last element is Physical Evidence that cover experience of using services or

products, company’s image, etc.

SWOT Analysis is a way to identify factors systematically to produce strategy for company.

Analysis is based on internal and external from the company, there are four factors, as follows

Strength, Weakness, Opportunity, Threat. Strength is a resources, skills, and other advantages

which related with internal. Weakness is a limitations or boundaries which inhibits company’s

performance. The limitations can be described as capital limit, facility, human resources.

Opportunity is a situation which lead to a profits and advantages, for example new technology,

new way to promote and marketing, etc. Threat is a unfavorable situation which come from

external and have a chance to become a threat to company, for example government policy that

prohibit some technology, new product that can subtitute the product, etc.

Research Design

Figure 1. Research Design


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RESEARCH METHODS

This study is a descriptive research with qualitative approach. Qualitative research is a tradition

in social science which based on observing the human being and related to themselves,

according to Kirk & Miller in Moeloeng (2012:2). Qualitative research have characteristic, there

is involving certain measurement. Characteristics can be described are data collected as a

picture, sentence, except numeric. Qualitative research is not using statistic data as well. The

method used to collect data is through direct interview.

Place and Period

This research was conducted in Sidoarjo and Mojokerto. The periode time of this research is

between April 2016 – Juni 2016 with limitation one product.

Research Subject

Research Subject is part which become sample for the research to get information. There are

three kinds of subject, as follows Distributor, Supermarket and Competitor in the same field of

business. Distributor to be interviewed is one of snack distributor that work for a long time,

hence they understand and know very well about sales strategy for the product. Another

research subject is Supermarket that sell traditional snack, so that they have the knowledge

about strategy to sell those products. The last subject is competitor who produce the same type

of product, through this subject it can obtain many kind of information about the strategy for

traditional snack. Research object is PT. X, a traditional snack and crackers manufacturer. PT. X

have a goal that develop a product and build a good marketing strategic. Informant from this

research are Marketing Manager from PT. X, Distributor product from PT. X, and Director from

PT. X. There are some certain criterias which informant must have.

Method of collecting data

Interview is a technic to collect data if researchers want to study and find the problem,

according to Sugiyono (2011). Collecting data technic with interview can be done in some

ways, phone, face to face, another communication tool. Interview will be done with some

questions which lead to some detail information. In this research is using structured interview.

Observation is a complex process which contain biological and physcological process,

according to Hadi in Sugiyono (2013:145). Observation have a specific characteristic compare

to other data collecting technic, it’s because there are no boundaries and limitations

Data Analysis

PT. X is family business which produce indonesia traditional snack, established in 1987 by

Rudy Tjahyono. PT. X have potential to produce good quality traditional snack. PT. X located

in Mojokerto, East Java, Indonesia. The informant who give information to assist this research

from PT. X are Rudy Wijaya as Director of PT. X and Irene Chandra as Local Marketing from

PT. X. Other informant is Aditya Kurniawan as Distributor from PT. Y who distribute PT. X’s

product.

SWOT Analysis is a tool to identify factors in organization to give impact through comparison

internal factor and external factor. Four factors are Strength, Weakness, Opportunity, Threat.

SWOT Analysis need data which obtain through interview. The results from interview will be

analyzed and identified. PT. X’s Strength are good quality product, cheaper price for modern

trade product, experienced staff, diversified product, custom product, return policy, and free

sample. PT. X’s Weakness are some process still using traditional machine, there are no system

for distribution path, price for traditional trade product are overpriced, quality of main

ingredients unstable, international certification for export, no warehouses in some distribution

area. PT. X’s Opportunity are purchasing power of customer increasing, awareness of food

hygiene, government policy about export become less strict, government facilite local product to

enter exhibition with accomodation, new technology. PT. X’s Threat are changing of dietary

and instant food, import snack, price war with other company, etc. Results from SWOT


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Analysis will be used to improve PT. X performance, most powerful thing in PT. X’s Strength

is product quality. PT. X’s Weakness which affect the most is traditional machine and process.

PT. X’s Opportunity which have the biggest chance to get is accomodation for exhibition from

government. PT. X’s Threat which give the most impact is import snack from other countries.

Improved 7P’s Marketing Mix used by PT. X to get a new way for sales marketing to promote

and introduce products of PT. X. Results from Improved 7P’s Marketing Mix are changing each

element in PT. X, as follows Product, Price, Place, Promotion, People, Physical Evidence,

Process. Improvement in Product are the limitation for custom product, ingredients that permit

in other countries, additional smaller packaging, natural food-grade colouring. Improvement in

Price is adding a new traditional-trade product with cheaper price. Improvement in Place is

building new warehouses. Improvement in Promotion are registering membership for e-

commerce and social media, entering exhibition in other countries, registering as member of

food association.Improvement in People are adding more training for employee and operator,

changing the organization culture, changing the organization structure to flat-organization-

structure, adding some reward for employee of the month, adding system for distribution,

adding new system for employee opinion, empowering young generation employee.

Improvement in Process are researching about new technology, using belting and conveyor

system for production line, adding system for return policy. Improvement in Physical Evidence

are adding new storage and warehouses, changing production system to get HACCP

certification and GMP certification, changing traditional-trade product packaging, maintaining

company’s facilities, making new design for brochure and product catalogue. The results from

analyze most important factor in Improved 7P’s Marketing Mix as follows, Price-Product-

Promotion-Physical Evidence-Place-Process-People for traditional trade product and Product-

Promotion-Physical Evidence-Process-Price-People for modern-trade product.

CONCLUSION

This research explain marketing strategic for traditional snack PT.X and how to get the

marketing strategic itself. The first step is analyzing condition and current marketing strategic of

PT. X. SWOT Analysis is the second step to understand more about PT. X’s Strength,

Weakness, Opportunity and Threat. Data which collected through interview will be proccesed

with Improved 7P’s Marketing Mix. The seven factor of Marketing Mix are Prouct, Price,

Promotion, Place, Process, People, and Physical Evidence are not management theory from

scientific analysis, rather a conceptual framework which help the company to adapt and fulfill

customer needs, according to Boom & Bitner’s in Lin (2011).

The result from this research are improvement in seven factor of Marketing Mix which lead

some change in PT. X. PT. X traditional-trade product’s most important factor are Price and

Product, therefore modern-trade product’s most important factor are Product, Promotion and

Physical Evidence. Another results is PT. X need to re-evaluate about positioning and target

market for traditional-trade product because it’s too expensive.

There are some improvements and change for PT. X to develop their business. PT. X have to

change in order to compete with other competitor. Improvements and change in PT. X as

follows in seven aspects of Improved 7P’s Marketing Mix. Improvement in Product are the

limitation for custom product, ingredients that permit in other countries, additional smaller

packaging, natural food-grade colouring. Improvement in Price is adding a new traditional-trade

product with cheaper price. Improvement in Place is building new warehouses. Improvement in

Promotion are registering membership for e-commerce and social media, entering exhibition in

other countries, registering as member of food association.Improvement in People are adding

more training for employee and operator, changing the organization culture, changing the

organization structure to flat-organization-structure, adding some reward for employee of the

month, adding system for distribution, adding new system for employee opinion, empowering


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young generation employee. Improvement in Process are researching about new technology,

using belting and conveyor system for production line, adding system for return policy.

Improvement in Physical Evidence are adding new storage and warehouses, changing

production system to get HACCP certification and GMP certification, changing traditional-trade

product packaging, maintaining company’s facilities, making new design for brochure and

product catalogue. PT. X have to add training program for their employee to increase

company’s performance. A good human resource will lead company to work more effective and

efficient. PT. X have to be aware with investment priority, which one will give the most impact

and vice versa. The expecation from this research is PT. X can increase their sales and become a

whole-new-level company. Last of all, PT. X still have long way to go, hence continuous

improvement is one of important things that need to do in the future.

For future research, this research can be used as data resources with other theory and other

factors, followed by more detail research.

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THE IMPLEMENTATION OF ECONOMIC EMPOWERMENT OF

MICRO, SMALL AND MIDDLE ENTERPRISES FOR FOOD AND

BEVERAGE BUSINESS IN THE REGENCY OF SITUBONDO

1Hadi Wijono

Universitas Abdurrachman Saleh Situbondo

INDONESIA

ABSTRACT

Based on the data of BPS (Statistic Central Bureau of Situbondo Regency),

the number of Micro, Small and Middle Enterprises (hereafter called

UMKM) in 2015 was 57,235 UMKM. It increased to 57.385 UMKM in

the next year of 2016 and 70 % of them, more than 40.170 UMKM, were

managing food and beverage businesses which become the locus of this

study. The figure shows that Situbondo has great potential for economic

empowerment to support the increase of economic growth in this region.

This study aims to give guidance, especially to the writer to always be on

the track when undergoing his activity. In line with the problem

formulation, the purpose of this study is to analyze the implementation of

economic empowerment of UMKM for food and beverage businesses in

Situbondo. The results of study conclude that : Firstly, the economic

empowerment of UMKM which manage food and beverage businesses

has not optimally done yet, especially those which are related to

accompaniment, capital injection and couching [rpgram. Secondly, There

are still a lot of both external and internal barriers in the implementation

of economic empowerment of UMKM which manage food and beverage

businesses, such as : invalid data, sectoral ego among goverment offices,

the reluctance of businessmen to take part in empowerment program and

the low attention of Head Local Government for better development of

UMKM.

Key Words : Implementation, Economic empowerment, UMKM ( Micro,

Small and Middle Enterprise

INTRODUCTION

The entrepreneurship has a strategic and important role from the dimension of economic

turbulence which has recently occurred in Indonesia, especially UMKM that has been proven to

have strong endurance to face economic crisis.

The occuring of 1997 economic crisis gave real example. When most of large enterprises were

collapsing, UMKM could still stood up and sustained their existences and this condition pushed

the government to produce Law Number 20 of 2008 on UMKM and the issuence of

Government Regulation Number 17 of 2013 on the implementation of Law Number 20 of

2008 on UMKM.


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The general description of Regulation Number 20 of 2008 says that UMKM is an activity

which is able to expand job oppurtunity, provide wider economic services to community and

increase people’s income as well as push economic growth which is expected to materialize

national stability.

UMKM, a c c o r d i n g t o L a w N u m b e r 2 0 o f 2 0 0 8 o n U M K M i s :

1. Law No. 20 of 2008 on UMKM, Article 1, Verse 2 : Small Enterprise is an activity of

independent productive economy organized by individual or business entity which

doesn’t belong to the branch of company or subsidiary owned, dominated or become

part both directly and indirectly of Middle and large Enterprise, which fulfil the

criteria of small enterprise as mentioned in this regulation.

2. Law Number 20 of 2008 on UMKM, Article 1, Verse 3 : Middle Enterprise is an

activity of independent productive economy organized by individual or business entity

which doesn’t belong to the branch of company or subsidiary owned, dominated or

become part both directly and indirectly of Small and large Enterprise, which has net-

worth and annual sale results as mentioned in this regulation.

It is of course a good moment If related to the implementation of Regional Autonomy because

Regional Government has respective role to freely manage, develop and push forward the

region in line with the availibility of its resources. In its strategic planning and general policy

Situbondo Local Government has not yet so far given priority to the development and the

progress as well as the growth of UMKM and cooperative. The absence of partnership with

large enterprises which have orientation to employement has become certain problem.

Based on the data of BPS ( Statistic Central Bureau of Situbondo Regency ), the number of

Micro, Small and Middle Enterprises in 2015 was 57,235 UMKM. It increased to 57.385 in the

next year of 2016 and 70 % of them, more than 40.170 UMKM, have managed food and

beverage businesses

The large number of UMKM which especially focus on food and beverage business indicate

that Situbondo has great potential for economic empowerment to support the increasing

economic growth in this regency. According to Data from the office of Cooperative and UMKM

of Situbondo Regency, the contribution of UMKM to Original Regional Income is very

significant, although there is no exact publication so far.

Referring to the condition, This study focuses on the optimalization of UMKM empowerment

which manages food and beverage businesses in Situbondo.

Problem Formulation

Based on the background and definition, the formulation of problem of this study is the

implementation of economic empowerment of UMKM which manage food and beverage

businesses in Situbondo.

Purpose and Benefit of study

This study aims to give guidance, especially to the writer to always go on the track when

undergoing his activity. In line with the above problem formulation, the purpose of this

study is to analyze the implementation of economic empowerment of UMKM which

manage food and beverage businesses in Situbondo Regency

DISCUSSION According to Sumodiningrat, 1999 ( in Hutomo, 2000), Community’s economic empowerment

is an effort of building strong, competitive, large and modern economy in the right mechanism

of market. Because of barrier of structural factor in the process of people’s economic

development, the solution must be formulated through structural changes.


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Kartasasmita, 1996 explained that Community Economic Empowerment is an effort of

resource deployment to develop community economic potential to increase their productivity,

so that the productivity of both human and natural resources can be improved at the same time.

Considering those above ideas on empowerment it can be said that economic empowerment of

community is the strengthening of ownership of production factors, the increasing domination

of distribution and marketing, the increasing salary/wage of people, the wider access of people

to get adequate information, knowledge and skill which can be realized through the

implementation of many aspects, either the aspect of people themselves or the aspect of

government policy.

Another opinion from Sumodiningrat, 2001 said that people empowerment is an effort of

creating independency of the people by optimilizing their own potential to choose the

most appropriate activity for their respective self-progress. Moreover, Kartasasmita,

1996 said that the act of empowering is an effort of improving the prestige and dignity

of poor people to escape from the trap of poverty and backwardness. In other word,

people empowerment is the way how to make people capable and independent.

The effort of community economic empowerment can not be separated from employment / job

opportunity and the increasing income of people. Relating to people empowerment to widen

employment opportunity is very much influenced by the policy of UMKM development,

which has not so far become the priority of local government. Many UMKM, especially those

which manage beverage and food businesses have never gotten capital injection,

accompaniment program and coaching activities from the related government office, namely

Office of Cooperative and UMKM.

Based on the writer’s observation UMKM development has strategic role to spur the economy

of local government because the growth and activity of real sector undergone by UMKM can

provide added-value for the people, namely the availibility of job opportunity and the increasing

income of people..

Capital injection, accompaniment and coaching program are very important to eridacate

UMKM weaknesses, like the low productivity and the low quality of products. With the capital

injection, accompaniment and coaching program provided by Office of Cooperative and

UMKM Situbondo Regency, UMKM which are managing food and beverage businesses are

expected to still survive and develop in the competition with stronger domestic and foreign

economic businessmen. Unfortunately, Office of Cooperative and UMKM are reluctant to do it

seriously.

In writer’s opinion that the coaching program organized by office of cooperative and UMKM

towards UMKM does not consider the specific characteristic of UMKM as the comparative

values which can be utilized to increase UMKM competitiveness with another stronger

economic businessmen.

We need to know that UMKM have unique chracteristic that are only able to manage certain

activity of business. But again the uniqueness of UMKM can be made as competitive value if

UMKM take certain position in business and industry.

The results of study conclude that UMKM which manage food and beverage businesses

constitute one of important part of economic development in Situbondo. This kind of UMKM

help the local government in the process of opening new job opportunity because their

existences can create new working units by giving chance to new workforce to support family’s

income. This kind of UMKM is also having higher flexibility if compared to Large enterprises.

Barriers of UMKM empowerment which manage food and beverage business in

Situbondo.

In my opinion, the important points that become the barriers of UMKM development in


133

Situbondo, are among others :

1. The usual factor that become barrier for government to monitor and identify the

increasing number of UMKM because most of them, on the other side, are reluctant to

report their existence and busnisess to the office of cooperative and UMKM.

2. Sectoral ego among working units of local government office which are responsible to

handle education and training especially Office of trade and industry as well as Office

of cooperative and UMKM.

3. Nepotism in the process of UMKM selection as the participants of Training program.

4. The reluctance of many UMKM to participate in training programs which are,

according to them, considered unuseful and waste the time.

5. The low attention of local government for the development of UMKM which can be

measured from the lack of UMKM development infrastructures.

CONCLUSION

The results of study on the implementation of economic empowerment of micro, small and

middle enterprises which undergo food and beverage business in Situbondo regency conlude

that :

1. Economic empowerment of UMKM which undergo food and beverage business has not

been optimally done, especially those related to capital, accompaniment and coaching

activity.

There are still many obstacles in the implementation of UMKM empowerment which undergo

food and beverage business, both internally and externally, such as : invalid data, sectoral

egoism among government offices, , the reluctance of businessmen to take part in empowerment

program and the low attention of Head Local Government for the development of UMKM.

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dan Pemerataan. PT Pustaka Cidesindo. Jakarta.

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Tambunan, Tulus.2012. Usaha Mikro Kecil dan Menengah di Indonesia. Isu-isu penting.

Penerbit LP3ES. Jakarta.

Hasan, Ali. 2008. Marketing. Media Utama, Yogyakarta.

Martoyo, Susilo. 1999. Manajemen Sumber Daya Manusia. Yogyakarta: BPFE.

Surakhmad, Winarno. 1999. Pengantar Penulisan Ilmiah Dasar, Metode dan Tekhnik.

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THE EFFECT OF LEADERSHIP STYLE AND ORGANISATIONAL

CULTURE TO COMPANY PERFORMANCE THROUGH

STRATEGY OF INNOVATION AS INTERVENING VARIABLE IN

PT. BINTANG SARANA EKSPRESS

1Ardhito Himawan, 2Wirawan Endro Dwi Radianto♠


INDONESIA

Email : [email protected] , [email protected]

ABSTRACT

This research represents about leadership style and organisational culture

mediated by PT. Bintang Sarana Ekspress to improve company performance.

The purposes of this research are acquiring and analyzing leadership style

and organisational culture which should be executed to acquire favorable

company performance. In this research leadership style and organisational

culture used as independent variable, company performance (organization)

used as dependent variable and strategy of innovation as intervening

variable. This research used quantitative research approach by applying

survey research method with primary data collection utilizing questionnaire.

Sample used in this research were obtained by sample taking technique (non

probability sampling) with saturated sampling. Populations used in this

research were middle management and staff. Data processed by using

Structural Equation Modelling (SEM) by applying software program of

Partial Least Square (PLS). The result of research indicates that (1)

leadership style affects positively and significantly to company performance,

(2) organisational culture does not affect to company performance, (3)

leadership style affects positively and significantly to strategy of innovation,

(4) organisational culture does not affect to strategy of innovation, (5)

strategy of innovation affects positively and significantly to company

performance.

Key Words: Leadership Style, Organisational culture, Strategy of

Innovation, Company Performance, Structural Equation Modeling (SEM),

Partial Least Square (PLS)

INTRODUCTION

Sector of transportation plays key role in the sustainability of industries in Indonesia regarding

to distribution of goods as the result of production. This case is evidenced by Data of Indonesian

Truck Entrepreneurs Association (Data Asosiasi Pengusaha Truk Indonesia) (2014) indicating

that nowdays there were 5,1 millions fleet of trucks in Indonesia and also Data from Lembaga

Riset Frost and Sullivan (2015) that showed market growth of Transportation and Logistic

increased as high as 15,2 % from the previous year. Each industry has to be capable to have

strategy of innovation to be able to compete to show the best performance for its consumers.

Innovation can be created as main indicator in an organization to achieve competitive




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excellence. Innovation is the effective way to create different thing not only create added value

for its consumers. Emergence of strategy of innovation is caused by leadership style in the

company. Leadershidp style based on innovation has to have evolution in accordance with its

environment development. Leader with her or his leadership style has to be intrepid to think

differently to create opportunity and actualize purpose of organization. Leadership style is very

decisive for the success of an organization in developing capability and its competency to win

the rivalry sustainably by showing the best performance. Leadership style with organisational

culture have a close relation. Leadership style and organisational culture are a highly dependent

phenomenon, since each aspect from leadership style finally establish organisational culture.

Tendency of organization in order to encounter global rivalry has to be addressed well since it

can cause impact to the company practice. Compatibility between organisational culture and

values owned by member will create facvorable performance. This case issues need of

organization for innovative organisational culture which is able to direct and develop company

to manage and control in order to survive constantly to global rivalry. This research was

conducted in PT. Bintang Sarana Ekspress with reason (1) that trust given by Direktur Utama to

Direktur Komersial to lead PT. Bintang Sarana Ekspress (2) existence of reshuffle of

organization structure in the early 2016 (3) this trucking company does not have differentiator

compared to its competitors. Based on theory and previous research result, it can be seen that

few researchers investigates direct effect between leadership style and organisational culture to

company performance and they have not indicated consistent result in relation among variables.

This research was conducted to find whether there is effect of leadership style and

organisational culture to company performance through strategy of innovation.

LITERATURE REVIEW

Previous Research

One of research which can be created as reference is research conducted by Romadon and

Hanifah (2015). This research aimed to test effect of leadership style, technology and rivalry to

strategy of innovation and company performance (organization). Leadership style, technology

and rivalry used as dependent variable, organization performance as independent variable and

strategy of innovation as intervening variable. Data was processed by using SEM method by

utilizing PLS software. Result of this research indicated that leadership style affected positively

to strategy of innovation, advanced manufacturing technology affected positively to strategy of

innovation, rivalry affected positively to strategy of innovation and strategy of innovation

affected to company performance (organization). Research which can be created as referenece is

research by Marta dan Suharnomo (2011). The research aimed to ascertain effect of leadership

style, organisational culture to organization performance with responsiveness as intervening

variable in CV. Enggal Jaya. Result of this research indicated that leadership style affected

positively to organization performance and organisational culture affected positively to

organization performance.

Company Performance

Measurement of performance can be conducted by evaluating by comparing performance set to

realization. Result of the measurement can be used to ascertain how high the deviation occurs

and how far the improvement has been achieved so that further action on performance

measurement results can be taken (Hartini,2012:84). Tika (2010:121) defined performance as

work or activity of someone or group in an organization orienting to result and the performance

was affected by various factors to achieve the purpose of organization. Assessment of success in

achieveing the purpose can be ascertained from implementation of work result. Simbolon

(2015:92) opined that company performance was success level of management in company

resources management in order to create value for stockholder.


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Strategy of Innovation

Strategy of innovation is as a form of formal plan regulation and it develops long term strategy

of organization to achieve purpose and target of organization (Sidow and Ali, 2014:114).

Strategy of innovation is new paradigm, different focus and new tools. The outcomes are

differentiation in form of new market, new business model, dan increased value which will yield

new growth (Sniukas, 2014:1). Nurjanah (2015:28) opined that innovation has been known as

noteworthy factor in escalating profit, positioning and performance for company in

encountering market dynamics. By performing innovation, organization shows off to

transformation of dynamic market to create or maintain its competitiveness.

Organisational culture

Sutrisno (2010:2) defined that organisational culture as device of values system, trust,

assumptions, or norms which have stood protractedly, agreed and followed by the members of

an organization as guidance of attitude and behavior and solution of problems of its organization.

Tika (2010:14) opined that the main function of organisational culture was as differentiator limit

to organization, as adhesive among employees in organization, to promote stability of social

system, as control mechanism in uniting and establishing behavior of employees, as integrator,

as medium to solve main problems of organization, as reference in company, as reference in

establishing company plan and as communication device.

Leadership Style

Leadership style is pattern of leader behavior in affecting attitude, behavior and others for her or

his followers. Leadership style of a leader can vary depend on quantity and quality of the

followers, situation and culture of social system. A leader can use a number of different pattern

or style in affecting her or his followers (Wirawan, 2013:352). Sengupta and Sunita (1997) in

Mas’ud (2004) in Marta dan Suharnomo (2011) stated that leadership style consisted of four

dimensions of leadership style namely: Authoritarian Style, Nursery Style, Task Oriented Style

and Participative Style. Behavior of leadership style was interaction ways of a leader in

executing activity of her or his employees. Behavior style and action style will emerge from

ways of the leader while executing work (Soekarso, dkk. 2010:44).

CONSEPTUAL STRUCTURE


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Hypothesis

1. There is effect of leadership style which is significant to company performance of PT.

Bintang Sarana Ekspress.

2. There is effect of organisational culture which is significant to company performance of PT.

Bintang Sarana Ekspress

3. There is effect of leadership style which is significant to strategy of innovation of PT.


4. There is effect of organisational culture which is significant to strategy of innovation of PT.


5. There is effect of strategy of innovation which is signigficant to company performance of

PT. Bintang Sarana Ekspress

RESEARCH METHODS

Variable and Definition of Operasional Variabel

Definition of operasional variable is required in order to measure a concept. As for the

definition of operasional variabel from each variable of this research namely:


Writing of this thesis used quantitative research approach. Samples used in this research were

obtained by sampling technique of probability sampling with saturated sampling. Populations

used in this research were middle management and staff which were created as sample, so that it

can be stated that samples in this research were saturated sample. Quantity of samples which

were created as respondents in this research was 20 people. Reason of sampling of middle

management and staff was fixed since a) was executive of summit management decision who

was able to interact with employees and summit management and b) often involved directly

with policies implemented by summit management.


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Data Collection Method

Data source used in this reseach originated from primary data and secondary data. Primary data

obtained by using data collector tool by utilizing questionnaire as data collector tool and

secondary data was monthly financial report of company. Questionnaire in this research used

closed question format with alternative answers which have been provided. This research used

interval measurement scale to evaluate answers from respondents. Respondents were asked to

determine the choice of answers on rank in accordance with their respective thoughts. This

research used likert scale to measure level of bargain to a question with criterias which have

been determined.

Data Analysis Technique

Data analysis method used in this research was SEM method based on variants by utilizing

analysis of Partial Least Square (PLS) since researchers intend to ascertain relation among

variables obtained from direct survey result. PLS analysis could be used in sample quantity

which was not great and could be applied in all data (Abdillah dan Jogiyanto, 2015:150).

Examination in this research used smart PLS version 3.0 software. PLS analysis was executed

by three steps namely, outer model analysis (convergent validity, discriminant validity and

composite realibility), inner model analysis (assessment of goodness of fit and inner model

hypothesis test) and hypothesis test. In this research there was intervening variable namely

strategy of innovation. It could be determined as intervening variable if variable of strategy of

innovation influences relation between variables of independent and dependent. Examination of

direct or indirect effect was executed by testing strength of indirect effect of independent

variable to dependent variable through intervening variable. It could be stated that it had direct

effect if the coefficient value of its direct effect was greater than its indirect effect and it could

be stated that it had indirect effect if the coefficient value of its indirect effect was greater than

its direct effect.

RESULT

Outer Model Evaluation

Convergent Validity

An indicator could be stated that it had its convergent validity if it had outer loading value

>0,5 Hussein (2015:19). Cut-off AVE value which was often used was 0.50, in which AVE

value minimum 0.50 indicated standard of good convergent validity namely condition in

which latent variable could explain the average more than half of variance from its

indicator (Purnami, 2013:58). Since in this research outer loading value >0.5 was obtained

accordingly there was no indicator which was removed and validity of each indicator

variable could measure exactly or it could be stated that the whole indicators were valid.

Discriminant Validity

Discriminant validity could qualify the requirement if cross loading value of indicator in its

variable was the greatest compared to other variables. The result of cross loading above

indicated that each indicator used in this research had the greatest cross loading value in that

variable itself compared to the other variables. It could be stated that indicator used in this

research had good discriminant validity value in its respective variables. The other method

used to assess discriminant validity was comparing square root of average variance

extracted value of each construct with correlation among the other constructs in model. If

the root value of AVE of each construct was greater than correlation value between

construct and the other construct in model, it could be stated that it had good discriminant

validity value. AVE value for each variable had construct value > 0.50 which meant no

problem of validity convergen in the tested model.


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Composite Reliability

Composite reliability tested consistency in measurement of each variable. Composite

reliability could be stated that it was favorable if it had the value above >0.70. Based on the

test result it could be seen that composite reliability value for each latent variable had value

> 0.70 and it could be stated that measure used in this research was reliable.

Outer Model Hypothesis Test

Advisability of a model also could be seen from hypothesis outer loading test, in which if t-

statistik was greater than t-hitung (1.96) accordingly it could be stated that it was significant

which meant the indicator could be used as measure to latent variable. From the test result it

could be seen that t-statistik for each indicator already stood above recommended value

specifically above 1.96 or t-hitung > t-tabel. The result was stated that indicator in variable

of leadership style, organisational culture, strategy of innovation and company performance

could be used as measure to the variables.

Inner Model Evaluation

Godness of Fit Assessment R-Square Test was used to variant measurement in transformation of independent variable

to dependent variable. The higher R2 value accordingly the better prediction model and

proposed model. Based on the test result it could be discovered that R2 value for company

performance variable was in the amount of 0.763. This value indicated that company

performance was affected by leadership style and organisational culture in the amount of

76.3%, the rest was in the amount of 23.7% was affected by other factor which was not

found in model and R2 value for variable of strategy of innovation was in the amount of

0.297. This value indicated that strategy of innovation was affect by leadership style and

organisational culture in the amount of 29.7%, the rest was 70.3% was affected by other

factor which was not found in model.

Goodness of fit assessment in PLS model could be discovered from Q2 value. Q2 value had

the same meaning with coefficient of determination (R2). It could be stated that the higher

Q2, accordingly the fitter model with data. From model in this research total Q2 value

which was obtained was in the amount of 83.4 % which meant the magnitude of data

percentage which could be explained by model was in the amount of 83.4 % while the rest

was 16.6 %, in which this was the effect of other variable which was not found in model.

Inner Model Hypothesis Test Hypothesis of research could be accepted if value of t count > t table in the error rate (α) 5%

specifically 1.96. Result of the research indicated that t-statistik was greater than t-tabel

which meant that there was positive and significant effect from leadership style effect to

company performance (H1), there was positive and significant effect from leadership style

effect to strategy of innovation (H3) and there was positive and significant effect from

effect of strategy of innovation to company performance (H5). However, result of the

different research was showed in (H2) specifically there was no significant effect from

organisational culture effect to company performance and (H4) there was no significant

effect from organisational culture effect to strategy of innovation.

Direct and Indirect Effect From result of the research it could be seen that coefficient value of direct effect path of

leadership style to company performance was in the amount of 0.480 while coefficient of

effect path of leadership style to company performance through strategy of innovation was


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0.695. The calculation result indicated that effect coefficient through strategy of innovation

was greater than its direct effect acoordingly it could be stated that the correlation of

leadership style to company performance was greater than its effect when it was mediated

by variable of strategy of innovation.

DISCUSSION

In this research, examination of direct effect of leadership style and organisational culture to

company performance and also examination of indirect effect of leadership style and

organisational culture to company performance through mediation of strategy of innovation as

intervening variable was conducted.

Acceptance of hypothesis 1 indicated that leadership style of someone could affect company

performance. It meant, when PT. Bintang Sarana Ekspress was led by someone with autocratic

leadership style accordingly the style could affect to company performance. In this respect,

autocratic leadership style obtained effect coefficient value specifically 0.858. If autocratic

leadership style was continually used accordingly company would be able to affect people who

were in the company through decisive communication process, favorable and hard to achieve

organization goal which was expected. Commercial Director of company in each discussion

always emphasized the importance of result and profit while she or he positioned as facilitator

and executor to develop synergy among individuals in group through decision that she or he

made. Leader did not expect feedback from subordinate so that leader did not understand

condition and organization requirement for the development of organization in the future.

Determination of company performance in the future was on the perception of the leader. Denial

of hypothesis 2 indicated that organisational culture which was going on in the company did not

affect to company performance. It meant, organisational culture did not affect since internal

environment of company which was very political in which many problems occurred that were

solved by making decision based on invidual or group having the strongest political power and

also formed groups which was contrary to each other in which loyalty to groups exceeded

loyalty to organization. Analysis result of variable of risk taking obtained the highest effect

coefficient value specifically 0.870. Action of risk taking which was conducted by company

was not able to improve the effectiveness of the company. This case indicated that

organisational culture did not affect to company performance which meant that it could not

improve competitiveness of company.

Acceptance of hypothesis 3 indicated that leadership style through strategy of innovation

affected to company performance, which meant in this research it indicated that leadership style

in company would be able to apply fit strategy with characteristics of the company and its

environment condition and able to determine company strategy both long term and short term.

This case could be seen from strategy of innovation by research and development it obtained

high effect coefficient value specifically 0.914. Leadership style such as the innovation showed

by the program which was triggered through external research having concept background of

“trucking” less gave economic value for company so that leader triggered “retail delivery” in

which leader aimed to reduce costs to be lowe and obtained higher revenue.

Denial of hypothesis 4 indicated that organisational culture which existed through staretgy of

innovation did not affect to company performance, which meant in this research it indicated that

high formalization and centralization in organisational culture of company would inhibit process

participation of strategy of innovation. Organisational culture did not affect since there was

paradigm in company which refused to look for and follow the evolution which occurred out of

the company to best way of business practice, new managerial approach and innovative ideas.

Internal environment of company which was very political and unilateral bureaucracy made

member of the organization difficult to communicate each other when they worked. Employees

gave poor perception to organisational culture to strategy of innovation. However, in this


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perception formed the answers with the average value for each variable specifically > 3.50

which included in “agree” category. It meant that employees worked based on organisational

culture which was apllied by company, if organisational culture had anomaly which was

occurring with employees accordingly employees performance could be affected.

Acceptance of hypothesis 5 indicated that strategy of innovation developed by company could

affect company performance. Transformation in business process innovation was started from

strategic initiatives coming from top management team. This case was conducted by company

to create potential opportunities. Financial data indicated that strategy of innovation which was

executed by PT. Bintang Sarana Ekspress included in high category and increased company

performance along with the innovation.

CONCLUSION

Leadership style affected positively to performance of PT. Bintang Sarana Ekspress which

means that the better leadership style from a leader the more it affects people to achieve the

expected goal. Enhancement of company performance also can be achieved through application

of leadership style which is mediated by strategy pf innovation. Organisational culture gives

negative effect to company performance of PT. Bintang Sarana Ekspress. Company

performance and work result which is not satisfied including organisational culture that tends to

remain within the organization since there is no compatibility between individual characteristics

and organisational culture so that brings up innovative strategy ideas hampered.

REFERENCE

Abdillah, W dan Jogiyanto. 2015. Partial Least Square : Alternatif Structural Equation

Modelling dalam Penelitian Bisnis. Yogyakarta : Andi.

Hartini, S. 2012. Peran Inovasi : Pengembangan Kualitas Produk dan Kinerja Bisnis. Jurnal

Manajemen. (XIV) : 1, pp. 82 – 87.

Hussein, A. S. 2015. Peneitian Bisnis dan Manajemen Menggunakan Partial Least Square

(PLS) dengan Smart PLS 3.0. Modul Ajar. Malang : Universitas Brawijaya.

Marta, O. E dan Suharnomo. 2011. Analisis Pengaruh Gaya Kepemimpinan dan Budaya Organisasional

terhadap Kinerja Organisasi : Responsiveness sebagai Variabel Intervening. Jurnal Ekonomi dan

Bisnis. (II) : 1, pp. 1 – 30.

Nurjanah, S. 2015. Peranan Manajemen Inovasi dalam Meningkatkan Kinerja Organisasi

Pendidikan. Jurnal CBAM, (II) : 1, pp. 27 – 33.

Romadon, F dan Hanifah, I. A. 2015. Pengaruh Kepemimpinan, Teknologi dan Persaingan

terhadap Strategi dan Kinerja Organisasi. Jurnal Akuntansi. (XV) : 2, pp. 1 – 17.

Sidow, M. A. and Ali, A. Y. S. 2014. Corporate Innovation and Organizational Performance:

The Case Of Somalia Telecomunication Industry. International Journal Of Business

and Law. (IV) : 1, pp. 112 – 118.

Simbolon, F. 2015. Perbandingan Sistem Pengukuran Kinerja Perusahaan. Journal Binus. (VI)

: 1, pp. 91 – 100.

Sniukas and Marc. 2014. Presentation of Doujak Corporate Development, Strategic

Innovation. Available at : www.sniukas.com. (Accessed: 15 Juni 2016).

Soekarso, Sosro, A., Putong, I dan Hidayat, C. 2010. Teori Kepemimpinan. Jakarta : Mitra

Wacana Media.

Sutrisno, E. 2010. Budaya Organisasi. Jakarta : Kencana.

Tika, M. P. 2010. Budaya Organisasi dan Peningkatan Kinerja Perusahaan. Jakarta : Bumi

Aksara.

Wirawan. 2013. Kepemimpinan Teori, Psikologi, Perilaku Organisasi, Aplikasi dan Penelitian.

Jakarta : Rajawali Press.

http://www.sniukas.com/


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LEGAL PROTECTION FOR TRADEMARKS FOR PRODUCTS OF

UMKM PRODUCTS IN SITUBONDO DISTRICT

1Muhammad Yusuf Ibrahim

Lecturer Faculty of Law

Universitas Abdurachman Saleh Situbondo

INDONESIA


ABSTRACT

Brand is a sign of a product and service. Brand can also provide

information for consumers about a product of goods and services produced

by the manufacturer, even the brand can show the quality of a product

goods and services. To acquire a legal protection of Marks, the owner of

the Mark shall register its Marks as set forth in article 3 of Act Number 15

of 2001 Concerning Trademarks, namely the right to Trademark is an

exclusive right granted by the state to the owner of the Mark registered in

the General Register of Marks for A period of time by using the Mark's

own or permitting others to use it.

UMKM Currently in Situbondo District has grown very rapidly. As a

business wheel in the region, many UMKM start a business by focusing on

the development of goods and services without regard to the legal

protection of the brand that has been made, so many brands made by

business actors in areas that are still not registered at the Directorate

General of Intellectual Property Rights. The lack of information and

knowledge of IPR in the regions increasingly makes the business actors in

the regions do not pay attention to the Intellectual Property owned. So if in

the future there are products of the same goods and services as those made

by other business actors with registered trademarks then business actors

will be harmed. To avoid this then research on intellectual property rights

is created.

Keywords: IPR, Brand, UMKM.

INTRODUCTION

The general principle of IPR is to protect intellectual enterprises that are creative based on

registration. In general, registration is one of the intellectual property conditions generated by a

person. Some branches of IPR requiring someone to register are Brand, Patent, Industrial

Design, Layout Design of Integrated Circuit, and Plant Variety Protection. Whereas the other

two IPR branches, namely Copyright and Trade Secret are not required to be registered for legal

protection.

Brand has the ability as a sign that can distinguish the results of one UMKM with other UMKM

in the market, for goods or services of the same or unlike. The function of the brand is not only

to distinguish a product from another product but also to act as an invaluable asset of a

company, as it is an intellectual property, especially for a well-known brand. Because through a

product brand of goods or services of a kind can be distinguished origin, quality and security


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that a product is genuine. Through the brand, a UMKM has built a character to its products,

which is expected to create an increasing reputation for the use of the brand.

From that background, the brand can be used as an asset for the company, therefore the

employer must know about how a brand gets legal protection as well as how its registration

process, its transfer, and the removal of legal protection of the brand in the trade of goods and

services.3

LITERATURE REVIEW

Brand Definition

The definition of a brand is formulated in Article 1 paragraph (1) of the Trademark Number 15

of 2001 which reads, Brand is a sign in the form of pictures, names, words of letters, numbers,

arrangement of colors, or combination of these elements Which has a differentiating power and

is used in trading activities of goods and services. To distinguish between goods or services

with each other. According to Article 3 of Law No. 15 of 2001 on Marks, a right to a mark is a

special right granted by a state to a trademark owner registered on the general register of a mark

for a certain period of time by itself or giving consent to a person or persons jointly, The same

legal entity to use it.

Brand for producers of goods and services is very important, because it serves to distinguish

between goods or services with each other and serves as a sign to distinguish the origin,

reputation image and bonafiditas among companies with one another similar. Brand function

also as a sign to connect a particular product with the source at once used because it can

differentiate from other goods producers. For consumers with the increasing variety of goods

and services that are marketed through the brand can be known the quality and origin of these

goods and services.

Brand Registration

The procedure for the acquisition of a right to a trademark is governed by the provisions of

Article 7 of Law Number 15 Year 2001 regarding Trademark, granted on the basis of the

application, the registration must contain:

a. Date, Month and Year.

b. The full name, nationality, and address of the applicant.

c. Full name and power of attorney's address, if the application is submitted

by power.

d. Colors if the brand applied for registration by using color elements.

e. The name of the country and the date of the first request for the mark in

the case of the application is filed with priority right.

The principle of brand registration in Indonesia uses the first to file system. First to file is the

principle of registration based on who first registered a creation either personal or legal entity

either in the form of industrial company.

Brand Redirection

Article 40 of the Trademark Law describes ways to transfer the rights to a registered mark, is:

1. Inheritance,

2. Testament,

3. Grants,

4. Agreement,

5. Other causes justified by legislation.

The transfer of rights to the mark shall be requested by the Director General of IPR to be

recorded in the general register of the mark accompanied by documents proving it. The transfer

of rights has the legal power of a third party only if it has been recorded in the general daftra of


144

the mark. A transfer of the mark may be accompanied by a transfer of name or otherwise

associated with the mark.

Brands as immaterial material can also be switched and diverted, therefore as the material

immaterial brand must be respected as the personal rights of the wearer. Property rights as a

perfect material right when we compare with other material rights provide perfect enjoyment to

the owner. The right to a trademark may be granted to another party by the owner of a registered

mark to another party through an agreement in which it contains the right to use the mark,

whether for all or part of the type of goods or services registered within a specified time and

condition.

Brand licensing through an agreement is basically a matter of granting the right to enjoy the

economic benefits of a brand within a period of time and on certain conditions as well. The

license agreement shall be registered with the Directorate General of Intellectual Property

Rights or recorded in the general register of the mark and published in the official news of the

mark.

The transfer of inheritance law, grant and testament, nothing has been applied uniformly, still

different for each class of the population. Some are subject to customary law, some are subject

to Islamic law, and some are subject to civil law. The transfer of a trademark registered with the

agreement shall be set forth in the form of the deed of agreement and accompanied by

supporting documents such as a brand certificate that supports the ownership of the mark.

Brand Removal

Trademarks registered with the Directorate General of IPR may be removed in the general

register of the mark, as contained in Law Number 15 Year 2001 on Marks, is:

a. Article 61, Removal of a trademark registration from the general register

of a mark may be made on the initiative of the Directorate General of IPR or based on

the request of the owner of the mark concerned.

b. Article 63, the abolition of a trademark registration may also be filed by a

third party in the form of a lawsuit to the commercial court.

c. Article 67, the abolition of collective trademark registration may also be

filed by a third party in the form of a lawsuit to the commercial court.

The Directorate General of Intellectual Property Rights may initiate the removal of a trademark

registration if:

a. Marks shall not be used for 3 (three) consecutive years in the trade of

goods or services since the date of registration or last resort, unless there is a reason that

may be accepted by the Directorate General of Intellectual Property Rights. The last use

is the use of such marks on the production of traded goods or services. When the last

use is calculated from the last date of use even after that the goods are still circulating in

the community.

b. Marks are used for the type of goods or services that are inconsistent

with the type of goods or services applied for registration, including the use of

unsuitable trademarks in the form of wording or letters or non-compliance in the use of

different marks.

Article 63 and Article 64 of the Trademark Law Number 15 Year 2001 Concerning Trademarks

stipulates that the abolition of the registration of a mark for the above reasons may also be filed

by a third party in the form of a lawsuit to the Commercial Court and to a Commercial Court

Judgment may only be filed an appeal to the Supreme Court. Regarding the abolition of the

registration of collective trademarks, Article 66 of the Trademark of Branding Number 15 of

2001 on Marks, states that the Directorate General of Intellectual Property Rights may remove

the registration of a collective mark on the basis of:


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a. Own solicitation of collective brand owners with the written consent of

all users of the collective brand.

b. Sufficient evidence that the collective mark is not used for 3 (three)

consecutive years from the date of its registration or the last use unless there is reason to

be accepted by the Directorate General of Intellectual Property Rights.

c. Sufficient evidence that a collective mark is used for a type of goods or

service that is inconsistent with the type of goods or services applied for registration.

d. Sufficient evidence that such collective marks are not used in accordance

with collective brand usage rules. Removal of brand registration is recorded in the

general list of brands and announced in official brand news. An objection to the

removal of a trademark registration may be filed with the Commercial Court.


Protection of famous Brands

Famous Brand is a brand that becomes a symbol of pride that can be relied upon by consumers

even though consumers do not know or do not realize who the owner of the brand. The brand

issue becomes very important, with respect to the issue of legal protection and legal certainty for

the owner or the holder of the mark and the legal protection of the public as the consumer of a

good or service that uses a brand to avoid being fooled by other brands. Can not be denied again

that the problem of the use of famous brands by unauthorized parties, is still a lot happening in

Indonesia and the fact is really realized by government.

If viewed from the side of the law it can not be tolerated anymore because the State of Indonesia

has ratified the International Covenant on TRIP'S and WTO that has been in accordance with

international agreements. It is undeniable that in the world of commerce today the brand is a

manifestation of the intellectual work of human beings who have a decisive role because of the

use or use of the brand in the company, but also contains a wide legal aspect both for the owner

or holder of the rights to the brand as well as for Society as consumers who use or exploit goods

or services of a particular brand.

The famous Brand Criteria can be formulated as follows:

a. So long brand upgrading.

b. Brand appearance that has its own characteristics that are attached to the

memories of the community.

c. Brand registration in many countries.

d. Good brand reputation because the products or services produced have

excellent quality and aesthetic value and high commercial value.

e. Marketing and product distribution with a wide reach in almost all the

world.

Protection of Brand rights

Protection of Trademarks or Rights on Marks is an exclusive right granted by the State to

registered mark owners in the General Marks Register. For a period of time the holder of the

rights to the mark may use the mark himself or permit a person, some persons together or a legal

entity to use it. Protection of Registered Marks is the legal certainty of Registered Marks,

whether for extended use or as evidence in case of dispute over the implementation of

Registered Marks.

Article 76 paragraph (1) of Law Number 15 Year 2001 regarding Trademark, stating that the

registered trademark owner may file a lawsuit against another party who unlawfully uses a

marking brand in common or in whole for similar goods or services in the form of a claim of

indemnity Or termination of all deeds associated with the use of such marks. Article 76

paragraph (2) of Law Number 15 Year 2001 regarding Trademark, a registered trademark


146

infringement lawsuit is filed with the Commercial Court. This means that the jurisdiction of

adjudicating disputes or litigation lawsuits lies with the Commercial Court as a special judicial

body.

Legal protection internationally

Legal protection of registered trademarks is absolutely granted by the government to the holder

and user of the right to the mark to ensure:

a. Certainty strives for producers.

b. Attract investors to foreign trademarks, while the legal protection

afforded to local trademarks is expected to eventually expand widely in the international

world.

The national legislation on brand, society is also bound by international brand rules such as the

Paris Union Convention held on March 20, 1883, which is specifically designed to provide

protection to industrial property. Indonesia still has the freedom to govern its own Brand Law,

as long as Not contrary to the provisions already standardized in the paris Convention.

Repressive Protection

Understanding of repressive law protection is protection done to solve or overcome an event or

event that has happened, that is in the form of violation of right to brand. In repressive

protection this has a greater role to the judiciary and other law enforcement agencies such as the

Police, Civil Service Officials and the prosecutor's office to take action against brand violations.

Repressive legal protection is exercised in the event of a violation of the right to the mark

through civil suits and / or criminal charges. That the owner of a registered mark obtains legal

protection for violation of the right to the mark either in the form of a claim of compensation or

the cessation of all acts relating to the use of such marks or based on criminal lawsuits through

law enforcement officers.

CONCLUSION

Legal protection of the Trademark holder of the trade in goods and services in Indonesia is very

necessary because to prevent and avoid dishonesty of Trademarks, such as counterfeiting and

piracy of Trademarks. Not only that, but also to obtain legal certainty from the government to

the holder of a well-meaning Brand. For that the state regulates the legal provisions to create

legal protection.

Registration procedures, transfer and removal of legal protection on Trademarks in the trade in

goods and services have been regulated by the government in Law No. 15 of 2001 on Marks.

Registration is one of the requirements to obtain legal protection, but registration in Indonesia

uses a fist to file system for registration. Likewise with the transfer and removal of Brand

protection can be done if it has complied with the provisions of the legislation.

REFERENCES

Abdulkadir Muhammad, 1994. Hukum HartaKekayaan, Citra AditiaBakti: Bandung.

AndrianSutedi, 2009. HakAtasKekayaanIntelektual, SinarGrafika: Jakarta.

Djulaeka. 2014. KonsepPerlindunganHakKekayaanIntelektual: PerspektifKajianFilosofis HAKI

Kolektif-Komunal. Setara Press: Malang.

HariyaniIswi, prosedurmengurus HAKI yang benar, PustakaYustisia, Yokyakarta, 2010

HeryFirmansyah, Perlindungan Hukum TerhadapMerek, PustakaYustisia, Yogyakarta 2011

Much. Nurachmad. 2012. SegalaTentang HAKI Indonesia. BukuBiru: Jogjakarta.

Muhammad Djumhanidan R. Djubaidillah, HakMilikintelektual, Citra AditiaBakti, Bandung,

1993


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Rachmadi Usman. 2003. Hukum HakAtasKekayaanIntelektual:

PerlindungandanDimensiHukumnya di Indonesia. PT. Alumni: Bandung.ErmansyahDjaja.

2009. Hukum HakkekayaanIntelektual. SinarGrafika: Jakarta.

Saidin. 2010. Aspek Hukum HakKekayaanIntelektual: Intellectual Property Rights. PT.

rajaGrafindoPersada: Jakarta.

Sudaryat, 2010. HakKekayaanIntelektual: MemahamiPrinsipDasar, Cakupan, Dan Undang-

Undang Yang Berlaku, Oase Media: Bandung.


148

THE EFFECT OF MARKETING MIX STRATEGY ON TRUST

AND PRODUCT PURCHASE DECISIONS BY JEMBER

SPECIFICATIONS

1Nanik Hariyana, 2Lita Permata Sari

Lecturer at the Faculty of Economics

University Of Abdurachman Saleh Situbondo

INDONESIA


ABSTRACT

The purpose of this study was Menegetahui and analyze Influence

marketing mix strategies to trust an d product purchasing decisions

souvenirs jember, Techniques of data collection techniques used

compilers in making this report is a qualitative method of observation,

namely by jumping directly in the field Place of

study. consumers generally purchase the product's decided typical

souvenirs jember themarketing mix strategy.

Keywords: marketing mix, and trust purchasing decisions.

INTRODUCTION

Indonesia is one country that has a wealth of natural resources, but not least the potential of

natural resources that have not been managed and touched by technology. One of them is water

potential, therefore development policy in the fisheries sector essentially leads to the welfare of

living standards, capacity, independence and access of fishermen community in the

development process through improvement of quality and quantity of production, distribution

and diversity of fishery products, Fair and prosperous national development, to achieve these

objectives needs to be developed and managed the available resources. A country that consists

of various ethnic groups and has a diversity in various fields, one of which is a typical food

area. At first we can only find local foods in the place of origin only. However, along with the

development of the era, we can now find typical food areas in various places, not only the area

of origin alone. One is the typical souvenirs typical muddy muddy ie the usualsnacks consumed

in an area. Typical snacks muddy character in an area generally reflects the character of its

people. Area residents in the area with most of the population still work as farmers, many

supported jember economy of the agricultural sector that gave birth to many souvenirs

jember and mixtures enrich typical regional products.

One of the typical souvenir of jember Is Suwar-suwir, prol tape, the consumer finds sellers

suwar-suwir and prol tape in various along the way by typical souvenir shop jember. The city of

jember is also called the city of tape, because to the creative community processing cassava-

based tape into several types of snacks are much preferred and high selling value, some

processed from the famous tape is suwar-suwir, dodol tape, prol tape, and The latest is pia tape,

which is increasingly popular especially for souvenirs and other typical souvenir from jember.

In running the food business, not just the capital taste that is needed by business

actors. Although many say the food business is never empty of consumers, in fact


149

strategy marketing Food business is still needed to run the business can generate a targeted

turnover. Especially in the middle of the tight competition of the market as it is today, the

marketing of food business Become the decisive factor for future business development.

Food business is one business that has considerable potential, has many business actors who

reap profits from this business. But not a few business people food bankrupt alias bankrupt,

kar ena marketing strategy Which is used less precisely.

Confidence (trust) has received much attention of research and has been identified as a key

driver of the success of e-commerce (Jarvenpaa et al. 2000). Consumer confidence according to

Mowen (2002: 312) is all knowledge owned by consumers and all conclusions made by

consumers about the objects, attributes, and benefits Consumers who have confidence in a

product or brand will generate interest in purchasing the product or brand. Trust is more difficult

to build and more important in the online world, as compared to offline stores, barriers that most

affect the success of the Internet as a commercial medium in the market is the lack of consumer

confidence in the internet (Jarvenpaa et al. 2000). A person forms three types of beliefs namely

object-attribute trust, attribute-benefit trust and object-benefit trust (Mowen, 2002: 312).

Online purchase decision / ofline can be influenced by several factors, including ease of

transaction, price, reputation, responsiveness, security and trust. According to Kotler &

Armstrong (2001: 226) purchasing decisions are the stage in the buyer's decision-making

process in which the consumer actually buys. K eputusan purchase has dimensions of product

selection, brand selection, the selection of distributors, the purchase amount, the timing of the

visit and Payment method (Kotler & Keller, 2012: 161).

A. Formulation of the problem based Description on background back then could Put

forward problem as following:

1. There is The influence of marketing mix strategy against an d trust product purchasing

decisions souvenirs Jember?

2. How marketing mix strategy against an d trust product purchasing decisions

souvenirs Jember?

C. Research Objectives

1. Knowing and analyze Influence marketing mix strategy against an d trust product

purchasing decisions souvenirs Jember.

2. Knowing and analyze the marketing mix strategy against an d trust product purchasing

decisions souvenirs Jember.

RESEARCH METHODS Techniques of data collection techniques used in the creation of this report authors

were interviews, observation and documentation, namely by jumping directly in the field where

the research.

The method used mainly in this study using qualitative research that its respondents are

consumers who are making purchasing decisions souvenirs products Jember.


The influence of marketing mix strategies to trust and product purchasing decisions

souvenirs Jember. In running the food business, not just the capital taste that is needed by business

actors. Although many say the food business is never empty of consumers, in fact

strategy marketing Food business is still needed to run the business can generate a targeted

turnover. Especially in the middle of the tight competition of the market as it is today, the

marketing of food business Become the decisive factor for future business development.

https://translate.google.com/translate?hl=id&prev=_t&sl=id&tl=en&u=http://bisnisukm.com/pentingnya-marketing-mix-dalam-berbisnis.html


150

Food business is one business that has considerable potential, has many business actors who

reap profits from this business. But not a few business people food bankrupt alias bankrupt,

kar ena marketing strategy Which is used less precisely.

Marketing mix strategies to trust and product purchasing decisions souvenirs Jember.

The marketing blend strategy used in marketing of Jember's typical souvenir products

business is as follows:

1. Make Brand The food business Interesting

Before you start a food business, you should have menyiapk's brand or name for

the business. Choose a name that is interesting, unique, and easy to remember by

consumers. Because the business name becomes an image that will be embedded in the

consumer, So they are easy to remember your efforts.

Besides, things to consider when looking for a business name, adjust the name of the

business on the run. Name of business can you place in front of business location by using

neon box or X-Baner in front of business location. In order for consumers who happen to

pass by, interested to stop by to buy food products presented.

2. Publish On the Community

Start marketing by introducing your business To the surrounding community. With the

introduction of products, people know what the advantages of your food business products,

the price of food offered, as well as services offered to the food business to consumers.

To introduce your food business to the community, it can be done by creating an event and

inviting the public to visit your food business Have. Besides marketing can also be done

by taking local employees who are around the location of your business, so indirectly your

employees will promote their workplace to their relatives and colleagues.

3. Give a discount for Event - event certain

Provide rebate on Event - event Certain like at the moment grand opening of the

business, or the anniversary of your efforts, it could be the right choice for promoting your

business. In addition you can also provide special pricing packages on certain days, such as

providing the price of family packages on holidays, or holidays like Lebaran, or the new

year.

With the discount price, it is enough to be the main attraction for consumers to visit your

place of business. Besides that, you can also use brochures, pamphlets, or banners to

promote discounts that your restaurant or food stall has to offer.

4. Building a Business Supporting Network You

To build a business network is not easy, but the network is a very effective

marketing. Start by creating a business network with your colleagues and close

relatives Which can help you to grow your business.

How to build a network can be done by giving Test product To your friends or

relatives. For example for those who have a business bakso stalls, you can invite colleagues

and relatives to visit tasting meatball your homemade. If your colleagues and relatives are

interested in meatball products, they will be happy if invited to cooperate with the meatball

business.

5. Creating Innovation On the Menu Offered

To avoid saturation of consumers, create innovations on the menu - menu offered your

restaurant. At least 6 months create a new menu in your food business. The many variations

of the menu offered, will be the main attraction for each consumer.

6. Improve service quality

In providing services to consumers, should consider the time of serving food, the

quality of food taste and cleanliness and security of the place of business. Consumers will




151

feel uncomfortable if waiting for serving the food is too long, for that try to on time In

providing services.

Furthermore, you also need to maintain the quality of the taste of food produced, so

consumers are not disappointed if the food they ordered was not good. And the third is to

keep the cleanliness and security at the place of eating, so that consumers who eat in your

restaurant feel comfortable and happy to visit again next time.

Basically marketing the food business is very important, to do business promotion in total so

that your business is not less competitive with other players. Whether from the grand

opening until your food business is up and running, continue promoting and marketing

continuously. If you need to set aside 5 - 10% business turnover for the cost of promotion

and marketing your business. Send regards for success.

CONCLUSION Food is a staple for everyone. Opening the food business will indeed be very profitable, because

everyone would need to eat. There are many types of food businesses to choose from. One of

them is the prospect of a typical regional food business.

Each region certainly has a special food, which can not be found in other areas. Let's say,

Semarang has typical food of spring rolls. This food is always the fruit of tourists visiting the

city. Consumers of course want to try foods typical of other regions or miss home native

cuisine. Therefore, local food business is very prospective.

REFERENCES Alma, Buchari. 2000. Marketing Management and Marketing Services, Revised

Edition. Molds IV. Bandung: Alfabeta.

Arikunto, Suharsimi. 2006. Research Procedure A Practice Approach, revised

edition VI. Jakarta: PT Rineka Cipta.

Augusty, Ferdinand. (2005), Structural Equation Modeling in Management Research, 3rd ed.,

BP. UNDIP.

Belch and Belch. 2004 Celebrity Opinion Leader. ( Http://www.scribd.com/doc/ ). [November

19, 2004]

Braharja, Mavi. 2008. Various Media Graphic Communications as of 1 February

2008. http://www.mavibraharja.com [19 November 2008]

Buda R. And Y. Zhang. 2000. Consumer Product Evaluation: The Interactive Effect of

Messeage Framing, Presentation Order, and Source Credibility, Journal of Product and

Brand Management, Vol. 9, No. 4: 229-242.

Byrne, Barbara M. (1998) StructuralEquationModelingwithLISREL, PRELIS and SIMPLIS:

Basic Concepts, Applications and Programming. LEA, New Jersey.

Chairur, Heru. 2003. Effects of Advertising Messages on Television Soap Customer Satisfaction

(Case study Patrang District of Jember). (Unpublished thesis).

Churchill, Gilbert A. and Carol Suprenant (1982), "An Investigation into theDeterminants of

Customer Satisfaction," Journal of Marketing Research, 19 (November), 491-504.

Danny Satria (2009): Analysis of the Influence of Structure and Ads Formation of Djarum

Cigarettes on Purchase Decision, Satisfaction and Customer Loyalty (Case Study on

Motor Club Members in Jember)

Dharmmesta. 1990. Modern Marketing Management, Liberty Yogyakarta.

Diana. 2000. Influence of Advertising Shampoo Sunsilk, Pantene and Clear Positive Attitude

Toward Consumer Faculty of Economics, University of Jember. (Unpublished thesis)

Dimyati, 2009. Sem Analysis in Test of Influence of Variable Variable on

Loyalty. Jember; Media Discourse Partners

Http://www.jemberbagus.com/2016/05/ini-dia-7-oleh-by-khas-jember-the-most-many-

dicari.html

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https://translate.google.com/translate?hl=id&prev=_t&sl=id&tl=en&u=http://www.mavibraharja.com

https://translate.google.com/translate?hl=id&prev=_t&sl=id&tl=en&u=http://www.jemberbagus.com/2016/05/ini-dia-7-oleh-oleh-khas-jember-yang-paling-banyak-dicari.html

https://translate.google.com/translate?hl=id&prev=_t&sl=id&tl=en&u=http://www.jemberbagus.com/2016/05/ini-dia-7-oleh-oleh-khas-jember-yang-paling-banyak-dicari.html


152

THE INFLUENCE OF SIZE OF CREDIT, GENDER, AGE AND

EDUCATION TO OPPORTUNITY OF SMEs PERFORMANCE

IMPROVEMENT IN MALANG

1R.A. Sista Paramita


INDONESIA

E-mail: [email protected]

ABSTRACT

This study aims to analyze whether there is a relationship between the

size of the credit, gender, age and education of SME owners in Malang to

the opportunity of improving the performance of SMEs. This study uses

primary data which obtained by interviewing 100 respondents and after

sorting the questionnaire, only 81 respondents gave complete answers.

The sampling technique using simple random sampling. This research

was conducted in Malang during October 2016. This research was

employed Logistic Regression as analysis technique. The result of the

research shows that giving credit and gender has an effect on predicting

performance improvement, while age and education have no effect

predict improvement of SME performance. The implications of this study

indicate that SMEs need capital from bank to run and develop their

business. Gender has affect in predicting the improvement of SMEs

performance. It seems that man and women owned SMEs has an ability

and perform at similar levels to achive such high business-related

experience. While age and education did not reveal any prediction about

performance.

Keywords: Size of Credit, Gender, Age, Education, SME’s Performance

INTRODUCTION

Small and Medium Enterprises (SMEs) is one business sector that became the backbone of the

national economy. Although SMEs are independent economic activities of the people and

managed by community groups or families, the existence of SMEs is thought to greatly affect

the economy as it contributes to the absorption of unemployment through the creation of new

jobs (Adomako et al., 2015). SMEs have at least three indicators that show a significant role in

the Indonesian economy. First, the number is quite large and covers every sector of the

economy. Second, SMEs have great potential in absorbing labor. Third, SMEs contribute

substantially to national income (Hasan, 2013).

Every business, whether large, medium or small-sized companies will certainly expect a better

performance from year to year. The Government of Indonesia has identified the SME sector as

the key to promoting growth, employment creation, and poverty alleviation. Currently the

contribution of SMEs to the National GDP is 60.3% (Tempo, 2016). Even said that the

Governor of Bank Indonesia will target the contribution of the SME sector can reach 70% of

GDP with the support of increased access to financial services for SME financing. Bank



153

Indonesia (2018) has also undertaken research and development of SMEs to improve access to

business credit by utilizing financial services such as credit and financing.

Java Island has the most population in Indonesia, which also makes East Java has the largest

number of SMEs amounting to 6,825,931 SMEs, scattered in several cities and districts, with

the distribution as shown in table 1. Based on table 1, Malang as the second area that has the

largest number of SMEs in East Java which still has the potential to become more developed as

SMEs in East Java.

Table 1. Distribution of Number of SMEs in East Java in 2016

District Number of SMEs

Kediri 29.306

Blitar 21.291

Malang 77.778

Probolinggo 26.125

Pasuruan 24.257

Mojokerto 17.480

Madiun 22.622

Surabaya 260.762

Batu 23.544

Source: Central Bureau of Statistics, 2016

SMEs are often perceived as the main driver of the economy and the source of job creation, yet

they often still face financial difficulties (Schwab, 2015). Loan disbursement for micro, small

and medium sized segments became a segment of interest both by the banking industry and

other non-bank financial services. SMEs that run their business in Indonesia are often informal

SMEs. The majority of them have not registered their business so that their business activities

are still not legal entities. This has the potential to be a barrier to cooperation between large

companies and SMEs (both as producers, suppliers, and service providers). From the financing

aspect, informal SMEs will have limited access to financing institutions, especially banks. In the

IMK 2013 BPS survey, 28% reported access to finance as a major constraint (International

Finance Corporation, 2016)

The World Economic Forum Competitiveness Report 2014 states that 11% of SMEs say that

access to financing is the most severe constraint factor. Citing the BPS report, 35.10% of SMEs

expressed capital difficulties, followed by market certainty of 25.9% and raw material

difficulties 15.4% (Noer, 2005). Under such conditions this group will be very difficult to get

out of the problems that usually have been running long, unless there is intervention from other

parties. References (Saudin, 2008) further say that interventions to break the chain of concerns

can be undertaken if there is strong commitment from the government and the community

through lending of capital.


154

Figure 1: SME barriers per Formal status

Source: International Financial Corporation (2016).

Figure 1 shows that lack of financing is one of the three major challenges in business run by

SMEs. Companies with lower turnover experience greater constraints in relation to access to

finance. Other barriers that faced by the SMEs besides access to finance for SMEs are

competition (66%), material or labor costs are high (37%), rent / lack of business premises

(22%) and lack of skilled staff / difficulties in maintaining staff Experts / skilled (23%).

Demographics aspect is one of several very important aspects in influencing entrepreneurship,

job creation and innovation (Stangler and Spulber, 2013). The severity of the problems faced by

SMEs varies, including in terms of mastering a business sector, legal structure, including the

age of the business (Fatoki and Asah 2011; Omiunu 2014).

According to data from the Central Bureau of Statistics, from 2 million units of micro

businesses, 40.8% are managed by women. Out of a total of 5.5 million employees working in

small companies and home industries, 45% of these workers are women. Women entrepreneurs

are more likely to be found in small and micro enterprise sectors than in large-scale enterprises.

According to data from the Indonesian Employers Association (IWAPI), of the sixteen thousand

members in 2006, about 85% were concentrated in small businesses, 12% in medium

enterprises and only 3% in large-scale enterprises. There are about 3,500 female cooperatives,

which constitute 30% of the total number of cooperatives in Indonesia. Most of them are located

outside of Jakarta and 82% of female owners or managers of small and medium enterprises have

monthly income of less than 50 million rupiah. Over 90% of women who own or manage small

to medium sized enterprises use their savings to build their business. In addition, many women

entrepreneurs have limited knowledge about access to financial institutions and still register

their businesses on behalf of their husbands.

One example, in Cameroon which consider as an emerging economy, gender is not associated

with business outcomes (Akinboade 2015), but other research found different conclusion

(Delmar & Wiklund 2008; Richbell, Watts & Wardle 2006). Gottschalk and Niefert (2012)

found that business-related experience varies between male and female firm owners. Popescu,

Deaconu and Popescu (2014) mentioned that most of the firms having lack of managerial skills

and experience there for they become underperform. In small firms, the owner usually assumes

has the role as a manager (Popescu et al., 2014), therefor the performance of the entity relies

heavily on the experience of the owner as a manager. This implies that business-related

experience plays a significant role in a firm’s performance.

LITERATUR REVIEW

Small Business Performance

Performance is a form of activity or program implemented by the head of the company to direct

and control the performance of employees, and provide an overview of the extent to which the


155

results achieved by the company (Sudiarta, et.al., 2014). Studies on employee performance

various measures (Radipere and Dhliwayo, 2014; Dele, 2012). These measures can be

summarized as financial and financial measures. Financial measures include cash flow, return

on assets, return on equity, sales and profit as a means of assessing firm performance. While the

nonfinancial measure includes aspects such as customer service, marketingeffectiveness, human

capital, strategy achievement, innovation, employee satisfaction, employee number, financial

practice, processes, andcorporate culture (Dele, 2012).

Some studies (Li, Huang and Tsai 2009) suggest a combination of financial and non-financial

measures in order to offer a complete evaluation of the business performance. The use of

nonfinancial data was adopted in this study for several reasons. Several scholars affirm that such

nonfinancial measures have been endorsed by both academic andmanagers. (Ii) Nonfinancial

data can provide indirect, quantitative indicators of a firm's intangible assets, and (iii)

nonfinancial measures are less susceptible to external " Noise "than accounting measures. Noise

being change inperformance measure that can not be controlled by business owner, such as

changes in the economy or even luck.

Secondly, the perceived measure of performance (perceived performance) was used as a

substitute to financial data as recommended by Dele (2012). This is due to the limitations of

financial data by Rooks, Szirmai & Sserwanga (2009) in the case of small businesses in Uganda.

Smallbusinesses are reluctant to share their financial data due to several reasons (eg, e-mail:

Rooks, Szirmai and Sserwanga, 2009), including no financial records, poor financial record

keeping or manipulating books for the sake of tax evasion tomention a few.

Size of Credit

Adequate working capital and use with careful planning will be beneficial, because with

sufficient working capital can enable a business to operate economically. The amount of capital

in need depends on the type of business to be worked on. In everyday reality we recognize the

existence of small businesses, medium enterprises, and large businesses. Each requires capital to

some extent. Thus, the type of business determines the amount of capital required. Working

capital is divided into three concepts, namely quantitative concepts, qualitative concepts, and

functional concepts. The working capital of a functional concept is based on the concept that

every fund used by a business is to generate income (income) (Oktavianti, 2013).

The results of the Federal Reserve Bank of New York (2013) survey show that of the 812 small

businesses surveyed in New York, New Jersey and Connecticut, the majority of owners said that

ease of access to capital was important, but only a third applied for credit. Those applying for

the majority credit experience better business performance.

Subjective measurements of performance are selected from objective measurements for several

reasons (Miles, et.al., 2000). 1) Small and Medium Enterprises are often very cautious and

strong in safeguarding business financial data. 2) objective financial data of small businesses are

not accurately publicized and are sometimes not available. 3) the existing data is largely

difficult to interpret. 4) subjective assessment by comparing with other similar business

performance would be more appropriate to use good.

Therefore, the hypotheses that can be built from the concept of the influence of credit to the

probability of improving the performance of SMEs are as follows:

H1: The amount of credit received by SMEs has an effect on the probability of improving the

performance of SMEs

Gender

The social feminist mention that women differ inherently as a result from early socialization

(Calas & Smircich 1989). When compared between women and men, then between women and

men have differences in achieving the desired goals (Verheul, Thurik & Grilo 2008). Due to


156

their different attitudes towards risk and growth, women, therefore, adopt a different approach

to business activities, thus resulting in small business entity size and lower expansion rates

When viewed from attitudes to risk and business development, women seem to adopt different

approaches in running their business activities, so this will result in small business entities and

low expansion rates (Gottschalk & Niefert 2012).

Men and women also view the world in different ways. Calas and Smircich (1989) Indicates that

Social Feminist theories suggest that the experiences of female respondents indicate a valid

basis for knowledge development and organizing society. By comparing with the views of

liberal feminist theories, then between men and women are not essentially similar by

fundamental nature. It is argued that male perception is regarded as innately superior or more

functional to the benefit of society (Gottschalk & Niefert 2012). Literature developed countries

provides a clear picture of how male- and female-owned firms differ in performance-related

issues - firm closure rates, level of sales, profits and employment creation (Robb & Wolken

2002).

The Asia Foundation reports that women have 35% of small and medium enterprises (SMEs) in

Indonesia. In the Asia / Pacific region, Indonesia ranks highest in terms of the number of

women as SME owners, although one of the reasons for the high entrepreneurship among

women can be attributed to low employment in the formal sector for women. Therefore, the

hypotheses that can be built from the concept of gender influence on the probability of

improving the performance of SMEs are as follows:

H2: Gender of SME owners affects the probability of improving the performance of SMEs

The Business Owner Age

It is a fact that the age of business owners in all studies is determined in years, and more

specifically within agegroups (Kaunda, 2012). TheILO (2006) revealed that one-third of all

successful entrepreneurs originate from the age group of 18 to 34 years. Similarly, Osunsan and

Sumil (2012) found that majority of small business owners within the range of 20 to 39,

accounting for half of small business owners in their study. (26%) within the age group 55 to 64

in his study.

Kaunda (2012), running a multiple regression, found that the age of owner has an inverse

relationship with business performance. More specifically he found that the age group of 18 to

24 made the most significant contribution to the performance, followed by the 25-34 year old

group. He however discovered that the age group 35-44 year old made a negative contribution

to performance.

Therefore, the hypothesis that can be built from the concept of the influence of age to the

probability of improving the performance of SMEs is as follows:

H3: Age of SMEs owner has influence to the probability of improving the performance of

SMEs

Education

Education is a form of long-term investment in the field of human resources, because the

benefits can only be felt minimalalsetelah ten years (Atmanti, 2005) Therefore, there is actually

a relationship between the level of income with the level of education The higher the level of

education the higher the productivity of employees and Ultimately affect the level of income.

Education simultaneously has a significant effect on income (Utari, and Dewi, 2012). There is a

relationship between income and education levels. The higher the level of education the higher

the level of employee productivity and ultimately affect the income level of a business. In other

words, education simultaneously has a significant effect on income.

Managerial competence is measured by level of education, managerial experience, from first

gaining experience and business knowledge that positively impact on the performance of Small


157

and Medium Enterprises (UMKM) (Hisrich and Drnovsek, 2002; Martin, 2008). Testing of

management competencies conducted by Martin (2008) on MSMEs who have been successful

in business practices, they found that lack of managerial experience, personal abilities and

qualities, was found to be a consideration of why a Micro Small and Medium Enterprise

(MSME) falls in business. Lack of education and training will reduce the ability of MSME

management in South Africa about failing to do business (Herrington and Wood, 2003).

Therefore, the hypothesis that can be built from the concept of the influence of education on the

probability of improving the performance of SMEs is as follows:

H4: SME owner education will have a positive effect on the probability of improving the

performance of SMEs

RESEARCH METHODS

Type of Research

This study aims to see a picture of improving the performance of SMEs based on the amount of

credit received, gender, age, and Education SME owners. The unit of analysis in this study is

SMEs in Malang who apply for credit to financial institutions of Bank and Non Bank. For non-

bank financial institutions, many respondents use the services of financial institutions from

cooperatives, KSU, and BMT (Baitul Maal wat Tamwil) in Malang.

Data retrieval

The data used are cross sectional data in the form of primary data taken using survey method

that is research method to a set of objects, but only take some of the population in a certain

period by using questionnaire. Selection of sample using Simple random sampling, where

sampling is randomly simple. This sample is taken so that each research unit or elemental unit

of the population has equal opportunity to be selected as sample. The data were collected during

October 2016 by taking locations in Sukun, Lowokwaru, Klojen, Kedung Kandang, Blimbing,

Kepanjen, Singosari, Dau Malang, Lawang, Sumber Pucung, Wagir and Pakis. Of the 100

questionnaires distributed, only 91 questionnaires were returned, and the complete data was

only 81 respondents.

Variable and Measurements

The variables used in this study consist of dependent and independent variables. The dependent

variable is the Improved performance variable of SMEs, as measured by see whether there is an

increase in turnover or not. This variable is a Dummy variable, based on respondent's answer

which is then expressed in category form. Category 1 for SMEs that shows an increase in

performance, Category 0 indicates there is a decrease in SMEs performance.

Other variables are independent variables, namely 1) The credit score, indicating the nominal

amount of credit received by the SME owner, and 2) Gender refers to the classified sex of the

owner of SMEs, ie male and female, 3) The age of the owner is classified into young age and

Old age, and 4) Education, which is classified based on the latest education of SME owners.

Table 2. Operational Definition

Variable Operational Definition Measurement

Value of

Credit

Amount of credit granted by the bank to

SME

credit = Ln (amount of credit

received)

Gender Gender SME owners 1 = Male 2 = Female

Age of owner Age of business owner classified based

on research Kaunda (2012)

Kaunda (2012):

1 = the age group of 18 to 24

2 = 25-34 year old group

3 = 35-44 year old

4 = more than 45 years old

Education Latest education from SME owners

1 = SD 2 = SMP

3 = SMA 4 = University


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Performance The results achieved by the company,

viewed from the financial and non

financial aspects, namely:

1. There is an increase in profit

2. There is an increase in turnover

3. There is an increase in the number of

labor

0 = no increase

1 = there is an increase in

walaupin only one aspect

Data Analysis Method

The research consists of descriptive and verification research. The data used are primary data

obtained from interviews and data collection in the field through questionnaires. The research

method used is: descriptive survey and explanatory survey. The object of research is the amount

of credit, gender, age, and education to improve the performance of SMEs. Measurement and

descriptive analysis is done to obtain the picture or portrait of respondents. The result of the

descriptive measurement is then used as the basis for performing statistical analysis. Further

technical analysis will be solved by using logistic binary regression model (binary logistic

regression).

Logistic logistic regression analysis (binary logistic regression) is used to see the effect of

independent variables X1, X2, ...., Xk on the dependent variable Y in the form of binary

response variable which has only two values or also predicts the value of a dependent variable Y

(which is a variable Binary) based on the values of the independent variables X1, X2, ...., Xk.

Defined α = 0.1 as the tolerable error level.

The binary logistic regression equation of this research is:

ln(ρ/1-ρ)= ρ =ρ) = ß0 + ß1(Credit ) + ß2(Gender) +ß3(Age) +ß4(Education)

FINDING

Characteristics of Respondents

Respondents of this research are the owners of SMEs located in Malang and still operate until

now. The number of Samples of 81 people, with the youngest age is 27 years old and the oldest

is 63 years.

Table 3. Respondent Characteristic

Variable Number of Responden %

Gender 1. Male 62 76,5 %

2. Female 19 23,5 %

Age 1. 18 – 24 0 0

2. 25 - 34 8 10%

3. 35 - 44 30 37%

4. > 45 43 53%

Pendidikan 1. Elementary 25 31%

2. Junior 16 20%

3. High 20 25%

4. University 20 25 %

Source: Results description of respondent tabulation, processed


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B. Model Feasibility Test

Iteration History table results in block 0 and 1 are as follows:

Table 4. The Result Test Blocks 0 and 1

Block 0 Block 1

-2 Log Likelihood 56,511 40,270

Overall Percentage 88,9 88,9

Source: SPSS output

The result of the Iteration History table in block 0 shows that the value of -2Log Likelihood (-

2LL) at the beginning (Block number = 0) is 56,511, while in Block Number = 1 denotes the

decreasing -2LL number, to 40.270. This indicates Likelihood's decrease in binary regression is

similar to the decrease in "sum of squared error" in the regression model, which shows a better

regression model (Santoso, 2015).

Overall Percentages results show the number 88.9. In Block number = 0, the overaall percentage

value before the independent variable is included in the model is 88.9%. The same result

obtained on block number = 1, also shows the value of 97.3%. This result means the accuracy of

this research model is sebear 88.9%.

Test of goodness of fit or model feasibility test for Logit Regression can also be done by

looking at the output of Omnibus Test, Nagelkerke R Square, and Hosmer and Lemeshow Test.

Table 5. Summary Output To Test The Model

Sig

Omnibus Test 0,003

Nagelkerke R Square 0,362

Cox & Snell R Square 0,182

Hosmer & Lemeshow 0,783

Source: SPSS output

Table 5 shows that the Omnibus Test yields a significance value of 0.003 (<0.05) indicating that

the addition of the variable can have a real effect on the model, and the model is said to be FIT.

If on the regression model (OLS) to test the simultaneous significance using the F test, whereas

in logistic regression using Chi-Square value. This test is called Maximum Likelihood test.

Therefore, the value of p-value (sig) Chi-Square is 0.003 where <0.05 indicates there is a

significant influence simultaneously between the size of credit, gender, age, and education on

the opportunities for SME performance improvement.

Table 3 also shows from the Summary Model, where the value of Nagelkerke R Square is 0.362

and Cox & Snell R Square is 0.182, indicating that the ability of independent variable to explain

dependent variable is 36.2% and there are 63.8% Beyond the model that explains the dependent

variable. The value if Linear regression (OLS) is known as R-Square, whereas in Logistic

regression known as Pseudo R-Square.

Hosmen and Lemeshow results can be used to compliment the Goodness of fit test. The

probability number is 0.783 where this number> 0,05 then Ho is accepted. This means that the

binary regression model is appropriate for further analysis, since there is no apparent difference

between the predicted classification and the observed classification.

Testing the Regression Coefficients

With the t test seen at the end of the output, it is seen that Educational variables are statistically

significant, visible numbers of significance below 0.05. Interpretation and Prediction The

equation is as follows:

Ln


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Table 6. Variable in the Equation

Variabel B Sig. Exp (B)

Credit 0,763 0,034 2,145

Gender - 2,017 0,020 0,133

Age -0,012 0,848 0,988

Education 0,310 0,417 1,364

Constant -7,760 0,194 0,000

Based on the results in the Variable in the Equation table summarized in Table 4, all

independent variables will be analyzed partially. Credit and Gender variables have a significant

value of 0.038 and 0.020 (<0.05), meaning that the amount of loans and Gender gives a

significant partial effect on the opportunities for performance improvement. While for age and

education variables show sig value> 0,05, so showing age and education do not give significant

partial influence to chance of performance improvement.

DISCUSSION

The results of this study are in line with the results of the Federal Reserve Bank of New York

(2013) survey saying that of the majority of small business owners applying for the majority

credit experience better business performance. It has also been explained that working capital is

based on the concept that every fund used by a business is to generate income (income)

(Oktavianti, 2013).

The results of this study also indicate that gender provides a significant partial effect on

performance improvement opportunities. However, by examining further the condition of the

respondents as a sample of the study, the proportion of male respondents far greater than female

respondents, so that gender influence is more likely to influence men as business owners. The

proportion of women in this sample is similar to that illustrated that the Female-owned

businesses, in absolute terms, are less than those owned by men (Gottschalk & Niefert 2012).

On the other hand, traditional expectations with regard to the male gender in societal settings

have not shifted signifikan. Such as in Indonesia, the fact that it is considered as breadwinners,

and women are expected only to fulfill the household duties and to care for the family

(Chinomona & Maziriri 2015).

Owner age has no effect on performance improvement opportunities. Scholars such as Levesque

and Minniti (2006) suggested that younger business owners run businesses that perform better

(in terms of growth), their argument is hinged on the believe that younger business owners are

more motivated, energetic, committed and less risk averse. Older business owners may wish to

mortgage payments and support a family is not longer present. The opposite is true for young

business owners. Belenzon and Zarutskie (2013) pointed out that the firm's performance drops

as the owner grows older and they specifically show that the owner of the age of 54 shows a

great level of performance decline in their business. Cressy and Storey (1995) suggest that the

survival rates of business by older entrepreneurs are higher than those by younger

entrepreneurs; In order for a business to survive long it has to perform well and survive.

Education is a form of investment in the field of human resources that play a role in spurring

economic growth. The higher the level of education the higher the level of employee

productivity and ultimately affect the level of income.

The ability and expertise of the owner or manager of MSME is determined from the formal

education that has been taken. The educational level of the manager or owner determines the

manager or owner's understanding of the importance of using accounting information. The

education of the owner or manager of the company will be measured on the basis of formal

education that has been followed. If the owner or manager of the company has a high school

education means the owner or manager has been educated for approximately 12 years. This


161

study supports the results of the research of Putra (2005) who found that the level of education

does not affect the size of income of street vendors in Medan. The similarity of this research lies

in the location of the business of the perpetrators of MSMEs located in big cities. Opening a

business in a big city is not influenced by the level of education because it is caused by a large

business competition and small business capital that makes UMKM actors difficult to grow. In

this study the average level of education of respondents who are still high school and equivalent

indicates that high school education is not able to provide knowledge for sufficient business

actors in running their business.

The owner of SMEs should also be able to play the role of managers in managing their business.

This requires them so they must also have managerial capabilities, one of which is measured

from the level of education so that they can manage their business well and achieve improved

performance (Hisrich and Drnovsek, 2002; Martin and Staines, 2008; Herrington and Wood,

2003) .

CONCLUSION

The conclusions that can be drawn from this research are as follows:

1. The amount of loan turned out to have an effect on improving the performance of SMEs.

This is due to the problem of availability of working capital to start a business becomes

the biggest obstacle of SMEs. The additional capital from credit provided by financial

institutions will make SMEs better able to create new innovations and improve

performance.

2. Gender Factor shows seemingly man and women owned SMEs has an ability and

perform at similar levels to achive such high business-related experience. In this study

did not distinguish the difference in contribution between men and women, so the

conclusions taken are general

3. Age factor does not show any influence on improving SME Performance. The majority

of respondents are aged between 35 years and above and belong to the Older business

owners group. It is said that their characteristics are already shifting aspirations, and are

not motivated to increase their business to support a family.

4. Education has no effect on improving the performance of SMEs. Opening a business in

Java (especially in big cities) is not influenced by the level of education because it is

caused by big business competition and small business capital that makes UMKM

actors difficult to develop. In this study the average level of respondent education is

high school and university, but the education of business owners can not afford to

provide knowledge for the sufficient business actors in running their business. The level

of education has no real impact on income because the location of the inland or rural

areas have no choice of business activity or type of work. This means that the level of

education affect the level of income, then there should be a choice of type of work and

within each type of job there is a job gap.

5.

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MOTIVATIONAL COMPENSATION DESIGN FOR SURGEON IN

NEUROSURGICAL GROUP SERVICES IN SURABAYA

1Asra Al Fauzi, 2Denny Bernardus♠


INDONESIA

Emails: [email protected] , [email protected]

ABSTRACT

Health development was an effort to fulfill one of the basic rights of the citizen,

it called the right to obtain health services. Furthermore, it was also an

investment to support the economic development and the poverty reduction.

Surabaya Neuroscience Institute, in order to improve the welfare of the

community tried to implement health development, especially those which

associated with neurological disorders. The success vision and mission of

Surabaya Neuroscience Institute was highly dependent on the performance of

its employees. It took a high motivation for physician working at the Surabaya

Neuroscience Institute to achieve optimal goals. A good compensation system

will support the employee's motivation. On the other hand, in the medical field

there was a different culture in term of applying this compensation system. In

addition to justice aspects, ethics and seniority aspects were still very

influential for the compensation model and the performance of physician. This

study was aimed to find a motivational compensation design for physicians

that would improve performance at the Surabaya Neuroscience Institute. This

research used descriptive qualitative method with in-depth interview and the

respondent was chosen by purposive non random sampling with 6 people

representing 19 member population of Surabaya Neuroscience Institute.

Based on the results, the analysis of respondent’s opinion indicated that

almost stated that there was still a problem in the motivation of the

physician’s work at the SNeI. In relation with the compensation system, it

showed that the financial compensation design is considered to be appropriate,

but the aspect of nonfinancial compensation need to be evaluated and

improved hence it can highly affects physician performance.

Keywords: Physician, Surabaya Neuroscience Institute, Compensation,

Motivation, Neurosurgical Services

INTRODUCTION Health development is an effort to fulfill one of the basic rights of the people, namely the right

to obtain health services in accordance with the Article 28 H paragraph (1) of the 1945

Constitution and Act Number 36 of 2009 concerning Health. In HDI measurement, health is one

of the main components besides education and income. Health is also an investment to support

economic development and has an important role in poverty reduction efforts. Health business

growth is around 50% per year (Rosalina and Hadinata, 2013). Coupled with the increasing

demand for quality health services in the region, due to the better economic growth (Pratama,

2015) to make the industry of health care services, especially in charge of nerve abnormalities is

a very strategic sector. On the other hand, the penetration rate of various medical indicators in




166

Indonesia is the lowest in the world (1.13 beds per 1,000 population, while for Singapore,

Thailand, Malaysia: 2.2 beds / 1.000 population) should be a concern for medical industry

players in Indonesia (Primary, 2015). Moreover, the government is currently actively promoting

BPJS Health and Prime Services Doctor (DLP) program, where the goal is the implementation

of constitutional mandate, the right to obtain health services can be accessible by all elements of

society, both in the city and in remote areas, and empowerment of existing human resources In

the face of the threat of Asean Economic Community (MEA). This should not a setback, but the

opportunity should be able to be a potential for the development of human resources and

continuous skill evident in a comprehensive effort to increase the quantity of the doctor.

SNeI in order to improve the welfare of the community seeks to carry out development in the

field of health, especially those associated with neurological disorders. To meet the needs of the

community in the field of health of neurological disorders, SNeI to make health development

efforts evenly throughout the province of East Java and Indonesia are quality and affordable by

all levels of society. The success of the company's vision and mission depends heavily on the

performance of its employees. Therefore, every employee is required to have knowledge, skills

and abilities, they must also have experience, motivation, self-discipline and high morale, so

that employees have good performance and company performance will also increase so that the

achievement of company goals will be optimal (Kusumah, 2015). According to Armstrong and

Baron (1998) there are several factors that can trigger employees to have good performance

such as skill level, competence, motivation, leadership, team trust, compensation and

organizational culture. In this research will be focused to know how big influence of

compensation to work motivation.

Along with the demands of excellent service quality improvement, the SNeI has upgraded its

human resources by sending them to some of the leading neurosurgery centers around the world

to take the fellowship so that it is deepening the field of neurosurgery ssubspecialist, so now the

SNeI Is one of the most comprehensive providers of health services in Indonesia. Other than

that, reputation SNeI is one of the best in Indonesia because it is affiliated with the center of

medical education and health care centers that are recognized in Indonesia. Given the

complexity of such a capability, supported by the opinion of Jay Kaks in Puspita (2013) which

states that doctors tend to maintain the image of the profession that are considered respectable in

society, so doctors tend to be arrogant and patronizing to further restrict

communication. Indirectly, the above is some of the reasons for the difficulty of maintaining as

well as build the motivation of the doctor's work in a health care company. One way to improve

work motivation according to Handoko (2004) is to apply a compensation system.

In previous research, conducted by Ndaru Prasastono (2012) note that compensation has a

significant effect on work motivation. On the other hand, when conducted with the same

variables by Julianingrum and Sudiro (2013), the result that compensation has no effect on

employee motivation and performance. That is, that direct or indirect compensation given to

employees has no impact on employee motivation or performance. SNeI has various doctors

members from individuals and hospitals where they work. There is a civil servant lecturer

(kemendiknas), functional civil servants (kemenkes), civil servant physicians and ABRI. Some

are functional and structural employees. Most are working in government and private hospitals,

but there is a small work in purely private hospitals, as a home doctor. Professionally also some

members already pursue certain sub-specialist and part of the activity as a general

neurosurgeon. With the BPJS program from the government, it also raises the dichotomy of

BPJS hospitals and non BPJS hospitals, where members also work in the two hospitals. With a

variety of backgrounds, functional activities and different hospitals, the workload impacts each

member of the SNeI is very different and varied. Until now, both financial and non-financial

compensation in SNeI has been implemented without considering the background, status and

type of sickness. Financial compensation is primarily based on performance in medical services


167

without considering other factors. This situation can lead to a sense of injustice and jealousy in

the long-term members who can affect work performance and continuity in SNeI.

LITERATURE REVIEW

Previous research Research and theory about employee motivation used prior to this study were taken from IOSR

Journal of Business and Management, titled Employee Motivation: The Key to Effective

Organizational Management in Nigeria. The journal published in 2014 discusses the

importance of employee work motivation in effective organizational management. The purpose

of this study is to determine solutions to efforts to increase employee motivation and its

consequences. Research in this journal is more focused on the understanding of work motivation

which should be prioritized based on the mastery of the concept of motivation, organizational

management, differences in individual needs, variations of motivational factors and dynamics

over time.

Compensation A well-compensated system will help the organization to achieve its goals, acquire, maintain

and maintain a productive workforce. Without proper compensation, employees will have a

desire to leave the organization. According to Malayu SP Hasibuan (1995, pp. 133, ed. 8):

"Compensation is all income in the form of money or goods directly or indirectly received by

employees in return for services authorized to the company". The compensation is in the form

of money, which means that the compensation is paid with some money to the employee

concerned. Compensation in the form of goods, meaning that compensation is paid with goods

(Hasibuan, 1995). Compensation can be divided into two: direct compensation (direct

compensation) in the form of salaries, wages, incentive pay and compensation

indirectly (indirect compensation or employee welfare) in the form of employee benefits

(Hasibuan, 1995).

In compensation should be noted that compensation can have different values for each

individual who receives it. This is because each individual has different needs, desires and

views from one another (Tanjung, 2005). According to T. Hani Handoko (2004), in his book

Personnel Management and Human Resources, in general compensation classified into two

parts, namely Financial and Non Financial Compensation. That are financial compensation can

be further divided into Direct and Indirect Compensation. Direct Compensation is the

compensation received by employees who have a direct relationship with the work, which is in

the form of wages, salaries, bonuses, and commissions. While Indirect Compensation is the

compensation received by employees who do not have a direct relationship with his work, such

as health insurance, educational assistance, paid during the leave and sick, and others. While

non-financial compensation consists of the satisfaction received by employees due to the

workers themselves and the work environment. For clarity the classification of compensation

can be seen in the following figure.


168

Table 1. Classification of compensation

Source: T. Hani Handoko, Manajemen Personalia & SDM; 2004

Motivation Motivation is a state in a person's person that encourages the desire of individuals to perform

activities to achieve a goal. With the motivation in a person will show a behavior directed to the

goal to achieve the goal of satisfaction. So motivation is a process to try to influence someone to

do something we want. When we accept motivation as an influence on behavior and if we

accept the notion that the greatest part of this influence on human behavior is the fulfillment of

the basic needs. So we will try to find out what these basic needs are. The process of motivation

begins with the need to show the deficiencies experienced by a person at a certain time (Tanjung,

2005). Unmet needs will cause people to start looking for ways to meet those needs, by having

actions to achieve behavior or actions against being evaluated. The evaluation results are used to

establish rewards or punishments. If there are unsatisfactory results, for example if the

employee's needs are not met, then a review is held, and so the process repeats from scratch to

form a circular pattern, as shown.


169

Figure 1. The process of motivation

Doctor The physician is a health worker who becomes the first contact point of the patient to solve the

health problems faced irrespective of the type of disease, organism, age group, and sex, as early

and as comprehensive, as possible, sustainable, and in coordination and collaboration with other

health professionals, Using the principles of effective and efficient service and upholding

professional, legal, ethical and moral responsibility (Love, 2008). The services held are limited

to the basic medical competencies he acquired during medical education. Arrogance in the

doctor's environment is not unusual and can damage the quality of health services. According to

Allan S Berger (2010), a professor of clinical psychiatry at the Georgetown University medical

school, arrogance arose out of sociological and psychological pressure. Thankfully, the trend

of reduction in the arrogance of doctors in a hospital environment showing signs of decline (Tan,

2013). Communication and leadership are now being taught in medical schools and residencies,

more nurses are brave to 'fight' doctors 'arrogance, and fewer hospitals tolerate doctors'

arrogance.

RESEARCH METHODS The problem to be studied by the researcher is a social and dynamic problem. Therefore, the

researcher chose to use descriptive qualitative research method to determine how to find, collect,

process and analyze data of research result. This qualitative research can be used to understand

social interaction, for example by in-depth interviews so that clear patterns will be

found. Furthermore, we will be given a careful description of the phenomenon that occurs on

how the compensation that can increase the motivation of the doctors in SNeI. In this study, 6

doctors were taken from the total population of 19 doctors working in SNeI. This is done so that

the data obtained is valid data and can find the problem appropriately. In the determination of

this sample, non-random sampling technique was used. This is done because the number of

doctors receiving compensation varies. So the sampling technique is hard to do. In this non-

random sampling technique there is no definite provision as to how many samples should be

taken to represent the population as well as the random sampling technique. Sampling is done in

the form of purposive sampling, meaning that certain people who have qualifications are the

sample of this study. Selection of the use of this technique is based on the consideration that the

sample to be studied has almost the same characteristics to be selected as the sample

respondents. Purposive sampling is chosen to be absolutely able to ensure that the respondents

are the elements to be researched and sure fit into the selected sample.


170

In this study, the subject of research is part of the doctors who are members of the core

membership of the SNeI, amounting to 6 people, out of a total of 19 doctors. In-depth

interviews (depth interview) conducted research to 6 sources of which are classified as

follows; 1) Neurosurgeon, 2) Domiciled in Surabaya, 3) Has joined SNeI at least 1 year, 4)

Practice in several health service centers. The criteria are chosen to get results that not only

meet market expectations, but also fit the theory from a doctor's point of view. In this study, the

object of research is the provision of compensation in improving the work motivation of doctors

at SNeI. The study of the object is devoted to the motivation of the doctors through seven major

themes related motivation factors that have been identified through research Willis-Shattuck et

al (2008). This research was conducted in the period of May to June 2017 in Surabaya. All data

used, including resource persons, are located in Surabaya, East Java. In this study researchers

used data collection techniques by means of observation, documentation, and interviews. To

avoid loss of information, the researcher asks the informant to use the tape recorder. Before an

in-depth interview, the researcher explains or gives a brief and clear overview of the topic of

research.

Data analysis begins by conducting in-depth interviews with key informants, which is someone

who really understands and knows the situation of the research object. After conducting the

interview, the data analysis begins by making transcripts of interview results, by playing back

the recorded interview, listening carefully, and then writing the words that are heard according

to what is in the recording. After the researchers write the results of the interview into the

transcript, then the researchers must read carefully to then do data reduction. The researcher

makes data reduction by making abstraction, that is taking and recording useful information

according to the research context or ignoring the unnecessary words to get the sentence core

only, but the language according to informant language. Abstractions that have been made in the

form of units then grouped by taxonomy based of the research domain.

RESULTS AND DISCUSSION In this study, researchers analyzed the compensation strategy used by the SNeI before the

study. Researchers analyzed compensation strategies based on data and interviews with

physicians. Researchers use the classification of compensation according to Handoko (2004)

which divides the compensation into two groups, namely financial and non-financial

compensation. Based on the opinions of the respondents, the researcher can analyze the

effectiveness of compensation design strategy owned by SNeI and add improvement of

compensation design strategy to increase the work motivation of the doctors. The researcher

determines the opinion of the pros and cons of the compensation design strategy. Here

are pros and cons of the design compensation SNeI:

Table 2. Pros and cons of compensation design strategy SNeI

Compensation Design Strategy Pros Cons

Financial The magnitude

of the current fixed

income received is good

enough compared ago

Fixed

income is still

too low, and

should be

improved.

Indicators for

assessing fixed income

and variable

income should be

developed from the

existing

Insurance has


171

been given by the

company

Special assistance

for those who will take

the educational program

has also been provided

by the company

The

assistance

provided by

the company,

is still far

from

expectations

in nominal

aspects given,

so that

members who

want to

increase their

knowledge

must bear a

greater cost

Aspects of time

worked and seniority to

determine the amount of

compensation

Better

productivity

factors should

also be taken

into account.

Non financially So far there has

been no specific

assignment of the

company to each

member about what

should be done by

members in their

respective positions in

their respective places

Members who

earn achievement in his

career has not been

optimized for a more

strategic lifted

The decision-

making process is

considered good enough

and in accordance with

the corporate culture

Need

to be

improved in

terms of

making a

decision,

often because

it is too

expensive

togetherness

it was agreed

to disagree,


172

so the

decision was

floating for

members

There is a system

of assistance to doctors

in SNeI, especially for

those who will attend the

scientific event.

The opportunity to gain

academic recognition is

wide open through the

holding of scientific

events.

Challenge in

every task is generally

quite high.

Based on the concept of strategy we make, and taking into account the pros and cons of

compensation issues at SNeI. Here's the recommended compensation design:

1. Financial compensation remains a concept combination of fixed

income and variable income. But for variable income plus bonus compensation

patterns that accommodate performance.

2. Indicators for performance appraisal other than medical service aspect, also

need to be reviewed from other aspect that is burden of teaching, research, and

achievement.

3. Financial compensation provided in the form of fixed allowance per month for

lecturers. As for research and accomplishments may be compensation

not determined a fixed routine.

CONCLUSION After researching and analyzing some aspects of compensation design at SNeI, it can be

concluded that:

1. Based on the analysis of respondents' compensation design strategy in SNeI relating to

the compensation system, indicates that compensation for members in SNeI have been

quite effective. However, compensation in the form of pure financial is not the main

thing, which needs to be optimized and improved is indirect financial compensation as

well as non-financial compensation.

2. Based on the analysis of respondents' compensation design strategy in SNeI related to

work motivation doctors, showed that almost all stated that there were still problems in

the motivation of doctors working in SNeI. Some of the things emphasized are no

member whose performance has not been optimized to improve the performance of the

company.

3. Based on the analysis of respondents' compensation in Surabaya design strategies that

relate Neuroscience Institute late with financial compensation, indicates that

compensation motivational design on the financial aspects broadly considered good

enough by the informant, but needs improvement, both in financial and non-financial

compensation by considering aspects of justice, ethics and seniority.


173

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Beer, M and Ruh, R A (1976) Employee growth through performance Management, Harvard

Business Review, July-August, pp 59-66.

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Cook, Curtis W. dan Hunsaker, Phillip L. 2001. Management and Organizational Behavior.

Third Edition. 2 title. North America: McGraw-Hill.

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Laschinger H, Finegan J, Shamian J. 2001a. The impact of workplace empowerment,

organizational trust on staff nurses‘ work satisfaction and organizational commitment.

Health Care Management Review 26(3):7–23.

Nujjoo, A., & Meyer, I. The relative importance of different types of rewards for employee

motivation and commitment in South Africa. SA Journal of Human Resorce

Management, 2012, 10(2), Art. #442, 10 pages.

http://dx.doi.org/10.4102/sajhrm.v10i2.442.

Prasastono, Ndaru. Pengaruh Gaya Kepemimpinan dan Kompensasi Terhadap Motivasi Kerja

karyawan Hotel Muria Semarang. Dinamika Kepariwisataan, 2012, 11(2), pp. 32-39.

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and benefits Review, September-October, pp 20-30.

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Executive, 10, 50-61.

Schaffer, R H (1991) Demand better results and get them, Harvard Business Review, March-

April, pp 142-49.

Schultz, D.P. & Schultz, S.E. 2005. Theories of Personality (8th ed). Australia: Thomson

Wardswarth.

Shermerhorn. 2005. Management 8th. USA: John Willy & Sons inc.

Timmerick, T. (2001) 'Managing motivation and developing job satisfaction in the

health care work environment', Health Care Manager, 20(1), pp. 42-58.

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174

ANALYSIS AND DESIGN OF EARLY WARNING APPLICATION

FOR PREGNANT WOMEN HEALTH FOR ACCELERATION

REDUCE MORTALITY RATE MOTHER AND BABY WEB BASED

AND SMS GATEWAY

1Made Kamisutara, 2I Putu Artaya

Teknik Informatika, Ilmu Menejemen, Universitas Narotama Surabaya

INDONESIA


ABSTRACT

The Millennium Development Goals (MDGs) goal is to reduce maternal

mortality and child mortality rates. These two factors are the main goals of

development in the health sector in Indonesia. The achievement of the MDGs

objectives is an aggregate of the data of each Regency / City. The target of the

decline in maternal mortality does not reach the target set. To support the

achievement of the MDGs, there is a need for support and cooperation from

various stakeholders, from strategic planning, implementation, to evaluation

and monitoring.

All districts monitor data of illness and mortality of mother and child. However,

the implementation is still far from the hope of being able to provide accurate,

fast and complete data. Stake holders often get late information about the event

of sickness and death. In fact, the data is incomplete. District or Provincial

Health Offices receive invalid reports. The data is the result of estimation from

past condition. It happens because the lack of personnel who understand the

importance of monitoring and lack of skills in running the right surveillance

system.

It needs a system that can facilitate hospital or health service to monitor the

health condition of the population to reduce maternal and infant mortality. We

analyze and design systems that connect with sms gateway so that people can

access information via web or sms.

Keywords: Early Warning, SMS Gateway, Pregnant Mother, Mortality

INTRODUCTION

Maternal and child health (MCH) is a complicated issue in Indonesia. Improving the quality of

health services requires the conducive of socio-political, legal and culture. Based on the

Indonesian Demographic and Health Survey (IDHS) 2015, maternal mortality still stands at 228

per 100,000 live births. Despite various improvement efforts and handling has been done, but it

is realized still needed a variety of support earlier. MCH program aims to improve the health,

especially mother and child optimally. One important element to support the goal is the

availability of data and information that is very useful in planning, implementation, monitoring,

and evaluation of health service outcomes. Most maternal and child health programs have not

been supported by adequate information systems in terms of recording, processing, and analysis

as well as interpretation and reporting.




175

All districts monitor data of illness and mortality of mother and child. However, the

implementation is still far from the hope of being able to provide accurate, fast and complete

data. Stake holders often get late information about the event of sickness and death. In fact, the

data is incomplete. District or Provincial Health Offices receive invalid reports. The data is the

result of estimation from past condition. It happens because the lack of personnel who

understand the importance of monitoring and lack of skills in running the right surveillance

system.

With the Early Warning Application of Maternal Health, it is expected to contribute to provide

accurate data so that it can make the right decision in order to reduce maternal and child

mortality during childbirth.

RESEARCH METHODS This research uses waterfall method. It is also known as classic life cycle. It describes a

systematic and also sequential approach to software development. It starts with user requirement

specification. Then, it goes to stages such as planning, modeling, construction, and deployment,

which ends with support for the complete software generated (Pressman, 2012). Stages of

waterfall method are as follows:

Figure 1. Stages of waterfall method

Waterfall method has several sequential stages: requirement analysis, design system, coding &

testing, and program implementation, maintenance. The stages of the waterfall method are as

follows:

1. Requirement Analysis

At this stage, the system developer must communicate with the user so that the

developer knows the software the user expects. This information is obtained through

interviews, discussions or direct surveys. Then, it is analyzed to get the data needed by

the user.

2. System Design

Specification needs of the previous stage will be studied in this phase. System design

helps to determine the hardware and system requirements as well as to define the

overall system architecture.

3. Implementation

At this stage, the system was first developed in a small program called a unit, integrated

in the next stage. Each unit is developed and tested for functionality. It is called unit

testing.

4. Integration & Testing

After testing each unit, all units are integrated into the system. Then, it is tested to check

for any failures or errors.


176

5. Operation & Maintenance

The finished software, it is run and maintained. Maintenance includes fixing errors that

were not found in the previous step. Improve the implementation of system units and

improvement of system services as new needs.

Source : Pressman, Roger S. 2012. Rekayasa Perangkat Lunak – Buku Satu,

Pendekatan Praktisi (Edisi 7). Yogyakarta: Andi.

System Analysis

Current running system

At this stage, the authors conducted a direct interview with the hospital staff. This interview

was conducted to obtain information, current problems and supporting documents data in the

form of hard copy and soft copy. Problems of hospital are as follows:

1. The handwriting of SIP data causes the difficulty of searching data

because data is difficult to read, except by the officer who records the data.

2. Posyandu officers often use a handbook to record SIP registers. Then, it is

moved into the SIP register.

3. Data is not written efficiently because it is written over and over again into

different formats. It causes data redundancy

Figure 2. Current Business Process


177

To-Be System

The system is created at this stage. It is based on current problems and system

requirements. Figure 2 is a system business process to be created (To-Be System).

Figure 3. Business Process to be created

System planning

The use case diagram illustrates the functionality of an early warning system

application of pregnant women's health. The system is accessed by two users, the

general user and admin user. General users can access 11 functionality systems,

while admin user accesses 9 functionality systems. The arrows that connect between

the admin user and the general user are generalizations. It means everything that can

be done by a general user, can also be done by the admin. For detailing each

functionality and image of the interface design report each function is described in

the next chapter. The use case diagram is illustrated as follows:


178

uc Use Case Model

SIM Sutera Emas -Web-

Umum

Melihat Halaman

Home

Melihat Berita

Melihat Laporan

Penyakit Berpotensi

KLB di Wilayah tertentu

Melihat Laporan

Wilayah Penyakit

Berpotensi KLB

tertentu

Melihat Laporan15

Besar Penyakit

Berpotensi KLB tertentu

Melihat Laporan

EWARS

Melihat Laporan

ICDX

Melihat Laporan

Surv eilans Terpadu

di Wilayah

Sebaran Penyakit

Berpotensi KLB

Tertentu di Wilayah

tertentu

Melihat profil per

puskesmas

Melihat Gallery

Mengelola Logo

Mengelola Kontak

Mengelola Slide

Mengelola Tematis

Mengelola motto

Mengelola Link

Mengelola Berita

Mengelola

Puskesmas

Mengelola Gallery

Admin

Figure 4. Use Case Systems


USER ADMIN

1. Log In

To enter into this application as an admin, you must login first. Then, you will

go to the main page. You can access other features. Illustration of login page is as

follows:

Figure 5. Log in page

2. Home Page

The Home page is the start page displayed when opening this website. When it opens

the start page or when you press the "Home" button, the system will bring up the page:


179

Figure 6. Home

3. Master Community Health Centre (Puskesmas)

To add a new Community Health Centre Profile, the admin presses the "Add

Community Health Centre" button on this page. Then, admin fills in the title and

description of Community Health Centre Profile on the available column.

Figure 7. Community Health Centre


180

4. Officer

Figure 8. Officer

CONCLUSION

Early Warning Application of Pregnant Women's Health can provide early information to

midwives, doctors and officers at community health centers and health departments so that they

can provide services to the community quickly and accurately.

After the application program is run, especially in Community Health Centre Kepanjen, is

expected to reduce the mortality rate of mother and child during childbirth.

REFERENCE

Khayati, Nur, Sri Yuliati, dan M. Arie Wuryanto, 2012. Beberapa Faktor Petugas yang Berhubungan

dengan Pelaksanaan Surveilans Epidemiologi Malaria Tingkat Puskesmas di Kabupaten

Purworejo. Jurnal Kesehatan Masyarakat FKM UNDIP, 1 (2): 364- 373.

Survei Demografi dan Kesehatan Indonesia (SDKI) , 2015

Kristanto Andri, 2010, Perancangan Sistem Informasi dan Aplikasinya, Jogya, Java Media

Pressman, Roger S. 2012. Rekayasa Perangkat Lunak – Buku Satu, Pendekatan Praktisi (Edisi

7). Yogyakarta: Andi.

Dharwiyanti, Sri dan Wahono, Romi, Satria. Pengantar Unified Modelling Language (UML) :

http://www.ilmukomputer.com/umum/yantiuml.php.2003

Munawar. Permodelan Visual dengan UML : Graha Ilmu. Yogyakarta, 2005

William Davis S, 1983, Sistem Analysis & Desaign : A Structured Approach Addition –

Westley Publishing Company.

http://www.ilmukomputer.com/umum/yantiuml.php.2003


181

INACTIVE PROBLEM RECOGNITION PERSPECTIVE IN

CONSUMER’S BUYING DECISION : STUDY LITERATURE

1Rony Prabowo, 2Moses L. Singgih, 3Putu Dana Karningsih, 4Erwin Widodo

1Doctorate Program Student, Industrial Engineering, Industrial Technology Faculty, Sepuluh

Nopember Institute of Technology at Surabaya,

INDONESIA; 2-4Department of Industrial Engineering, Industrial Technology Faculty, Sepuluh Nopember

Institute of Technology at Surabaya,

INDONESIA

ABSTRAK

Marketing activities are not just sales or advertising, but are focused on

fulfilling the needs and wants of consumers. In the fulfillment of their needs,

consumers have different preferences of products or services they need. In

addition, more and more choices are available for consumers to choose

products that suit their needs and wants. With the increasingly diverse range

of products and services it is increasingly also the desire of consumers

associated with these products and services. Consumers often have a desire

for products and services but can not describe clearly so that producers can

not understand the desire and can not realize consumer desires. The condition

of consumer and producer's lack of understanding in describing the need

related to this product is called inactive problem. In active problem, the

company only convince consumers that they have problem and company

product is the best solution in solving the problem. While the inactive problem,

the company must be able to capture the phenomena of consumer behavior

associated with problems that can not be disclosed (problem capture) so that

the company is able to provide products that can provide solutions to

consumer problems. Problem recognition with inactive problem approach has

the advantage that defining problem exist in consumer but can not or can not

be expressed by consumer if company can reveal and define it become a

concept of product development hence will be opportunity that product will

have some advantage if company can make it, The benefits are: the product

will have brand awareness for the consumer so that the consumer is more

loyal to the product, the product will have a long life cycle because the

competitor has not thought of the product with the inactive problem design,

product replication by the competitor takes a long time, Supernormal profits

and the company can make many derivative products.

Keywords : inactive, problem, recognition, consumer, behavior

INTRODUCTION

Consumers as stakeholders of a company that must be considered, have different behaviors and

perceptions. Consumers can determine the viability of a company, therefore the company must

be able to take heart and create a good image in the eyes of consumers (Katila and Mang, 2003;

Ashby and Johnson, 2006). Attribute analysis on consumer behavior is a fairly new demand

theory, in which the analysis of attribute approach states that consumer satisfaction on

purchased goods or services is not actually located on the product or service itself, but from the


182

characteristics or attributes attached to the product concerned. In other words, when a person

buys an item, actually does not buy the item, but purchases the attribute on the item, which is

generally the attribute of a good not just one, but there may be some (Coney, 2011; Calegari,

2013). Thus if there are some goods or services to be consumed, the first consideration is to

compare the value of attribute values on each - each item or service.

The purpose of marketing is to meet and serve the needs and wants of target consumers. But

knowing the consumer is not easy. Customers may declare the needs and wants of the consumer

and may act against influences that change the mind of the consumer (Cesarani, et.al, 2011).

Marketers or corporations must study the consumer's wants, perceptions, preferences, and

buying behaviors. It provides guidance on developing the product for new products, product

features, prices, distribution channels, markets and other marketing mix elements. Most

consumer needs are not strong enough to encourage someone to do something at a time. A need

becomes a boost when the need arises until it reaches a sufficient level of itensity. Motives are a

strong need to direct consumers to seek satisfaction with those needs (Lengnick and Hall, 2010;

Robertson and Catignan, 2011).

LITERATURE REVIEW

Behaviour Customer Model

The starting point of understanding buyer behavior is to understand stimuli and responses. The

stimulus of marketing and the environment goes into the mind of the buyer. Characteristics and

decision-making processes by consumers produce certain purchasing decisions (Negation, 2004;

Grawin, 2011). The task of the company to understand what is going on in the buyer's mind,

between the influx of outside influences and consumer purchasing decisions.

Stimuli

Pemasaran

Stimuli Buyer

Characteristics

Buying Decision

Process

Buying Decision

Product

Price

Place

Promotion

Economic

Technology

Politic

Culture

Culture

Social

Person

Pshycology

Problem

Recognize

Information

Search

Decision

Buying Behavior

Product Choice

Brand Choice

Shop Choice

Time Choice

Number Choice

Figure 1. Behaviour Customer Model (Kotler, 2013)

The marketing mix on the buying behavior model is the most important marketing stimulus

including: product, price, place and promotion. While marketing and the environment will enter

the consciousness of the buyers so as to form a buying decision process. Furthermore, buyer

characteristics that include culture, social, personal, psychology, and decision-making process

include the introduction of problems, information search, alternative evaluation, purchasing

decisions and behavior (Balachandra and Frior, 2007). Both of these will lead to the decision to

purchase certain products. The consumer's decision in making a purchase is not within an exact

being isolated from the surrounding environment. Their behavior is strongly influenced by

cultural, social, personal and psychological factors. Most of these factors can not be controlled

by marketers, but must still be taken into account. Kotler (2013) mentions four factors that

influence consumers in buying decision-making behavior are as follows:


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Culture

Culture

Sub Culture

Class Social

Social

Reference Group

Family

Role and Social

Status

Personal

Age

Stage of Life

Cyce Product

Economic

Condition

Life Style

Personality

Self Concept

Phsycology

Motivation

Perception

Learning

Trust

Attitude

Buyer

Figure 2. Factors Affecting Consumer Behavior (Markham, 2013)

Customer Models

According to Schiffman and Kanuk (2016) there are four consumer models that have different

perspective in making decisions, among others:

1. Economic Consumer. In a perfectly competitive market, consumers are often referred to

as economic consumers, ie consumers who make rational decisions. To make an

economical decision, one must recognize all alternatives, perhaps the consumer can

make a sequence of advantages and disadvantages with alternatives and can also identify

the best alternative. Nevertheless, consumers rarely have enough accurate information

that lacks the power level in motivation to make the perfect decision (Fabiani, 2005:

Hawkins, et al, 2011).

2. Passive Consumer. In contrast to economic man, passive man is described as a consumer

who basically adheres to self-serving interests and business ventures. Consumers

sometimes make purchases impulsively and irrational (Allione, et al, 2012).

3. Cognitive Consumer. Describe the consumer as an active person looking for products or

services that can meet the needs and enrich the lives of consumers. This model focuses

on the process by which consumers seek and evaluate selected information and retailers.

In this model the consumer is also described as an information processing system that

leads to the choice of choice and ultimately to the choice of purchase. In contrast to

economic consumer, cognitive man is more realistic and describes consumers as people

who do not search for all available information from each option, as they will

discontinue their information search once they have enough information about the

chosen alternative, which is enough information to make a decision Duanmu and Fai,

2012).

4. Emotional Consumer. Consumers always involve deep feelings or emotions when faced

with a purchase or to have something. This can be seen when consumers make

emotionally based decisions that do not emphasize the search for information before

purchase, but rather emphasize the mood, which means that emotional people can not

make decisions (Hosein, et al, 2011).

Types of Consumen Decision Making

The buying decision process varies greatly. Hawkins, et. Al (2011) divides the decision-making

process into three types, namely:

1. Extended Decision Making, the most comprehensive type of decision-making, stems

from the introduction of consumer problems that can be solved through the purchase of

multiple products. For this purpose consumers are looking for information about a


184

particular product or brand and evaluating some, whether each of these alternatives can

solve the problem. The evaluation of a product or brand will lead to a purchase decision.

The consumer will then evaluate the outcome of his decision (Thorgren, et al, 2009;

Senher, 2011). A broad decision-making process occurs for the specific benefit of the

consumer or for decision making that requires a high degree of involvement, such as

purchasing expensive products, containing prestige value and being used for a long time,

or for the case of first-time product purchases.

Figure 3. Types of Consumen Decision Making (Kotler, 2013)

2. Limited Decision Making. A limited decision-making process occurs when the consumer

knows the problem, then evaluates some alternative product or brand based on the

knowledge held without seeking new information about the product or brand. This

usually applies to purchases of less important products or routine purchases (Oxley and

Sampson, 2014). It is also possible that the process of decision-making is limited to the

needs of an emotional nature.

3. Habitual Decision Making. Customary decision-making process is the simplest process,

that consumers know the problem and then immediately take the decision to buy his

favorite brand (Duanmu and Fai, 2012). Evaluation occurs when the brand turns out not

to be as expected.

Inactive Problem Perspective

Purchase decisions will not be possible if consumers are not aware of a problem or identify

problems first, so the solution to be obtained from the problem that will be the goal to make a

purchase. The problem of the consumer may be an inactive problem and an active problem.

Low Involvement High Involvement

Habitual Decision Making Limited Decision Making Extended Decision Making

Problem Recognition

Selective

Problem Recognition

Generic

Problem Recognition

Generic

Internal Information

Searching (limited)

External Information

Searching (limited)

Internal and External

Information Searching

(limited)

Purchasing

Alternating Evaluation

A Little Attribute

Simple Decision Rule

A Little Alternating

Alternating Evaluation

Many Attribute

Complex Decision Rule

Many Alternating

Post Purchasing

No Purchases Matches

Limited Evaluation

Purchasing

Purchasing

Post Purchasing


Limited Evaluation

Post Purchasing


Complex Evaluation


185

Active problem is when the consumer is already aware or will be aware of a problem (Flynn et

al., 2010; McCutcheon, 2011; Meredith, 2013). Inactive problem is when the consumer is not

aware (Hawkins, et al, 2011). In active problem, companies only convince consumers that they

have problems and brand marketers are the greatest solution to the problem. While the inactive

problem, the company must be able to capture the phenomena - the phenomenon of consumer

behavior (customer behavior) in utilizing or using the products consumed.

According to Growin (2011), problem solving (problem recognition) consumer with

inactive problem approach is needed by company in new product development compared with

consumer problem collecting through active problem (Eisenhardt, 2006; Kotler, 2013).

Differences between Inactive Proplem and Active Problem can be seen in Table 1.

Table 1. Difference between Inactive Problem and Active Problem

No. Inactive Problem Active Problem

1. Consumers are not aware of the

existing problems associated with

the needs of consuming the product

(Ashby and Johnson, 2006)

Consumers are already aware of issues related to

product needs (Andido et al., 2011; Hosein et al,

2011)

2. Companies have little information

related to product problems that

consumers need (Vezzoli and

Manzini, 2008; Allione et al., 2012)

The company has a lot of information related to

product problems that consumers need

(Lindahl et al., 2013)

3. Consumers exhibit conative

behavior (psychological behavior

that leads to action) to meet needs

(Bhamra and Lofthouse, 2008)

Consumption decisions are based on the affective

aspect (how to respond to a good product by

receiving, responding and assessing) and

cognitive is how consumers remember and

understand the product(Baumann et al., 2002;

Boks, 2006; Borchardt et al., 2009)

FINDING

According to Alba and Hutchinson (2010); Kessler (2010) and Stanton (2013) consumers for

active problems generally have characteristics as economic consumer, ie people who make

rational decisions. In this case to make economical decisions, consumers must recognize all

alternatives, consumers analyze related advantages and disadvantages with alternatives and can

also identify the best alternative. While other characteristic is cognitive consumer that is

consumer which actively look for product or service that can fulfill its requirement. Consumers

with cognitive types seek and evaluate selected information and products. The cognitive

consumer in the processing of the selected information is directed to the choice of choice and

ultimately to the choice of purchase. The difference with the economic consumer, the cognitive

consumer is more realistic and does not look for all the available information from each option,

as the cognitive consumer will stop searching for information once they have enough

information.

As for consumers with inactive type generally characterized passive consumer that consumers

who are interested in buying at the time interested in buying or marketers require a hard enough

and creative efforts to persuade him to buy the product. Consumers sometimes make purchases

impulsively and irrational (Shenhar, 2014). And the second characteristic for the consumer with

the inactive type is the consumer conative that is the consumer who always involves a deep

feeling or emotion when faced with a purchase or to choose something. This can be seen when

consumers make emotion-based decisions that do not emphasize the search for information

before purchase, but more emphasis on mood, this means that the person chooses the product in


186

accordance with the wishes that have been there before but can not be expressed (Hawkins, et.

al, 2011).

Stages in new product development with inactive problem approach differ from new product

development stage with active problem approach. In general, the development approach through

the stages, among others, to observe consumer behavior related to how the use of products or

information search related to alternative needs replacement (Kirchain, 2011). This step is a very

important step to see consumer desire that can not be disclosed or see the phenomenon of new

idea as innovation opportunity required by consumer but not yet known by consumer (Moorman

et.al, 2011). The next step is to establish problem (problem recognizing) where it is important to

be a determination that there is a problem to the need for product development from existing

products to those who have an important role to the development of the product (Norman,

2012).

The third step to do is to adjust the innovation with the ability of resources, this as a basis to

measure the ability of SMEs in realizing the needs and desires of consumers who become a

capability to realize (tangible ability) new product development approaching or as desired

(Blindenbach et.al, 2010). Furthermore, SME management must be able to innovate new

product development process with knowledge management and inovative practice management.

It is very important to find the most effective and efficient way of making process or project and

to project the closest product Consumer desire (Calegari, 2013), in addition to the management

of resource use in accordance with the needs in realizing new products (Griffin et.al, 2012).

Figure 4. Stages of New Product Development through Inactive Problem Perspective

(Prabowo, 2016)

The fifth step in new product development through an inactive problem perspective is to create

a prototype with a physical type where real product development is made to estimate the

finished product (Gruner et.al, 2010). Aspects of the product that the development team is

Idea Generation

Concept Developing

Concept Evaluation

Core Concept and Design

Pre-Announcement

Product Launch

Post Production

Consumer Behavior Capture

Problem Recognition

Adjustable Resources and

Specialized Product Established

Trial and Benchmarking

Purpose Product to Special

Consumers

Product Modification

Specialized of Channel

Distribution

Product Relation Purpose


187

interested in are actually made into an object for testing and experimentation. The sixth step is

to market a new product or create a new marketing channel for a specific consumer, which is

marketing a product that has been created for a special customer or offering some features of a

new product made in comparison with an existing product to a particular consumer (Chen et.al,

2010).

The seventh step in new product development through inactive problem is by modifying the

product or process with lean and agile manufacturer approach, this is because the consumer with

the prototype or the new product that has become more understand the function or the desired

needs of the product so that it can provide input Or suggestions to further complement the

features or functions in accordance with consumer expectations (Katila et.al, 2014). The eighth

step is to create a special distribution channel, this is because the communication channel and

the consumer type on the inactive problem perspective are different from the active problem

perspective then in general the distribution channel for marketing new products with inactive

problem perspective is also special (Liesio et.al, 2013).

DISCUSSION

Researchers have conducted a study of 75 journals that discussed the development of new

products, SMEs and problem-solving either through the perspective of active problems and

inactive problems, but from the study researchers see that research related to new product

development through the perspective of inactive problem in SMEs is still not much discussed

comprehensively. The issue of new product development research through the perspective of

inactive problem at the time is an interesting and growing topic to be studied, this is because the

level of business competition is getting tight (red ocean) so that company need to apply rapidly

of product innovation.

According to Brezet and Hemel (2012) and Shenhar (2014) research into new product

development leads to the exploration of connective, behavioral and psychological aspects of

consumers because companies will be longer in innovation development if only expect feedback

from consumers (feedback) as more variations Of the product itself. This is reinforced by the

opinion of Stanton (2013) that the idea of new product development at a time of increasingly

fierce market competition will lead to the company's ability to know the psychological desire

and consumer expression or better known as micro expression method.

From the literature study that has been done by researchers, there is still no research describes

the relationship of each variable forming new product development with the perspective of

inactive problem comprehensively. Research conducted by Tambunan (2011) describes the type

or classification of SMEs in Indonesia in four types namely artisinal, active, dynamic and

advance, but does not discuss product development conducted by SMEs. Tambunan (2011)

focuses more on SME growth, the role of SMEs in Indonesia, the barriers of SMEs and SME

success factors in Indonesia While Cooper (2001), Carbonel, Rodriguez and Pujari (2009)

discuss the process and type of new product development in SMEs do not classify SMEs nor

explain the concept of collaboration undertaken by SMEs so as to develop new products.

Pershon (2004) and Hormiga at.al (2009) explained that SMEs who have the ability to develop

new products should have managerial knowledge or innovative types, but do not explain the

business aspects of cost analysis, profit projection, risk assessment and so on. While Shenhar

(2014) and Hawkins, Best and Coney (2011) describe the type of consumer for the perspective

of inactive problem: the passive and conative type in which the passive-type consumer has a

tendency to buy when interested in buying or tends to be impulsive and irrational so that the

marketer and the company must be creative To persuade him to buy the product. While the type

of conative is where consumers always involve deep feelings or emotions when faced with the

purchase or selection of products. However, this study does not specifically categorize


188

producers as SMEs and does not explain the concept of collaboration in new product

development.

Morales and Fernandes (2010), Meredith (2013) and Moran (2011) discussed the types of

collaboration undertaken by the company in the development of new products with consumers,

suppliers and competitors in innovation or innovative products resulting in various product

development alternatives new. But in this research does not discuss about the classification of

SMEs, research objects in large companies and managerial types. Similarly, research conducted

by Kaplan (2003), Puntonni (2004) and Zawada (2010) which discusses about business analysis

related to innovation in several companies with large corporate category with aspects of

problem determination, cost, sales projection, risk assessment, Process analysis, profit

projection and marketing design. However, the study did not explain aspects of consumer type,

managerial type or type of collaboration conducted by the company.

This review representatively and comprehensively describes the relationship and

interrelationship between the aspects that become the variables forming new product

development in Indonesian SMEs through the perspective of inactive problem that is type of

SMEs in Indonesia, managerial type, consumer type, type of collaboration and business analysis

concept so that can be developed into An appropriate business strategy for SMEs in Indonesia

with all its characteristics.


Problem recognition with inactive problem approach has the advantage that defining problem

exist in consumer but can not or can not be expressed by consumer if company can reveal and

define it become a concept of product development hence will be opportunity that product will

have some advantage if company can make it , The benefits are: the product will have brand

awareness for the consumer so that the consumer is more loyal to the product, the product will

have a long life cycle because the competitor has not thought of the product with the inactive

problem design, product replication by the competitor takes a long time, Supernormal profits

and companies can make many derivative products (Kim and Wilemon, 2009; Norman, 2011;

Oxley and Sampson, 2014).

Consistent product development and introduction as well as new product design is crucial to the

survival of most SMEs (Bessant, 2003; Uzzi, 2009). Products generated by SMEs generally

experience little change and if they want to remain competitive most SMEs must continually

improve their products (Harabi, 1998; Negassi, 2004). Decisions about the product affect the

decision of the operation, so the product decision must be carefully coordinated with the

operation to ensure that the operation is integrated with the product design. Through careful

cooperation between operations and marketing, market and product strategies can be integrated

with decisions about process, capacity, inventory and quality (Duanmu and Fai, 2007).

The development of new products through the perspective of inactive problem according to the

researchers more appropriately applied in SMEs because SMEs can directly interact with

consumers (interactive relational) more can give special attention to the consumer (Shenhar

et.al., 2014), SMEs have a fast in decision making process (Rapid response to growth

opportunities) so that new product development ideas are faster (Audretcsh and Fritsch, 2002)

and according to Jijou (2008) SMEs are able to create some types of products that are not

standardized and vary according to consumer demand (product made in small lots and Short

runs).

CONCLUSION

Stages in new product development with inactive problem approach differ from new product

development stage with active problem approach. In general, the development approach through


189

the stages, among others, to observe consumer behavior related to how the use of products or

information search related to alternative needs replacement.

In the inactive problem, companies must be able to capture the phenomena of consumer

behavior (customer behavior) associated with problems that can not be revealed (problem

capture) so that the company is able to provide products that can provide solutions to these

consumer problems.

Problem recognition with inactive problem approach has the advantage that defining problem

exist in consumer but can not be disclosed by consumer if company can reveal and define it

become a concept of product development hence will be opportunity that product will have

some advantage if company can make it , The benefits are: the product will have brand

awareness for the consumer so that the consumer is more loyal to the product, the product will

have a long life cycle because the competitor has not thought of the product with the inactive

problem design, product replication by the competitor takes a long time, Supernormal profits

and the company can make many derivative products.

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MARKETING ANALYSIS OF AGRICULTURAL PRODUCT

SWEET POTATOES USING MARKOV CHAIN

1Surjohadi, 2Heri Tri Saksono, 3Sugiarto

1,2 Program Studi Teknik Industri Fakultas Teknik

1,2 Universitas Kartini Surabaya

3 Program Studi Teknik Informatika Fakultas Ilmu Komputer 3 Universitas Pembangunan Nasional “Veteran” Jawa Timur

1,2 Jl. Raya Nginden No. 19-23, Surabaya, Jawa Timur 60233 3 Jl. Raya Rungkut Madya, Gunung Anyar, Surabaya, Jawa Timur 60294

INDONESIA

Email : [email protected], [email protected], [email protected]

ABSTRACT

Agricultural is one of major livelihood of Indonesians. The economic

aspects of it has also developed and noticed. In marketing its products

farmers usually accept any prices determined by the buyer. Markov

Chain Analysis is a method that studies the nature of variable in the

present based on its nature in the past in order to estimate the

variables’ nature in the future. Markov Analysis is a mathematical

technique to forecast changes on certain variables based on its

knowledge of previous changes.

Initial matter for farmer is the middleman, who buys in lower price than

the market price community. The next problem is almost all farmer in

the village still do not have ability to process their agricultural

products, so that the selling price of its raw products is very cheap. By

analyzing using Markov Chain a simulation of shifting and raising

selling price to the market can be made to depress prodution cost.

Eventually it will be able to raise living standard of farmers of the sweet

potatoes commodity, With the result of these research, farmers can save

so much expenses from maintenance cost until the balance of

production, because from the beginning all can be predicted by 5% of

error rate.

Keywords: Analisis, Pemasaran Hasil Pertanian, Markov Chain

INTRODUCTION

Agricultural is one of major livelihood of Indonesia people. Its economic aspect is started to

bloom and noticed. As a developed country, Indonesia has character and potential resources

development which depend on agricultural sector. Meanwhile, agricultural sector has

contributed a lot on foreign exchange, especially from main export commodity. It is confirmed

by Nainggolan (1998), that agricultural sector has strategic role, which is as main source of life

and income of the farmer, food producer for the community, raw and basic material for 2

processing industries, employment provider and workplace for the community, source of

foreign exchange earners and one of the resources preservation life. As source of foreign

exchange earners, position of agricultural commodity becomes more important and strategic in

Indonesia non-oil export, especially since the drop of oil and gas price (migas) on international




193

marketing 1992. Since then Indonesia export commodity in form of agriculture products keep

showing improving significant role. It is achieved by the increase improvement of product

quality in accordance with the provisions and qualification set up by international market. The

importance role of agricultural sector on Indonesia economics will not be decreasing.

In marketing their products, farmers usually accept the price determined by the buyer. On good

marketing which is profitable for production farmer and consumer, it has to involve minimal

trading institution. Short marketing chain will be more profitable or the farmer because selling

price will be higher and offered price to the consumer will be lower. Then increasing consumer

purchasing power and accelerate marketing result process. Every trading institution formed in

marketing will gain some different shares or profit due to management cost that has been issued.

The amount of marketing cost depends on marketing distance and management during the

process of marketing.

But during marketing conducts by farmer it is often faced by problems which are fluctuative

trends on price of sweet potatoes (unstable), so the earning results accepted by farmer are tend

to be lower than expense cost they have paid. It is showing that sweet potatoes marketing is less

than optimal and profit share the farmer receives are relatively low. Price of agricultural

products are always fluctuative depends on occured changes on short terms which is monthly,

weekly or even daily, or it can be happening on long terms. The condition is causing difficulties

for farmer to plan production, buyer will also have difficulties on predicting demands. Because

seen from its nature and use, sweet potatoes commodity is easily damaged / rotten (perishable)

so that it need to be marketed directly to avoid large loss for farmers and marketing network is

limited. So farmer is forced to sell sweet potatoes at offered price by collectors / middleman

which is relatively minimal. In this case farmer is in difficult condition to bargain because they

can not wait for sweet potato prices to go up due to its nature. So they are forced to sell them on

relatively low price.

Weak producer (farmer) do bargaining to get good price. Their ability in bargaining products

is still limited because of limited capital owned, there is tendency to sell their product in low

prices. Then the one who won a great advantage usually is the buyer. Of course market price

will be fluctuative, maybe higher or lower, both side will gain profit or loss based on contract

price rather than market price. Nevertheless predetermined price on contract will be considered

profit or loss only theoritically, which is linked to a lost opportunity. Another marketing

problem faced by farmer is poor market information. Market information is factor which

determine what to produce, where, why, how and for whom it is sold to for the best profit gain.

Those conditions causes farming performs without proper planning, especially in macro

condition

RESEARCH METHODS

Markov Chain

Markov Chain Analysis is a method that study natures of variables on present time based on its

natures in the past in order to predicting its nature in the future.

Markov Analysis is a mathematical technique to predict changes on certain variables based on

knowledge of its previous changes.

Considering a very significant generated impacts, marketing aspect of this farming products is

one of the main subject on the modelling. Many approach model has been served on review of

literature, one of them is Markov Chain. Markov Chain method is one of the oldest model and

has been applied by various researches. Muller and Middleton (1994) use this technique in study

the dynamics of land change in Ontario, Canada. Other researcher, Vandeveer and Drummond

(1976) use it to examine a construction impact on a reservoir. Although it showed less

significant impact on forecasting level, Markov Chain concepts has often served as base concept

which is use on advance development, such as CA-Markov model (Ye and Bai 2008; Poska et al.


194

2008). The Markov Chain equation is build on using the distribution of field use at the

beginning and end of observation which is presented in a vector (one column matrix) and a

transition matrix.

Markov Analysis is vvery often use to help determining business and industrial decision, such

as brand change, debt credit problems, operational machine problems, supervision analysis and

other problems. Generated information is not absolute becoming a decision, because its nature is

only to assist on decision making process.

Markov Analysis Characteristic

Markov Analysis can be use to analyze several different decision making situation. For example

analysis of brand changes conducting by customer. Markov analysis give informations on brand

changes probabilities from one brand to another or more other brands.

A small community has two gas stations. Machine A and Machine B. Members of the

community buy gasoline from those gas stations monthly. Marketer of Machine A conducts

survey to several people and find out that customer is not totally loyal to any gas station. They

will move to any gas station due to advertisement, service and other factors. Marketing find out

that when a customer buy gasoline from Machine A on any month, there is only 0,6 probability

that he/she will still buy from Machine A on the next month, and 0,4 probability that they will

buy from Machine B on the next month. Likewise when a customer holds transaction with

Machine B on a month, there is 0,8 probability that he will buy from Machine B on the next

month and 0,2 that he will buy form Machine A. Those probabilites are concluded at Table 1.

Table 1. Customer Movement Probabilities each Month

This month Next Month

Machine A Machine B

Machine A 0.6 0.4

Machine B 0.2 0.8

These examples are containing several important asumptions :

1. Notice that on table 1, the number of probability on each row is equal to 1.0. It means when

a customer holds transaction with Machine A in a month, he will definitely hold transaction

either with Machine A or Machine B on the next month.

2. Probabilities on table 1 applies to every customers who buy gasoline.

3. Everytime a customer buy gasoline, his probability to hold transaction on one of the gas

station on the next month is stated on table 1.

The happening events are independent event all the time.

RESULT

Markov Chain Methods Trial

Tabel 2. Data Pemetaan 1 Komoditas

Dates

Wide

Prod

uctio

n

(Ha)

Produ

ction

Result

(Ton/

Ha)

Product

ion

Value

(Rp.

/Ton)

Selling

Price

from

Middle

men

(Rp.

/Kg)

Harg

a Jual

Pasar

(Rp.

/Kg)

18/07/20

17 3 36

34,200,0

00 3,500 7,200

20/10/20

16 3 27

22,200,0

00 3,500 7,000


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30/10/20

15 3 31

28,000,2

00 3,000 6,500

Sumber : http://prodeskel.binapemdes.kemendagri.go.id

On table 2 above, It can be seen that mechanism of price determination on marketing a product

is one of key indicator of market behavior because it will ended up at number of earnings that

will be received by market players. Many factors can affect mechanism process of determining

price, such as level of competition between existing market players, regulation or rules from

governments and preference form buyers or consumers. The most common problems faced by

sweet potatoes commodity farmers is their helplessness on negotiating selling price of their

about to sold products. The current agricultural system has patterned with marketing network

structure which is tended to adverse farmers. The farmers’ helplessness toward access to

products market has caused increasingly difficult position in accepting some provisions which

are offered by market. Based on current phenomenon, one of the main components to determine

selling price of sweet potatoes commodity from farmers to collector buyer is the percentage of

water content. The higher percentage of water content of the product than price received by the

farmer will be lower. Meanwhile nature of farming management is still traditional. It is causing

the quality of product always below quality standard desired and set by the market. This

infirmity often becomes based for collector buyer to gain higher profits. Besides that, a long

marketing chain that has to be passed is causing certain problem of its own. Therefore it led to

inefficiency business as implication. Sweet potatoes commodity is marketable widely, on

domestic level until international ones. Thus, each fluctuation happens on both markets will

effects directly to determine price of sweet potatoes commodity. But the phenomenon that is

always happens is the farmers’ incapability to access each occurred changes. In other words,

price of sweet potatoes commodity at research location is always set by information belonged

by buyers. Development of price of sweet potatoes commodity cannot be accessed by farmers,

unless it is a based info that is given by those buyers.

Other factor that is influencing price determination mechanism is regulation or rules by the

government as regulator. Government regulation becomes determinants factor which have

power to make market players to obey them. However for sweet potatoes commodity,

government has not have regulation to set up mechanism for price determination as have been

applied on rice commodity (Sudaryanto and Kasryno, 1999) and for several kind of vegetable

oil (Suryana, 1999). Therefor development of price of sweet potatoes commodity only set up by

the strenght of farmers as producer on consumers at the market.

The production in the field on 2017 is 36 Tons,-

Sweet Potatoes Price per Kg = Rp 3.200,- (Middlemen)

Market Selling Price = Rp 7.500,-

Production Cost = Rp 30,- x 36.000 Kg x 30 days = Rp 1.080.000,- = 0,43%

Depreciation Cost = 0,90% +

Total Storage Cost = 2,13%

Product Storage Cost each Months = 2,13% x 36.000 kg x Rp 2.100,- x state i

Cost of shortage of supplies = Rp 530.000 + (Rp 2.100 x 36000 kg)

Based on Table 2, those datas will be uploaded statistically into data class groups, which are :

Range = Largest Data – Smallest Data = 3750 – 150 = 3600

Number of Classes = 1 + 3,3 log n = 1 + 3,3 log 24 = 5,54 = 6

Interval = 3600 / 6 = 600

http://prodeskel.binapemdes.kemendagri.go.id/


196

Assumpted that Early Data = 0, 600, 1200, 1800, 2400, 3000

Based on Markov Chain provisions, that decision making x, a state of system have transition

from state i to state j = I +x-d with probability Pij(x) = P(d)

Order cost = Rp 530.000

Storage cost = production number x price = 3600 X Rp 2.100 = Rp 7.560.000

Number of material taken is number of quantity that occured mostly on the table (modus).

Then Markov Chain calculation begins fot each state row, which are :

For i = 0 ;

x = 520;

if j = 0

Then j = i + x – d 0 = 0 + 100 – d d = 520 Probability Pij = P0,0(520) = P(d >= 100) = 1

For other probablity = 0 Shortage Cost = Order Cost + Storage Cost

[∑( d – i – x )

P(d)] = Rp 530.000 + Rp 7.560.000[(36000-520)0.42 + (1800 - 520)0.17 + (2400- 520)0.13 +

(3000 - 520)0.08 + (3600-520)0.04] = Rp 39.820.000,-

Table 3 Calculation Result of Markov Chain Analysis

Dates Wide

Production

(Ha)

Production

Result

(Ton/Ha)

N

Production

Value (Rp.

/Ton)

Selling

Price from

Middlemen

(Rp. /Kg)

Selling

Price

on

market

(Rp.

/Kg)

18/07/2017 3 36 39,820,000 4,500 6,500

Sumber : Data Olahan Probabilitas Analisis Markov Chain

CONCLUSION

Early problem of farmers is a middleman, who buy in lower price than public market price.

Next problem is almost all farmers in the village have no ability to process their farming

products. So then its raw materials’ selling price is very cheap. Analyzing with this Markov

Chain will create a shifting simulation and raise its selling price to the market by depressing cost

production. So later it can raise standard living of farmers of sweet potatoes commodity. In this

case farmer or in larger scope groups of farmers can count on production cost calculation with

market selling price using Markov Chain Methods. Considering its result can reflects total

supply by connecting cost must be paid by the company, for example total current production is

36000 Kg, then minimal cost production target is Rp.39.820.000,-. With this research result,

farmers can save so much from maintenance cost until production balance, because from the

beginning it can be predicted with 5% error rate.

REFERENCES Abdurachman Edi. (1999), Konsep Dasar Markov Chain serta kemungkinan penerapannya di

Bidang Pertanian, Journal Inform atika Pertanian Volume 8, Desember

Acharya, S. S. (1998). Agricultural Marketing in India : Some Facts and Emerging Issues.

Indian Journal of Agricultural Economics, 53 (3) : 311-332.

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Kabupaten Aceh Tengah. Tesis Magister Sains. Program Pascasarjana, Institut Pertanian

Bogor, Bogor.

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Efisiensi Pemasaran Ubi Jalar di Lampung Tengah Jurusan Agribisni Fakultas Pertanian

Universitas Lampung.

Arif Maulana Firdaus. (2004), Analisis Efisiensi Pemasaran Ubi Jalar Cilembu studi kasus di

Desa Cilembu Kecamatan Pamulihan Kabupaten Sumedang Jurusan Manajemen

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Kasus di Desa Pacet Kecamatan Pacet, Jurusan Agribisnis Fakultas Pertanian,

Yogyakarta: 2006. Djaslim Saladin, Unsur-Unsur Inti Pemasaran & Manajemen

Pemasaran Bandung: Mandar Maju.

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Assauri Sofjan. (2011). Manajemen Pemasaran. Jakarta: Raja Grafindo,.

David, F. R. (2006). Manajemen Strategis : Konsep, edisi 10 (Buku 1). Salemba Empat, Jakarta.

Erickson Steven P & W. David Downey. (1987) Manajemen Agribisnis. Jakarta : Erlangg.

Fatimah Siti Nurulita. (2011). Analisis Pemasaran Kentang (Solanum tuberosum L.) studi kasus

di Kabupaten Wonosobo, Jurusan Sosial Ekonomi Pertanian Fakultas Pertanian,

Universitas Sebelas Maret, Surakarta.

Amelia,S., et al. (2009). Integrasi kebijakan persediaan-transportasi. Jurnal Teknik Industri, Vol

11 (1), 2009, pp.15-32.

Assauri, S. (2008). Manajemen produksi dan operasi. Fakultas Ekonomi Universitas Indonesia,

Jakarta.

Nainggolan, K. (1998). Strategi Pemasaran Ekspor Pertanian dalam Pasar Global. Jurnal Agro

Ekonomika, 28 (2) : 53-73.

Kotler, Philip. (2001). Manajemen Pemasaran, Edisi Milenium. Jakarta: Prehalindo

Kuntoro Boga Andri. (2012) Analisa Manajemen rantai Pasok Agribisnis Tembakau Selopuro

Blitar Bagi Kesejahteraan Petani Lokal. Diakses dari http:pertanian.trunojoyo.ac.id pada

tanggal 24 November 2014 pukul 04.00 WIB

Lexy, J. Moleong. (2005). Metode Penelitian Kualitatif. Bandung: PT Remaja

Muhammad Khairil Anwar, Aji Dedi Mulawarman. (2014). Dari Ketergantungan Petani Menuju

Net Farm Income Berkeadilan (Etnografi Kritis Ketergantungan Petani Tembakau

Temanggung Terhadap PT. Bentoel International Investama). Diakses dari

jimfeb.ub.ac.id pada tanggal 19 Agustus 2015

Rambe, A. Jabbar M. (2005). Teknik Analisa Rantai Markov dalam Analisa Posisi dan

Perpindahan Fungsi Produk Sejenis. Jurnal Sistem Teknik Industri. Vol. 6 (5): hal. 1-4.

______http://prodeskel.binapemdes.kemendagri.go.id


198

EFFORTS TO IMPROVE PATIENT VISIT BASED ON

PERCEPTION, MOTIVATION, PERSONALITY, AND DECISIONS

TO USES HEALTH CARE ASPECT

AT SURABAYA LUNG HOSPITAL

1Setya Haksama

Faculty of Public Health, Universitas Airlangga, Surabaya

INDONESIA


ABSTRACT

Surabaya Lung Hospital is required to always put service to community

first and also always pay attention to economic principal. The condition of

inpatient admission is tend to be lower each year with BOR of 2013 is at

51,57 % 2014 is at 39,66 % and 2015 is at 40,00 %, below the standard

BOR value at 85,00%. Based on the information, the purpose of this

research is to conduct efforts to improve patient visit based on perception,

motivation, personality, and decisions to uses health care.

This research is a survey research on 50 respondents with cross-sectional

approachment, result of data collection is analized using value level 1

(very bad) until 4 (very good) and weight percentage using spider-web

analysis by total score 100,00. Result of the research shows that perception

aspect including accessibility score “good” by 2,86 (0,19), inpatients

procedure score “very good” by 3,32 (0,29), room facility score “bad” by

2,26 (0,20) and service quality score “good” by 3,01 (0,32); motivation

aspect score “”very good” by 3,35 (0,25); personality aspect score “very

good” by 33,60 (0,26); and decision aspect using health care score “very

good”by 3,49 (0,25)

Conclusion and suggestion that can be delivered to Surabaya Lung

Hospital to increase pasients visit is by noticing room facility aspect,

accessibility, and service quality in order to be fix immediately; improving

and maintaining inpatients procedure aspect, patients motivation, decision

to use health care, and personality.

Key word : Perception, Motivation, Decision Using Health Care,

Surabaya Lung Hospital.

INTRODUCTION

Surabaya Lung Hospital is a specialized hospital which is transferring into become public

hospital. Recently as a hospital that serves lung disease it is known that pasient visit tend to

decrease lower as seen as table BOR below.



199

Table 1. Hospital Utilization Indicator based on Health Ministry.

No Indicator/ (Standard) Year

2013 2014 2015

1 BOR (60,00% – 85,00%) 51,57% 39,66% 40,00%

Trend - -23,09 0,86

2 Number of Visits 14.330 16.203 16.483

3 Number of Beds 41 49 49

Source : Annual Report of Surabaya Lung Hospital year 2013, 2014, and 2015.

BOR score as work indicator of Surabaya Lung Hospital performance tend to look decrease and

below standard BOR score, year 2013 BOR is 51,57 % which decrease by 23,09% on year 2014

into 39,66%; on year 2015 BOR is 40,00% slightly decrease 0,86%. Probable cause of

decreasing patient visits is because there is image from the public that Surabaya Lung Hospital

is a specialized hospital on lung disease patients only, actually it can accept common patient too

which intend to be inpatient.

Based on that, a research is conducted related to patient perception including accessibility,

inpatients procedure, room facility and service quality; motivation; personality; and decision

using health care which are consumer behavior aspect in efforts to increase patient visit in-

patients to Surabaya Lung Hospital. Supranto and Limakrisna (2007) stated that in designing

product or service which is appropriated, it needs to understand consumer behavior well.

Hawkins, Best, Coney (2004) stated that it is important for marketer to acknowledge factors in

consumer behavior.

Purpose

The purpose of this research is to conduct efforts to improve patients visit to Surabaya Lung

Hospital based on aspects of perception, motivation, personality and decision using patient

health care.

Benefits

1. As reference and study material on hospital management in order to increase patient visit in-

patient to the hospital.

2. As reference to improve service quality which is held by the hospital.

RESEARCH METHODS

Design of the research is a survey with cross-sectional approachment which the respondent is

taken on a certain time to achieve image of perception, motivation, personality, and decision

using healthcare on Surabaya Lung Hospital.


Population

Research Population is all in-patient patients of Surabaya Lung Hospital. Population is a group

of subject or object which have certain characteristic that is different from other group of

subject or object, and those groups can be generalized from the result of research (Sumarsono,

2004).

Sample

Sugiyono (2010) stated that samples are part of number and characteristic which is had by the

population. Sample in this research is patient who has in-patients service at Surabaya Lung

Hospital as many as 50 respondent. There are inclusive criteria on patients who becomes

respondent, which are

1. Potential patients undergo hospitalization at Surabaya Lung Hospital.


200

2. Adult patients with minimal age of 17 years.

3. Agreeing patient to become research respondent and signing inform consent letter.

4. Patients is in conciuosness and able to communicate well.

Sampling assignment is using accidental sampling technique which is an engineering

sample determination based on existing conditions at the time by chance. Supriyanto and

Djohan (2011) explaine that accidental sampling gains respondents on existing conditions by

chance so that can be used as sample according to inclusive criteria. It is done because patients

visit at Surabaya Lung Hospital is relatively low.

Survey Instruments

Survey instruments is using questioner guidance which have been developed in a certain way to

gain information on perception consists of accessibility; inpatients procedure; room facility;

service quality; motivation; and decision using health care service at Surabaya Lung Hospital.

Data Analysis Technique

Data Analysis Technique is done to achieve several informations and analyze data process

which includes data editing process which is done to ensure and check completeness of the

contents of completed questionnaires. Follow by coding process and data entry. On above steps

it also does cleaning data mechanism.

Data analysis use measurement techniques assessment with score ranking of each

available question. Follow by measuring with composite each score on each question aspect of

the questioner. Score ranking given in questioner is as shown below:

1. Score 1 catagorize as Very Not Agree; Score 2 catagorize as Not Agree; Score 3

catagorize as Agree; and Score 4 catagorize as Very Agree.

2. Next average score obtained from the number of each aspect divided by number of

respondents to be categorized into some groups as below:

a. Range between 1,00-1,75 : included in the category “Very Bad” or “SK”

b. Range between >1,75-2,50 : included in the category “Bad” or “K”

c. Range between >2,50-3,25 : included in the category “Good” or “B”

d. Range between >3,25-4,00 : included in the category “Very Good” or “SB”

By obtaining those scores, then it is known and can become references and

consideration for Surabaya Lung Hospital in order to increase patients visit by doing

improvement and repairs on aspects that is found on low scores.

RESULT OF RESEARCH AND DISCUSSION

Description of Research Result

1. Overview of Respondents Condition

Overview of respondent condition expounded based on gender, ages, occupation,

education, and income expounded as shown as below:

Table 2. Respondent Characteristic Based on Gender

No Gender Number Procentage (%)

1 Male 21 42,00

2 Female 29 58,00

Total 50 100,00

Sumber: Data Primer

From above table data resut obtained is from gender there are more female at 58,00% than male

42,00%.


201

Table 3. Respondents Characteristic Based on Age

No Age Number Procentage (%)

1 More than 40 years 30 60,00

2 30-40 year 11 22,00

3 20-30 year 9 18,00

Total 50 100,00

Sumber: Data Primer

From above table data result obtained that 60,00% of respondents on ages above 40 years, while

age group 20-30 years there is 9 respondents or by 18,00%. This is shown that age of respondent

is dominated by they who are above 40 year. Probable because there are more illnesses suffered

by this groups.

Table 4. Respondents Characteristic Based on Occupation

No Occupation Number Procentage (%)

1 Jobless 32 64,00

2 Farmer 1 2,00

3 Factory workers 5 10,00

4 Privvate employees 2 4,00

5 PNS/ TNI/ Polri 0 0,00

6 Entrepreneur/ merchants 8 16,00

7 Etc 2 4,00

Total 50 100,00

Sumber: Data Primer

From above table data result obtained that there are majority respondents of jobless in 32

respondents or 64,00 %. No respondents from PNS/ TNI/ Polri who become inpatients patients

at Surabaya Lung Hospital. This needs to become main concern for managamenent of Surabaya

Lung Hospital to attract all elements of community to be treated at Surabaya Lung Hospital.

Table 5. Respondents Characteristic Based on Education

No Education Number Procentage (%)

1 Not educated 10 20,00

2 Finished Elementary School 14 28,00

3 Finished Junior High School 12 24,00

4 Finished High School 12 24,00

5 Finished Academy / D3 0 0,00

6 Finished Universities(S1/S2/S3) 2 4,00

Total 50 100,00

Sumber: Data Primer

Rom table above obtained data that based on education there are 14 respondents from Finished

Elementary School or by 28,00%, and that there are no respondents Finished Academy / D3.

Table 6. Respondents Characteristic Based on Income

No Income Number Procentage (%)

1 ≤ Rp.2.500.000,00 28 56,00

2 Rp.2.500.000,00 s/d Rp.4.000.000,00 18 36,00

3 ≥ Rp.4.000.000,00 4 8,00

Total 50 100,00

Sumber: Data Primer


202

Characteristic respondent based on income obtained by 56,00 % or as many as 28

respondent with income below Rp 2.500.000,-. Respondents whose income below Rp

2.500.000,- is possibly poor and member of BPJS Kesehatan in form of PBI (Penerima Bantuan

Iuran) and SKTM (Surat Keterangan Tidak Mampu).

2. Analysis of Respondents Perception Aspects (Accessibility, Inpatients Procedure,

Room Facility, dan Room Quality)

Analysis respondent perceptions which include accessibility, inpatients procedure, room

facility, service quality, are stated on table below:

Table 7. Result of Analysis respondent perceptions which include accessibility, inpatients

procedure, room facility, service quality at Surabaya Lung Hospital.

No Perception Aspect n Score Rate Desc.

A. Accessibility

1 Location of Surabaya Lung Hospital easy to reach 50 170 3,40 SB

2 Surabaya Lung Hospital passed by public transport 50 173 3,46 SB

3 Parking space Surabaya Lung Hospital wide and good 50 86 1,72 SK

Total A 429 2,86 B

B. Inpatients Procedure

4 To get inpatient room at Surabaya Lung Hospital is quick

and easy

50 181 3,62 SB

5 To obtained information about room availability on

inpatients at Surabaya Lung Hospital.

50 152 3,04 B

6 Admistration requirement at Surabaya Lung Hospital is

easy and not complicated

50 160 3,20 B

7 According to you Surabaya Lung Hospital have major

capacity of inpatients room

50 171 3,42 SB

Total B 664 3,32 SB

C. Room Facility

8 Inpatients room at Surabaya Lung Hospital are wide 50 118 2,36 K

9 Total number of bed in each room at Surabaya Lung

Hospital is ideal.

50 110 2,20 K

10 Facility of inpatients room at Surabaya Lung Hospital is

complete

50 108 2,16 K

11 Clean water supply in inpatient room at Surabaya Lung

Hospital is plenty.

50 115 2,30 K

Total C 451 2,26 K

D. Service Quality

12 Inpatients room at Surabaya Lung Hospital clean and

neat.

50 174 3,48 SB

13 Inpatients equipment at Surabaya Lung Hospital is

completed

50 121 2,42 K

14 Inpatients care at Surabaya Lung Hospital is fast. 50 120 2,40 K

15 Officer serves with friendly and polite manner 50 166 3,32 SB

16 Officer check on patients thoroughly 50 172 3,44 SB

Total D 753 3,01 B

Total A+B+C+D 2297 2,86 K

Sumber: data primer


203

0.000.010.020.030.040.050.060.070.08

1 Lokasi RS Paru mudah…

2 RS Paru dilewati…

3 Sarana parkir di RS Paru…

4 Untuk mendapatkan kamar…

5 Untuk mendapatkan…

6 Persyaratan admisnistrasi…

7 Menurut anda RS Paru…

8 Kamar rawat inap di RS…

9 Jumlah kamar tidur per…

10 Kelengkapan kamar rawat…

11 Kesediaan air bersih…

12 Ruang rawat inap di RS…

13 Peralatan rawat inap di RS…

14 Pelayanan rawat inap di…

15 Petugas melayani dengan…

16 Petugas memeriksa…

Based on table above, it is obtained result that show accessibility have total score 429 with

average score 2,86 which include in category “Good”, lowest score of accessibility aspect is

parking space at Surabaya Lung Hospital which is small and crowded. Inpatients Procedure

aspect which have score 664 with score rates 3,32 is include in category “Very Good”. For room

facility aspect obtained score 451 with score rates at 2,26 include in category “Bad”. While on

service quality there is a problem variable on completeness of in patients equipment score

2,42 means “Bad”, with total score on service quality obtained 753 with sore rates 3.01 include

in category “Good”.

Overall for this perception have score 2297 with average score 2,86 with include in category

“Bad”.

Next step is conducting aspect analysis by using spider-web which comparing procentage

score with available standard value, which result is shown as below.

Figure 1. Perception upon Accessibility, Inpatients Procedure, Room Facility, and Service

Quality at Surabaya Lung Hospital.

From picture above it is shown that accessibility aspect has low score on parking facility at

Surabaya Lung Hospital, with score value 0,04 from 0,06 standard. All room facility aspect

score are low, including facility inpatient room variable with score value 0,05 number of beds

score value 0,05 completeness inpatient room with score value 0,05, and clean water supply on

inpatient room score 0,05. While for service quality low score value is at incomplete inpatients

equipment and inpatients service that is not fast enough by each scores at 0,05 below standard

score 0,06.

Responden assessment linked to perception aspect is in accordance with what has been

described by some experts as stated by Suryani (2008) submitted that perception is a process of

how an individu choose, organize, and interpret stimulation into become something which have

meaning. Perception of each self about an object will be different upon same stimulation.

Perception is a patient opinion before getting inpatients care.

Kotler and Amstrong (2006) stated that perception is a process of someone in choosing,

organizing, and translating available information. A person can shape many different

perceptions from the same simulation. Definition of perception is “how we see the world around

us”. Hawkins, Best and Coney (2004) stated that perception is an information process model

which is useful and have four steps including exposure, attention, interpretation and memory.


204

0.230.230.240.240.250.250.260.26

17 Mendapatkan pelayananrawat inap yang ditangani

oleh dokter spesialis

18 Mendapatkan pelayananyang ramah, sabar, dan murah

senyum

19 Mendapatkan pelayananyang dekat dengan rumah

20 Dapat menerima pasienBPJS.

In the future Surabaya Lung Hospital needs to pay more attention on parking space and room

facility which is considered lack by patients or community. Respondent’s perception due to their

interest to assess service given by the hospital.

Therefore Surabaya Lung Hospital is obliged to to always understand and assess each coming

patients’ perception by doing simple research to obtain need and desire of the patients. It is

important if Surabaya Lung Hospital is able to measure the need and desire of the patients, the

in the future it can arrange health care that fit their needs. One of them is by managing parking

space, improving room facility, and improving healthcare quality gradually in accordance with

available resources condition. For budgeting it is wise to plan each year to improve those

variables with low scores.

3. Analysis Motivation Aspect

Analysis respondent motivation is an important matter to be assessed because it is as an effort to

response what represent inward strength which is invisibly response and encourage behavior

response and give certain direction for the response. The research is shown as below:

Table 8. Analysis Result on Respondents Motivation at Surabaya Lung Hospital.

No Motivation n Score Rates Des.

17 Getting inpatients care held by specialist doctor 50 167 3,34 SB

18 Getting service that is friendly, patients and smiling 50 160 3,20 B

19 Getting health care that is close from home 50 173 3,46 SB

20 Can accept BPJS patients. 50 169 3,38 SB

Jumlah Keseluruhan 669 3,35 SB

Sumber: data primer

Based on above data show that responden motivation total score obtained is 669 with average

score at 3.35 which means “Very Good”. This show that respondents motivation at Surabaya

Lung Hospital is in a very good condition to get inpatient healthcare held by specialist doctors;

close from home healthcare; and hospital accept BPJS patients. While friendly, patients and

always smiling service has gain total score of 3.20 within category “Good” which relatively

lower than other variable.

Next step is conducting aspect analysis by using spider-web which comparing procentage score

with available standard value, which result is shown as below.

Figure 2. Respondents Motivasi Aspect Surabaya Lung Hospital.


205

0.23

0.24

0.24

0.25

0.25

0.26

0.26

21 Merasa senang berobatke RS Paru karena nuansakekeluargaan yang tinggi

22 Saat disarankan dokteruntuk rawat inap segera

mencari informasikesediaan kamar.

23 Saat disarankan dokteruntuk rawat inap segeramenyiapkan persyaratan

rawat inap.

24 Saat disarankan olehdokter untuk rawat inapsegera mempersiapkanbiaya rawat inap yang

diperlukan.

From picture above it can seen that motivation variable on friendly, patients and smiley service

get lowest score than other variables with value score at 0.24 compared with standard value at

0.25. Management of Surabaya Lung Hospital need to improve friendly, patients and smiley

service by accustom and encourage this manner each day while serving the patients.

Motivation is an important thing because motivation is a supportive of human behavior.

Motivation gets more important so that consumer can get its desired goal optimally. According

to Nugroho (2003) stated that motivation is a tendency of nature that is the main contention

inside a person to evoke action. While according to Suryani (2008) stated that motivation is an

emerging process of impulse so that consumer moves to buy a product. Nevertheless motivation

is an impulse of needs and will of individu which iss directed to a goal for achieving satisfaction

(Hawkins, Best and Coney, 2004). That is why Surabaya Lung Hospital need to keep

respondents motivation by maintaining its very good service and improving its friendly, patients

and smiley service because respondents assess this variable relatively low.

4. Analysis of Personality Aspect and Decision Using Inpatients Health Care Facility

Analysis of Personality Aspect and Decision Using Inpatients Health Care Facility is combined

because personality aspect only has 1 (one variable) analysis. The result is shown as below:

Table 9. Result of Personality Analysis and Decision Using In patients Health Care

Facility at Surabaya Lung Hospital.

No Personality Aspect and

Decision Using Health Care Facility

n Score Rates Desc.

A. Personality

21 Feeling happy to have medical treatment at Surabaya

Lung Hospital because its highly familiar feeling

50 180 3,60 SB

Total A 180 3,60 SB

B. Decision Using Inpatients Health Care Facility

22 When suggested by doctor to inpatients immediately seek

information about room availability.

50 168 3,36 SB

23 When suggested by doctor to inpatients immediately

prepare its requirements.

50 178 3,56 SB

24 When suggested by doctor to inpatients immediately

prepare its necessary inpatiens expenses.

50 177 3,54 SB

Total B 523 3,49 SB

Total A+B 703 3,54 SB

Sumber: data primer

Based on data of table above it is obtained result that score value of personality shows 180 with

average score 3.60 means “Very Good”. Respondents personality related to medical care is high

because high familiar feeling qat Surabaya Lung Hospital.

Figure 3. Personality Aspect and Decision Using Health Care at Surabaya Lung Hospital.


206

From picture above it is seen that personality aspect shows score value as 0.26 above standard

score value 0.25. It is in line with research conducted by Abdul Ghani (2011) which mentions

that personality is a psychology order and environment influences including character. On the

other side Ginting (2011) also mention that personality often defined as individual characteristic

which is a combination of charater, temperament, common ability and talent which in its

development is influenced individual interaction and its environment.

Personality can be defined as a characteristic of one individu which involve several psychology

processes which will determine its tendency and response toward environment. Therefore,

familial shades that have been built by Surabaya Lung Hospital right now need to be always

maintained and even improved. While in decision using health care aspect shown in related

variable in suggestion to inpatients respondent is not immediately seek information on room

availability. This maybe because basically one behaviour in buying something also influenced

by personality factor of its related consumer.

For decision using health care aspect obtained total score value of 3 (three) questionare

variables as 523 with average score 3.49 means “Very Good”. Related to decision using health

care is conformed by Kotler and Armstrong (2003) which stated that one decision to buy is

influenced by personal characteristic such as age and life cycle phase, work, economic situation.

Buyer decision is also influenced by individual factor. Personal is deepest characteristic

difference of human. Characteristic differences describes unique signature of each individuals.

Therefore, one individu is not the same with the other. According to Amalia (2011) stated that

one habit is influenced by their nearest environment to make a choice, then it express in an

action.

Therefore to decide using health care personality need to e considered because each person has

personal character which will determine their buying behavior. Personality factor is a way to

collect and grouping reaction consistency of an individu towards happening situation

(Lamb.2001).

Next phase is doing analysis of personality aspect and decision using health care by using

spider-web which is average score compared with available standard score value, which result is

shown as below.

CONCLUSION AND SUGGESTION

Conclusion

Conclusions obtained that can be conveyed from research result are:

1. Perception aspect has low score on accessibility variables: parking facility; all room

facilities variable; and quality service: completeness equipment and speed service of the

hospital.

2. Motivation aspect has a need to improve score on friendy, patient and always smiling

service variable.

3. Personality and decision using health care has variable on suggestion to inpatient which

patient is not immediately seek information on available room.

Suggestion for Surabaya Lung Hospital Advisable suggestion to improve pasients visit at Surabaya Lung Hospital based on

research result are as below:

1. Conducting setting up parking space, improving room facility, and improving medical

care service quality gradually accordance to available resources condition.

2. Organizing training for excellent service regularly especially for behavior and ethics to

stay friendly, patient, and always smiling so that the culture is completely dive in every

officer at Surabaya Lung Hospital.


207

3. Developing an information system related to room availability, so that patient can

directly be able to know availability of empty room when suggested to be inpatients.

4. Budget need to be plan annually as effort to improve condition on every aspect and

variable which has low score.

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Utama Banjardowo Semarang). Jurnal Kajian Akuntansi dan Bisnis. Volume 1, Nomor

1, 2012.

Ginting, Nembah F. Hartimbul. (2011). Manajemen Pemasaran. Cet. 1. Bandung: Yrama Widya.

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ementerian Kesehatan, RI. (2009). Undang-undang Nomor 44 Tahun 2009 Tentang Rumah

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Prenhallindo.

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Memenangkan Persaiangan Bisnis. Mitra Wacana Media, Jakarta.

Suryani, T. (2008). Perilaku Konsumen: Implikasi pada Strategi Pemasaran. Graha Ilmu,

Yogyakarta.

Tjiptono, F. (2005). Perspektif Manajemen dan Pemasaran Kontemporer. Andi. Jogjakarta.

Zaltman, G; Wallendrot, M. (1983). Customer Behavior: Basic Findings and Management

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Zeithaml, A; Bitner, MJ. (2003). Services Marketing. International ed. Singapore: The

McGraw-Hill Companies, Inc.


209

INNOVATION STRATEGY ANALYSIS IN UD. X USING

BUSINESS MODEL CANVAS AND TEN TYPES OF INNOVATION

TOOLS

1Steven Irawan


INDONESIA

Email : [email protected]

ABSTRACT

The ever growing Indonesian real estate industry has enticed businesses to take

advantage of the current hype, in which one of them was UD. X. however,

contrary to the overall market, UD. X has not achieved its management – set

sales objectives for months on end. This issue is what started this study. This

study, which is qualitative by nature, intends to analyze the system and business

model of UD. X through tools Business Model Canvas, Blue Ocean Strategy,

dan Ten Types of Innovation, based on sales perspective of UD. X. This study

began with data foraging across a number of sources in order to more vividly

conjure the actual business model of UD. X. From the business model, this

study will further scrutinize each of its segments, which will then be processed

by Blue Ocean Strategy tools so that the study can reveal which elements need

to be improved, eliminated, or established. After the model is processed through

BOS, there will indeed be a set of key elements to add, eliminate, and/or

establish – in which these elements need to be mapped further into TTI.

Through TTI, it was revealed UD.X needs to focus on customer experience

aspect, in order to improve their business.

Keywords: innovation strategy, business model canvas, blue ocean strategy, ten

types of innovation, marketing mix, strategy analysis.

INTRODUCTION

The growth of Indonesia’s property industry is blooming as of late, encouraging businesses to

exploit the uptrend. One of those is UD X, which was established back in 2015 and working in

roof construction. UD X offers steel based roof installment for homes and other buildings, in

which its flea and weather resistant as well as fairly affordable components made it highly

favored for modern home constructions. In addition, wood materials are also getting scarce –

putting steel roofs industry in a favorable condition.

However, the current condition speaks otherwise. UD X has been fairly vacant – only taking 2-3

projects a month, whereas they were able to finish 10 monthly projects in regular. In order to

survive within this increasingly competitive environment, the business requires accurate

marketing and strategic analysis. According to Philip Kotler, marketing strategy is “a logic used

by a business to achieve business objectives”(Kotler, 2001: 76).

One of the tools often used to analyze business models is Business Model Canvas (BMC). In

BMC, a business will be scrutinized from nine interconnected perspectives, be it from owner’s

perspective as well as customers’. These aspects will then be analyzed further through Ten



210

Types of Innovation tool, where a proper innovation strategy can be laid out through the

mentioned nine perspectives. As such, the author will attempt to formulate a strategy with the

hepkl of BMC and Ten Types of Innovation.

LITERATURE REVIEW

Previous research

One of the journals used as a basis of this study is by Suharti on 2015, titled ‘Penerapan

Business Model Canvas Pada Perumahan Galaxy Regency Malang’. This study used qualitative

approach, based on the actual facts in the field. This study explains in detail the business

activities of Galaxy Regency Malang. After processing its business model through BMC,

Suharti concluded that Galaxy Regency Malang need only focus on its key activities.

Business Model Canvas

Business Model Canvas is a strategic management and lean startup template for developing new

or documenting existing business models. It is a visual chart with elements describing a firm's

or product's value proposition, infrastructure, customers, and finances. It assists firms in

aligning their activities by illustrating potential trade-offs.

BMC defines basic thoughts on how a company operates. BMC illustrates a detailed steps on

this matter. Osterwalder divides a business into nine important aspects, called nine building

blocks: Value Prepotitions, Customer Segments, Customer Relationship, Channels, Key

Resources, Key Partnership, Key Resources, Cost Structures dan Revenue Streams. According

to Osterwalder (2010), innovation ideas can be sourced from any kind of sources. Osterwalder

divides a business model innovations into five parts: Resource-driven (based on infrastructure

developments), Offer-driven (based on increased value add), Customer-driven (based on

customer requirements), Finance-driven (based on cash flow and cost management), and

Multiple-epicentre (based on multiple factors as above).

Ten Types of Innovation

According to Keeley et al., (2013: 16) Ten Types is a tool to diagnose and enrich the current

innovation processes, or to analyze the current competition and come up with a solid concept.

Ten Types of Innovaton is divided into three categories: Confinguration (emphasis on internal

business systems – marked in blue in the model), Offering (depth of product/service concept –

marked in orange in the model) dan Experience (emphasis on customer experience and

satisfaction – marked in red). (Keeley, 2013)

RESEARCH METHODS

Research methods are the approaches used to gather, process, and deduce the data in a research.

There are two big methods: qualitative, which emphasizes deep understanding on an issue

through descriptive analysis, and quantitative, which depends on systematic, structured, and

planned approaches along with quantifiable variables as its data references.

In this research, the author chose qualitative approach, with descriptive study case. This

research was conducted within April to November 2016 in Surabaya.

All researches focus on a certain subjects. A research subject can be defined as a person, place,

or object in focus of a research (Kamus Bahasa Indonesia, 1989:862). To acquire appropriate

information, the source has to be appropriate as well. In this research, the author established a

number of criterions on choosing the sources. One of the better sources are the employees from

its respective companies, and also its customer. The criterions can be seen as below:

Table 1. Specific criteria for determine the research subjects

Source Criteria

Company employee Minimum two years of working

Customer Two times buying or more

https://en.wikipedia.org/wiki/Strategic_management

https://en.wikipedia.org/wiki/Lean_startup

https://en.wikipedia.org/wiki/Business_models

https://en.wikipedia.org/wiki/Value_proposition


211

Applying

Calculating

Worker

Ilmu dasar

Harga sesuai

Warranty

SNI

Personal Assistant –

Special discount

Workshop

Flyer

Developer/kon

traktor kelas

menengah ke

bawah

Material; Worker Fee

Fixed cost

Sales

Buyer-

Supplier

Relationship

On the other hand, research object is basically the objectives of the research (Kamus Bahasa

Indonesia; 1989:622). According to Supranto (2000), research object is a set of elements

(person, place, or object) being researched. In this research, the object is UD X.

After the subjects and objects are chosen, then it will come up to data gathering. In this research,

the data will be gathered through direct interviews and observations. These data will then need

to go through validity test, in order to determine whether the data has reflected the actual

condition. One of the ways to make the data valid is through triangulation. According to

Sugiyono (2010), data triangulation can be defined as a combination of existing data sources

and gathering methods. There are three types of triangulation: technicality, time, and sources. In

this research, the author will employ technicality triangulation, which is multiple data gathering

methods towards UD X.


The author has conducted interviews on four different sources:

Table 2. Criteria details for informant

Name Age Occupation Relation to UD X Code

Budiarta Arif 63 Contractor Customer BA

Suyanto Irawan 57 Entrepreneur Owner SI

Yuki Simon 32 Private Contractor New Customer YS

Mudji 37 Private Contractor Employee M

After a set amount of interviews towards all sources and the required data has been gathered, the

author try to analyze the information and map it through nine blocks of BMC. The result is as

follows:

Figure 1. UD. X’s Business Model Canvas

After the mapping of UD X, the author attempted to delve deeper for further data in

aforementioned interviews, which will then analyzed with Blue Ocean Strategy, so that the

aspects can be classified to the following:


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Table 3. Blue Ocean Strategy results

From aforementioned four factors, the author will then attempt to construct new business

canvas:

Figure 2. New version of UD. X’s Business Model Canva

After the new business model is established, there are a number of factors singled out, in order

to be improved or fixed, which will then be analyzed further through then types of innovation.

According to Keeley et al (2013:16), ten types is a structure to analyze, diagnose, and enrich

the current innovation attempts, as well as analyzing the current competition to develop solid

concepts through ten specific aspects. Ten types structure is divided into three: Confinguration

(emphasis on internal business systems – marked in blue in the model), Offering (depth of

product/service concept – marked in orange in the model) dan Experience (emphasis on

customer experience and satisfaction – marked in red). The result is as follows:

Eliminate Raise

-

>> Promotion and

advertisment

>> Service level

Reduce Create

>> Selling price >> New variant

Applying

Calculating Training

pegawai

Worker Prinsip dasar

Harga sesuai

Warranty

SNI Varian baru lebih

lengkap

Personal assistant Special

discount

Workshop

Flyer Advertise

ment

Developer/kontraktor kelas atas-

bawah

Material Worker Fee

Fixed cost

Sales

Buyer-supplier

relationships


213

Table 4. Ten Types of Innovation of UD. X

As seen in above table, UD X needs to focus on 4 out of 10 available innovation. 2 of them are

in customer experience. As such, UD X needs to develop a Customer Experience Shift, which is

innovation focused on customer relations. This needs to be done in order to develop a new

strategic canvas, with elements previously not applied by the company.

CONCLUSIONS

This research succesfully showed us that UD. X really need some improvement in order to

increase their sales or revenue, and through this study, we can notice that there are several tools

to analyze the UD. X current problem and issues. According to the Ten Types of Innovation,

which is the final tools to analyze what kind of improvement that should be implemented, UD.

X needs to be more focused on the customer experience segments such as improve service level,

loyalty program and more branding. This study also can be used as a reference or guidane to

whom face this kind of situation as UD. X faced.

REFERENCES

Azwar, S. (1986). Reliabilitas dan Validitas: Interpretasi dan Komputasi. Yogyakarta: Liberty.

Dajan, Anto. (1986). Pengantar Metode Statistik II. Jakarta: LP3ES.

J, Supranto. (2001). Statistik Teori dan Aplikasi, Cetakan Kedua. Jakarta: Erlangga.

Keeley, Larry. (2013). Ten Types of Innovation: The Dicipline of Building Breakthrough. New

Jersey: Wiley

Kim, W. Chan and Renee Maubrogne. (2006). Harvard Business Review. Cambridge: Harvard

Magazine.

Kotler, Philip and Kevin Lane Keller. (2012). Marketing Management 13. New Jersey:

Pearson Prentice Hall, Inc.

Profit Model

Network

Structure

Process *Process

Standardization

Product

Performance

*Superior Product

*Safety

Product System

Service *Superior Service

*Loyalty Program

Channel

Brand *Brand Extension

Customer

Engagement


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Osterwalder, Alexander and Yves, Pigneur. (2010). Business Model Generation: A Handbook

for Visionaries, Game Changers, and Challengers. New Jersey: Wiley

Permana, Dian Jingga. (2013). Analisis Peluang Bisnis Media Cetak Melalui Pendekatan Bisnis

Model Kanvas Untuk Menentukan Strategi Bisnis Baru, Faktor Excata, 6 (4), pp. 309

– 319.

Sugiyono. (2010). Metode Penelitian Kualitatif Kuantitatif & RND. Bandung: Alfabeta.

Suharti. (2015). Penerapan Business Model Canvas pada perumahan Galaxy Regency Malang

PT. Saran Hijrah Kamulyan, Jurnal Teknik Industri, I (1), pp 215 – 230.

Tjitradi, Elizaeth Cindy. (2015). Evaluasi dan Perancangan Model Bisnis berdasarka Business

Model Canvas, Agora, 3 (1), pp. 8 – 16.


215

BENEFIT COST RATIO ANALYSIS OF SUKOREJO – BATU PASS

ROAD PROJECT

1Darwin Simangunsong, 2Bambang Syairudin

1Magister Program Student, Magister Management of Technology, Project Management,

Sepuluh Nopember Institute of Technology at Surabaya, Indonesia; 2Department of Industrial Engineering, Industrial Technology Faculty, Sepuluh Nopember

Institute of Technology at Surabaya, Indonesia

ABSTRACT

Sukorejo - Batu Road is one of the efforts of local government of East Java

Province, to build new road access network that will have a big impact on

community activities and beneficial to the development of economy,

tourism, regional development, industry, services and agriculture

especially in Malang, Batu City as well as the surrounding area which will

generally have an impact for East Java Province.

Road construction, which requires a relatively large cost, will have an

impact on spatial structure and regional development in general. The

greater the amount of funds needed in the investment, the more important it

is to develop an analysis of the benefits of the project with the aim of

avoiding too much investment increment for unprofitable activities. One of

the analytical methods used to determine the feasibility of a proposed

project is the method of Benefit Cost Ratio (B/C Ratio).

This study aims to analyze the benefits of the Sukorejo - Batu toll road

development project using the Benefit Cost Ratio (B / C Ratio) Method,

taking into account the components of the cost, the job cost component

(construction cost and land acquisition), and the components of the traffic

accident cost. Benefit-Cost Ratio (B/C Ratio) is a comparison between

benefits / benefits that have been present-value with the cost that has been

in-present value.

From this research, it is found that the selected project is worth Rp

1,296,050,611,000 where the total intangible benefits and intangible

benefits are Rp 8,281,018,856,509 while the value of benefit cost ratio is

6.4 which means that the construction of Sukorejo - Batu is worth it,

because its value is more than 1.

Keywords : project, benefit cost ratio, present value, effect

INTRODUCTION

Sukorejo - Batu Road is one of the efforts of East Java provincial government to build new road

access network which has a big impact on community activity and beneficial for economic

development, tourism, regional development, industry, services and agriculture in Malang, Kota

Batu and the surrounding area and in general in East Java (Bina Marga Service of East Java

Provinces, 2012). The development of the road will affect the spatial structure and regional

development in general. The objectives of this research are to predict the impact of increasing

Sukorejo - Batu road to economic benefits and trade activities for producers, traders and

consumers for agricultural commodities, fisheries, small businesses, handicrafts and industries.


216

In addition, Sukorejo - Batu passenger road will shorten the travel route so that there are savings

on travel expenses, increased local revenue, especially the potential increase in land and

building tax (PBB).

The Sukorejo - Batu development project has a significant investment value and is planned to be

funded by the regional budget, where land acquisition uses the district / city revenue budget and

the cost of construction and maintenance will be financed by the regional income budget of East

Java Province. Some emerging alternatives are related to financial analysis using an economic

engineering approach that will produce several alternatives where the best alternative is selected

by judging on certain criteria.

LITERATURE REVIEW

Existing Condition of Sukorejo and Batu Road

Sukorejo is Pasuruan Regency whereas Batu is a municipality of Batu. To go to Batu from the

direction of Sukorejo or vice versa required distance of approximately 56 Km with normal

travel time 1,5 hours. But if the trip is done during the holiday season or at the time of departure

and work hours home from work it can take 3 hours more. Traffic for Sukorejo Road - Simpang

Tiga Karanglo is relatively diverse and dense every day, while the traffic for Simpang Tiga

Karanglo - Batu is diverse and less crowded. On holidays the number of vehicles that travel on

these three road segments, and tend become very crowded and jammed, so need to be addressed.

Figure 1. Existing Condition of Sukorejo and Batu Road (www.petajatim.jatim.co.id)

Impact of Pass Road Sukorejo Batu Project

Direct Impact

The development of Sukorejo - Batu as a strategic mega project is the most appropriate solution

to overcome traffic jam in Surabaya - Malang - Batu vital lane. Ease of access will be able to

move the economic activities of agriculture, tourism, and services. So that can synergize the

development of East Java region with rapid growth. The objectives of regional governments to

promote and stimulate economic activity will be realized. The rapid growth and development in

East Java which has a lot of agricultural potential, manufacturing and service industries,

tourism, mining, marine and so on will make East Java economic actors make the area the main

target market, especially the marketing of agricultural products from Batu City region which is a

necessary commodity Community of East Java.

Indirect Impact

Construction of Sukorejo - Batu access road - This stone will provide easy access for economic

actors or farmer groups to market agricultural products. Indirectly will make the economy of


217

East Java in general and Malang, Surabaya and Batu in particular squirm, economic centers

with agricultural commodities and agro industry will be more enthusiastic and alive because

East Java is a potential market and easy to reach. Subjects that indirectly have a positive impact

are farmer groups and industrial business actors. Increase the stretching of community activities

which then impact on increasing income and community productivity. Activity structure will be

more solid, because of the ease of access between East Java Province. The output is the

improvement of people's quality of life as an estuary of income increase (Tourism Department

of East Java Province, 2015).

Benefit Cost Ratio (BCR)

BCA is the most common technique for calculating costs and benefits of a project. Basically,

the cost-benefit measurement and analysis method is based on management's way and

perspective in assessing project performance implemented (Indrajit, 2010).

……………. (1)

There are several criteria of BCR value associated with the above formulation, namely; First if

the BCR index value is greater than 1 (BCR> 1) then the project is said to be feasible to work,

second if the BCR index value <1 (BCR <1) then the project is not feasible to work considering

the cost is greater than the benefit Benefit) received. While the components of BCR, among

others, as follows:

1. Procurement Cost. Procurement costs are all costs incurred in relation to project

procurement. Among them are the cost of project material procurement consultation,

purchase cost or leasing of machinery and project support tools, project installation cost,

capital cost for procurement and project work, and expenses related to management and

staff for project work.

2. Start Up Cost. Is an operational cost that is all costs incurred in an effort to make the

project ready for operation. These costs include purchase costs, networking,

reorganization, management and personnel.

3. Project Related Cost. Is a cost associated with the cost of system development and its

application. Project costs include documentation costs, meeting fees, system cost

analysis, managerial and personnel.

4. Ongoing Cost. Is the operating cost of the system for the system to operate properly.

Including maintenance cost system. Costs that include ongoing costs include personnel

costs, overhead costs (telephone, electricity, etc.), project maintenance, managerial

costs in system operations. These costs occur routinely over the operational life of the

system.

Some of the tangible benefits gained from the construction of Sukorejo - Batu passage are:

1. Reduction of Vehicle Operating Cost (BOK)

a. Fuel consumption. The cost of fuel consumption is determined by calculating the

fuel used (liter / 1.000 Km) multiplied by the price of each liter.

Y = 0,05693 S2

– 6,42593 S + 269,18567 ...... (2)

b. Oil / lubricant usage. The use of oil / lubricant oil for the type of passenger car

according to the following equation:

Y = 0,00037 S2

– 0,04070 S + 2,20403 ........... (3)

c. Use of tires. The use of tires for the type of passenger car according to the

following equation:

Y = 0,0008848 S - 0,004533 ................... (4)

d. Cost of vehicle maintenance. The cost of vehicle maintenance consists of the cost

of parts and mechanics, according to the following equation:

(1) Spare parts


218

Y = 0,0000064 S + 0,0005567 ..................... (5)

(2) Vehicle Depreciation Cost

Y = 1 / (2,50 S + 125 ) .................................... (6)

(3) Assurance

Y = 38 / (500 S)...................................... (2.8)

(4) Capital Interest

Y = 150 / 500 S ...................................... (2.9)

2. Reduced Fee Charges

The delay is the time lost by being influenced by an element that can not be controlled by

the rider either within the traffic flow itself or from other traffic flows (Pignataro, 2003).

3. Accidents

Technically traffic accidents are defined as incidental events caused by many

unintentional factors (random multy factor events).

RESEARCH METHODS

In this study there are several stages of the methodology that will be described as follows:

1. Data Collection

a. Field Research. In this field research, interviews and questionnaires were conducted

on the concept of the Sukorejo - Batu project implementation of the Year 2017

implementation.

b. Library Research. Done by looking for references in journals, books, and previous

research on project management, ratios and financial aspects.

Figure 2. Research Methodology


219

2. Data Analysis Method

f. Conducting quantitative and qualitative analysis of project feasibility using capital

budgeting and sensitivity analysis method

g. Perform cost of capital calculation

h. Analyze the project based on benefit cost ratio method

3. Benefit Cost Ratio Analysis

Benefit-Cost Ratio (B / C Ratio) is a comparison between present-value benefits with

present-value costs. The larger the B / C Ratio, the greater the comparison between

benefit and cost, which means the project is relatively more profitable. A project will be

selected if B / C Ratio> 1, if B / C Ratio <1 then the project proposal will be rejected.

4. Stage of Withdrawal Conclusion and Suggestion

Conclusions are drawn to the results obtained that are tailored to the objectives of this

study. Furthermore, they try to give suggestions on the application of research results as

well as efforts to avoid project failures.

Result and Discussion

Alternate Route

1. Route Alternate 1

This route is through Desa Karangsono (Kecamatan Sukorejo), Desa Sumbersuko – Desa

Pager – Desa Sekarmojo – Desa Tejowangi (Kecamatan Purwosari), Desa Capang – Desa

Gajahrejo – Desa Parerejo – Desa Sentul (Kecamatan Purwodadi, Kabupaten Pasuruan),

Desa Turirejo – Desa Wonorejo – Desa Ketindan – Kelurahan Kalirejo – Desa Bedali

(Kecamatan Lawang), Desa Toyomarto – Desa Gunungrejo – Desa Klampok – Desa

Langlang (Kecamatan Singosari), Desa Girimoyo - Desa Ngenep – Desa Bocek – Desa

Donowarih – Desa Tawangargo (Kecamatan Karangploso, Kabupaten Malang), Desa

Giripurno (Kecamatan Bumiaji, Kota Batu).


This route is through Desa Karangsono (Kecamatan Sukorejo) - Desa Pager - Desa

Sekarmojo - Desa Tejowangi (Kecamatan Purwosari), Desa Capang - Desa Gajahrejo -

Desa Parerejo - Desa Sentul (Kecamatan Purwodadi, Kabupaten Pasuruan) - Desa Turirejo

- Desa Ketindan - Desa Bedali (Kecamatan Lawang), Desa Toyomarto - Desa Klampok -

Desa Langlang (Kecamatan Singosari), Desa Ngenep - Desa Bocek - Desa Tawangargo

(Kecamatan Karangploso, Kabupaten Malang) - Desa Giripurno (Kecamatan Bumiaji,

Kota Batu).


This route is through Desa Karangsono (Kecamatan Sukorejo) - Desa Pager - Desa

Sekarmojo - Desa Tejowangi (Kecamatan Purwosari), Desa Capang - Desa Gajahrejo -

Desa Parerejo - Desa Sentul (Kecamatan Purwodadi, Kabupaten Pasuruan) - Desa Turirejo

- Desa Ketindan - Desa Bedali (Kecamatan Lawang), Desa Toyomarto - Desa Klampok -

Desa Langlang (Kecamatan Singosari), Desa Ngenep - Desa Bocek - Desa Tawangargo

(Kecamatan Karangploso, Kabupaten Malang) - Desa Giripurno dan Desa Pandanrejo

(Kecamatan Bumiaji, Kota Batu).


220

Table 1. Description Alternative Route 1 of Pass Road Sukorejo – Batu (Mono Heksa,

2017)

Tabel 2. Description Alternative Route 2 of Pass Road Sukorejo – Batu (Mono Heksa,

2017)


221

Tabel 3. Description Alternative Route 3 of Pass Road Sukorejo – Batu (Mono Heksa,

2017)

Cost of Road Works Tembus Sukorejo – Batu

Table 4 Costs of Land Acquisition, Construction and Maintenance of Pass Road Sukorejo

- Batu for 2 Line Alternating 1


222

Table 5 Costs of Land Acquisition, Construction and Maintenance of Pass Road Sukorejo


Table 6. Costs of Land Acquisition, Construction and Maintenance of Pass Road Sukorejo



223






224



Benefit of Pass Road Sukorejo – Batu Project

Table 10. Tangible Benefit of Pass Road Sukorejo – Batu Project


225

Table 11. Intangible Benefit of Pass Road Sukorejo – Batu Project

BCR Analysis

Table 12. Benefit Cost Ratio Calculate of Pass Road Sukorejo – Batu Project 2 Line

Alternating 1


226


Alternating 2


Alternating 3


227


Alternating 1


Alternating 2


228


Alternating 3

From the above calculation it can be seen that the value of all benefit cost ratios on 6

alternativef is with the average value of BCR is the largest for the construction project of

Sukorejo - Batu with 2 lanes alternative 3 which has an average of 6.97 where the value of ratio

1 is obtained After the useful life of the road is used for 15 years, which is also the fastest time

of benefit associated with the ratio of BCR to a value of more than 1. This means that the

construction of the Sukorejo - Batu passage with 2 alternative lanes 3 is feasible to choose on

These factors are beyond the geographic and demographic conditions.


This research can have an impact on decision making for managerial related to decision making

in Sukorejo - Batu road development with Benefit Cost Analysis Method. The highest

consideration of the BCR ratio allows the project to have maximum benefits in the future and

the most immediate beneficiary considerations after the project is completed.

CONCLUSION AND SUGGEST

CONCLUSION

1. Selection of Sukorejo road construction - This stone has three alternatives and the chosen

one is the third alternative because of consideration: no crossing with railway, shorter route

distance, shorter travel time and fewer bends or climbs. In addition, the cost required is less

than the two other projects amounting to Rp 1,296,050,611,000.

2. The total tangible benefits consisting of the benefits of operating vehicle operating expenses,

reduction of deferred costs and accident reduction amounted to Rp 7,743,313,602,563. While

intangible benefits consist of new business growth, APBD increase and human resource


229

performance improvement is Rp 537,705,253,946. So the total intangible manfat and

intangible benefits of Rp 8.281.018.856.509.

3. The Sukorejo - Batu Strip construction project with 2 alternative lanes 3 being the best

choice with the highest average BCR compared to other alternatives of 6.97 where the ratio

value 1 was obtained after the useful life of the road was used for 15 years, This is also the

fastest benefit time associated with the BCR ratio for values over 1.

SUGGESTION

2. This study only looks at cash flows on investments, while profit and loss posts are not

overly discussed. Investors should be more strict in seeing the profit and loss of this

project because it will determine dividends.

3. This research does not include risk analysis on Sukorejo - Batu road investment. Risk

analysis of this investment to see how big the effect of risk on investment decisions.

4. The Sukorejo – Batu Road Construction Project- This stone should be careful in

spending, the actual cost of the project should not exceed the RAB, and if there is an

urgent fee that requires the cash outflow beyond the post in the RAB, then it should be

adjusted to anticipate Cost over run, one example is the adjustment of design and

quality of Sukorejo - Batu passage.

LIMITATION

1. This research is still using cost benefit analysis for Sukorejo - Batu toll road project

development using 2 lane, in next research it is expected to do research with 4 lane.

2. This research does not analyze Payback Ratio and Break Event Point value nor value of

Internal Rate of Return (IRR), so in other research it is possible to enter the variable.

3. This study incorporates the intangible benefits of three aspects of new business growth,

an increase in APBD and an increase in HR performance so that in other studies it is

possible to examine other aspects beyond those aspects.

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Industri. Fakultas Teknologi Industri. Universitas Gadjah Mada. Yogyakarta


231

FAMILY BUSINESS VIEWED FROM COMPLEXITY FAMILY

AND BUSINESS AND HOW TO MANAGE TO ACHIEVE

SUSTAINABILITY

1Tina Melinda♠


INDONESIA


ABSTRACT

The myth that family firms can not survive through three generations, is

supported by many facts in different parts of the world, that the number of

companies that can last up to three generations is small. From the data

also mentions that family companies contribute greatly to the Gross

Domestic Product of a country. So very unfortunate if this family business

can not last long. The purpose of this study is to explain the family business

in terms of business complexity, family complexity and how to manage it in

companies that are still held directly by the founder / first generation.

Family business has its own uniqueness because it combines business,

family and ownership, resulting in various roles of the people involved

such as only family members or family members who act as employees and

family members who are also as shareholders. The different roles will

result in family complexity and business complexity. When it reaches third

generation family complexity occurs more complicated than if it occurs in

the first generation, because in the third generation then involved in the

business has been involved in the relationship cousins while in the first

generation involved only founder. Likewise the three companies become

larger then it will have a heavier complexity than at the beginning of the

stand. For that family company can still survive and sustainable it needs a

good way of managing, and for each character of the company as in the

newly established business is certainly different ways to manage it with a

long-standing company, but also companies that are still held directly by

Founder will be different way of managing it compared to companies that

have reached third generation. In the first generation of companies need to

pay attention to managing business by way of professional operation, pay

attention to succession and managed family complexity.

Key words: Family Business, Business Complexity, Family Complexity

INTRODUCTION

The contribution of a family company to a country's economic growth is undoubtedly because it

contributes 50% of GDP in the United States (Shanker and Astrachan 1996), while in Indonesia

90% of the existing firms are households contributing 80% of GDP of the country (World Bank,

2017). According to Groysberg (2014), family business that can survive one generation is only

70%, so it can be said that this family company is difficult to sustain. Ward's argument, 1987,



232

states that the critical condition is due to the transition of leadership from the first generation to

the next generation that did not go well.

The difference between family business and non family business is that of family business there

is family involvement in it (Collins and O'Regan (2011). It is also supported by Chua (2003), so

there is a difference of interests between family demand and business demand (Carlock, 2001).

While Tagiuri and Davis (1982) stated that the family business has a three-circle model that

explains that there is overlapping between family, ownership and business that will affect the

condition of family business.

Based on its characteristics family business can be categorized into five models (Gimeno,

2010), starting from the newly-called Captain model to the Corporate model where the family

business is big with the characteristic that is involved in managing not only the nuclear family

but also involving Professionals in the company's operations.

In this study aims to describe Family Business in terms of complexity family and complexity

business and how to manage Family Business in the first generation company.

Issue Family Business

The three-circle model of Tagiuri and Davis (1982) in Figure 1 states that the family business

model has three circles consisting of family, ownership and business, resulting in overlapping of

the three parts that will affect the condition of the family business.

Figure. 1 Three Cycle Model (Tagiuri and Davis (1982)

This overlapping condition has many consequences, meaning that the role of a person can be

distinguished into seven different conditions causing complicated governance (Mustakallio et

al., 2002), meaning someone who acts only as a family member or family member who also

doubles as an employee or Family member who doubles as employee and also owner.

Differences from internal stakeholders involving these intergenerational differences result in a

family of complesity (Gersick, 1997). The complexity of family business (Gemino, 2010) is

distinguished by three dimensions or axes, ie business axis, family axis and owner axis, each of

which axis has different phases and will determine family complexity and business complexity.

Family Complexity

Family axis phase (Gemino, 2010) categorizes business into 4 categories: young business

family, entering the business, working together and passing the baton, whereas according to

(Churchill and Hatten, 1987) differentiate into owned-managed business, Founders, then at the

stage of training and development of the generation means starting to involve the second

generation into the business, in the partnership between the generation has involved wider

cousins and families, and the transfer of power stage means that the founder must start ready to

let go of leadership and divert on next generation. Every family business also has different life

cycles and each stage has different challenges. Companies that are still categorized as small

medium enterprises will have different challenges than those that have reached the corporate

scale (Cowling et al., 2015, Churchill and Lewis, 1983). This family axis phase discusses more


233

details about the life cycle of the family. Family Axis Phase differentiates the difficulty level of

young business family, entering the business, working together and passing the baton. The

stages in the young family are not too complicated because every decision to be taken does not

involve many parties because it involves only the founders alone compared to the conditions at

the time of passing the baton, which must involve between the first generation and the second

generation. This is related to family business life cycle.

This family axis phase will be associated with the Ownership Axis phase, as discussed tends to

family relations. Ownership Axis phase (Gemino, 2010) is divided into 3 conditions: controlling

owner, sibling partnership and cousin consortium. The condition of cousin consortium is more

difficult than when the company is only controlled by the owner, because with many people

involved it requires such good communication and interpersonal skills to maintain harmony of

the family and also the existence of different family backgrounds. Your relationship will be

related and affect the emotional, social and cognitive development of a brother (Dunn, 2002;

Karos et al., 2007; Pike et al., 2005), this is because the bond of brotherhood is a long-term

relationship. This brotherly relationship will also have an impact on social aspects such as

involving cooperation and conflict (Edwards et al., 2005, Punch, 2008)

Business Complexity

By using indicators such as business size, company location, diversification and business sector,

the business complexity of Axis phase is divided into 3 points; Start up, expansion-

formalization, and Maturity. Conditions at a company start up certainly has a different

complexity compared to companies that are doing expansion and mature.

The results of the study from Chua et al. (2012), suggests that large or small companies will also

cause variations in differences from family involvement such as social status and family

harmony. It is also triggered by business ownership that will affect corporate goals (Chrisman et

al., 2012; Jones et al., 2008). Small companies are usually easier to allocate resources than

larger companies (Chrisman et al., 2003; Kotlar, 2012).

Family business model

According to Gimeno (2010) based on complexity level and development structure, a family

company can be classified into 5 models: Captain Model, Model Emperor, Family Team Model,

Professional Family Model and Corporation Family Model

From the results of his research illustrates that Family business can be categorized into five

types based on family complexity, business complexity and structure development. For the

captain model is a family business that has the lowest level of complexity, business complexity

and development structure compared to other models, while the Corporation Model has the

highest complexity and development structure. This is explained because each model has

different characters. Table 1 shows the different characteristics of each model.

Table 1. Characteristic of Family Models

Family Business Model Characteristic

Captain Model SME managed by founder

Emperor Model Business and Families managed by leader

Family Team Model Extended family working in business

Professional Family Model Complex family governing a complex business

Corporation Model Family with varying complexities investing

together

Source: Gimeno (2010)


234

Management Family Business in the Captain Model

A company must be managed professionally as well as it should happen to the family business

that is in Captain Model, at this stage the company is still categorized in small medium

enterprise because usually new company stands and still under the leadership of the direct

founder so that when viewed from the family complexity can be said Is not there because only

the first generation that operates the company and he is also directly responsible for the

decisions taken. Family business with captain model also has a business complexity that is still

low because of the size of the business is still relatively small and usually also do not have many

branches or business lines, so it can be said that the level of business complexity is still low

compared with the already large companies. In the business family with the captain model

category, it is appropriate to the characteristics that are still managed directly by the founder

with a relatively small business scale, it is necessary to do some things (Gimeno, 2010), namely

(1) the company must be managed professionally, (2) Managing the succession process and (3)

managing well the family complexity

Professionalization of operation

Companies must be well managed to produce good performance, so also applies to family

business. In order for family business to survive and sustainably it is necessary to manage its

human resources well. This is related because family companies usually work is from family

members, it is necessary to note the competence, for family members who do not have the

knowledge, skill and attitude according to the required demands, it can be increased competence

by providing training (Gersick, et al., 1997).

In addition, the owners of the family company also need to establish the mission of the company

that should be described in the corporate strategy and planning as the mission is the foundation

for future plans (Harris et al., 1994). Based on the mission can be made a strategy in accordance

with the expectations of the owner, so the determination of the mission is the foundation for the

company (Leon-Guererro, 1998)

Succession Management

In the family enterprise, the critical condition that needs attention according to (Brockhaus,

2004) is on the succession process, supported by research from Beckhard and Dyer, 1983;

Which states that only 30% of family companies are successful in continuing to the second

generation. According to Sharma et al., 2001, succession is the process of shifting leadership

positions from one generation to the next. In this relay process it is necessary to have a good

plan for this succession process can run well.

Some factors that may hamper this process of succession are from the founders, such as

concerns about death, fear of loss of power, while the family is fear of loss of identity and

rivalry among brothers (Susanto, 2007), while opinions (Solomon et al., 2011 ) States that from

the incumbent there are four things to note are the conditions of marriage, the condition of the

child, the vision for pension and the position of the lifecycle of the individual. The obstacles of

this succession process are also triggered by concerns about the condition of future family

enterprises, as described by Sharma (2004) in Figure 1, that family business has conditions from

family dimensions and business dimensions, so that four parts are created, of course a founder

will want That the company will be in quadrant 1, namely the condition of high emotional and

high financial capital, because this is a condition where there is a harmonious family and the

company goes well.


235

Family Dimension

Positive Negative

Business

Dimension

Positive

I

Warm Hearts

Deep Pockets

High Emotional and

Financial Capital

II

Pain Hearts

Deep Pockets

High Financial and low

Emotional Capital

Negative

III

Warm Hearts

Empty Pockets

High Emotional but low

Financial Capital

IV

Pain Hearts

Empty Pockets

Low Financial and

Emotional Capital

Figure 1. Performance of Family firms (Sharma, 2004)

Preventing growth of Family complexity

The results of the study (Holland and Boulton, 1984), suggest that the relationship between

management and family will enhance the complexity of the organization. At the time the

company is still new and still small category then the business complexity is also still low level

compared with the company that has been big and long standing. For that in the family business

companies are still Captain Model category then the level komplesitasnya not as complicated

when it is at the position of the corporation model. In addition to the Captain model because the

company is still run by the founder then the level of family komplesitasnya also still low

compared to when it entered the third generation that involves not only the nuclear family but

already involving cousins in the management

CONCLUSION

Family business is a company that many established but few can survive beyond third

generation, it is because family business that have uniqueness because combine system family,

system business and system ownership. These three things will affect the family complexity and

business complexity. The newly established business and still managed by the direct founder

certainly has a lower family complexity than the business managed by the third genre. While the

new company / captain model certainly has a lower business complexity than the company that

has been long standing and growing like a corporation model.

To manage the business that is still managed directly by the founder, it requires more

professional management, because usually this business depends on the figure of the direct

owner. Another thing to note in order for the company to be sustainable is the process of

succession, because it involves the first generation and the second generation, the founder's

factor that can be a constraint such as worrying about death or fear of losing power, while from

the successor there are some things that It should be noted that the loss of identity or the

occurrence of rivalries between siblings. While the latter is to try to avoid family complesity by

managing the time well, because the main source of the Captain model is the founder,

everything is centered on the founder, so the founder must be aware that the future of the

company will move on to the next generation whose number of people involved more Many and

successors must be able to have the ability to deal with it.


236

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PROFIT PLANNING MODEL USING THE COST-VOLUME-

PROFIT ANALYSIS APPROACH

(CASE STUDY IN CV TRANSTREK INDONESIA BATU MALANG)

1Soffia Pudji Estiasih, 2Endang Prihatiningsih, 3Handri Kartiono

1-2Universitas WR. Supratman Surabaya

3Akademi Pariwisata dan Perhotelan Ganesha Malang

INDONESIA


ABSTRACT

CV. Transtrek Indonesia is a company engaged in human resources

development services especially Outwardboud Training. The company

realizes that there are potential markets for outwardboud activities which

can be targeted for business opportunity. This study aimed to help the

company management to design the sales and profit targets using cost-

volume-profit analysis for profit planning model.

This study is a qualitative study using case study and the data was collected

using direct observation, interview and document, especially referring to

Cost-Volume-Profit Analysis of the 2015. The results indicated that in order

to determine profit planning, company was able to perform Cost-Volume-

Profit analysis by simulating the sales level related to the price changes,

sales volumes, variable cost, as well as fixed cost to obtain target profit.

Keywords: Profit Planning Model, Cost-Volume-Profit Analysis Approach

INTRODUCTION

Nowadays the activities in the service sector in Human Resource Development, especially in

Outwardboud Training showed a lot of improvement. Outwardboud Traning is actually a series

of activities that can be useful to form individual characters through the training for the

corporate employees and other enthusiasts. Outwardboud becomes one of the interesting

products seriously considered in the service business. Each business certainly has own

advantages in triggering the competition. Competition and price are the factors of competitions.

With the variation of price offered, the companies pay less attention to the optimal profit. The

company concerned only the income without considering to expenditures, due to the poor plan.

Planning is one important factor in carrying out all the activities of the company. Hence,

company planning will be able to facilitate management tasks to achieve goals to determine the

profit. Obtaining optimal profit, management should be able to make various efforts, including:

determining sales price, increasing sales volume and efficiencing costs. These steps cannot be

separately taken because of the close relationship of costs, sales volume and sales price. The

sales price possibly affects the sales volume, where it will affect the production volume (cost)

which is resulted in the profit.

According to Verawati (2004) CVP analysis indicated the profitable or unprofitable sales extent

as well as became an important part in profit planning, as it is used to assist managers in

designing profit planning calculations and sales budgets accurately. Patni (2015) argued that

CVP analysis was an analysis of cost evolution models pointing out the relation of cost,


239

production volume and profit as well as a foresight of managerial control. The method includes

a set of problem solving based on understanding the characteristics of the company costs

evolution models.

CVP analysis has several advantages, as providing a variety of useful information to analyze the

factors affecting the expected profit planning (Hartanto, 2004). Profit planning is a target profit

considered to the expected sales and costs the following year in the long periods (Pelawiten,

2014). Kirlioglu and Baral (2012) stated that proper profit planning, correctly decided, depends

on realistic costs. Koraag and Ilat (2016) argued that CVP analysis helps to understand the

mutual relation of cost, sales volume, and profit. By conducting CVP analysis, management

possibly obtain the minimum level of sales information in order to avoid the loss.

CV. Transtrek Indonesia is a company engaged in human resources development services

especially in Outwardboud Training, the company viwed the big potential market for

outwardboud activities. Outwardboud Training organized by CV. Transtek Indonesia is divided

into various programs, namely: Outwardboud Team Building, Outwardboud & Rafting,

Outwardboud Team Building + Rafting and OB Team Building Program + Rafting + War Game

and Tailor made Program.

In order to obtain target profit, the company is focused on the results and not considered to the

operational loads which are impacted on the profit obtained, so management had difficulty in

formulating policies related to sales and profit planning. The problem of the study was whether

the conventional approach using cost-volume-profit analysis was an appropriate model for profit

planning. The study aimed to help the company's management to design the level of sales and

target profit using cost-volume-profit analysis model.

LITERATURE REVIEW

Profit Planning

Profit planning is the foresight to decide the action that should be done in order to achieve

certain goals (Hansen & Mowen, 2005). According to William and Usry (2006) profit planning

was accurate calculated work plan where the financial implications were expressed in form of

projected income, balance, cash and work for the long and short terms. This aspect is related to

the plan in sales of various loads thoroughly and the plan will be developed in detail and

integrated into a comprehensive entity.

A profit planning is possibly to be obtained when the management successfully runs the

company as measured by the total profit. Therefore, the profit planning is a management plan

covering all operation phases in the future to achieve company goals divided into short and long

term plans. Profit planning is useful as a guideline in running the company's operational

activities, although the preparation is difficult because of influence of the factors out of

management control which is difficult to predict, including the changes of consumer behavior,

information technology, social behavior, competitor strength, demography and politics.

According to Carter & Usry (2009), profit planning is useful for (1) providing disciplined

approach to identify and resolve problems, (2) providing direction at all levels of management,

(3) improving coordination, (4) acquiring ideas and cooperation of all levels of management,

and (5) evaluating actual performance as well as improving capabilities of each individual

related to efficient work planning.

Target Profit Procedure

According to Tunggal (2014), there are three target profit procedures applied in company

management:

a. A priori

b. A posteriori

c. Prematic


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Cost-Volume-Profit Analysis

The cost-volume-profit analysis (CVP) analysis is a useful to design the profit planning and

decision making, since it emphasizes the cost linking, quantity sold, and price (Hansen &

Mowen, 2005). The CVP analysis is a common instrument used to provide information for

management to decide the policy, for examples setting the sales prices, selecting mixed sales,

and analyzing changes of variable cost and fixed cost to company's profitability Simamora,

2002).

Sipayung (2008) argued that cost-volume-profit analysis is a very useful to help management

carrying out its functions, as well as to help understanding the relationship among cost, volume,

and profit organization by focusing the relationship of 5 elements of product price, sales volume

or activity level, variable costs, total fixed costs, and product mixed sales. In decision-making

related to profit planning using cost-volume-profit analysis, the cost is classified according to

the behavior of fixed costs, variable costs and semi-variable costs. In order to make acurate

decision-making, the semi-variable cost should be separated into fixed costs and variable costs

(Satriani et al., 2015).

CVP Analysis Concept

Several concepts in cost-volume-profit (CVP) analysis related to profit planning are described

as:

a. Contribution Margin

Contribution margin is the balance of sales substracted variable cost which is used to

cover all fixed costs and becomes the profit (Garrisson et al., 2008).

Contribution margin (IDR) = Sales – Variable costs

b. Breakeven Point

Breakeven point is sales level where the profit is zero (Garrisson et al., 2008),

formulated as:

c. Target Profit Analysis

Target profit analysis is used to determine the amount of minimum sales that should be

obtained to determine the targeted profit, formulated as:

Sales (unit) = (fixed cost + Target profit)/Contribution Margin per unit, or;

Sales (IDR) = (fixed cost + Target profit)/Contribution Margin Ratio (Garrisson et al.,

2008).

d. Margin of Safety

Margin of safety is difference between sales planning and breakeven, formulated as:

Margin of safety = sales – breakeven point (Simamora, 2002)

e. Leverage Operation

According to Samryn (2012) leverage operation is used to understanding how the profit

changes, if there is sales increase or sales decrease, formulated as:


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CVP Asumption

Assumptions in CVP analysis according to Hansen & Mowen (2005) are:

a. The analysis assumes the function of linear incomes and costs.

b. The analysis assumes that price, total fixed costs, and variable costs per unit are

identified accurately and constantly along with the range of relevant.

c. The analysis assumes that what is produced can be sold.

d. In multi-product analysis, the mixed sales presumably known.

e. Sales price and costare are presumably determined.

Whether the assumptions which underlie the CVP analysis according to Simamora (2002) are:

are sorted into variable and fixed variable elements. The function of the total costs is

linear in the relevant range of normal business activities.

the income is linear in the relevant range; sales price per unit is

considered constant in the range of production volume. The income changed is linear

to the change in product unit sales; and the average sales price per product unit is

constant.

duct anaysis or the various product mixed sales analysis is constant in the

relevant range. If the product has different sales prices and costs, the changes in

mixed sales will affect the results of cost-volume-profit analysis.

ver: product unit volume or sales (IDR).

the period are same, It implies that the unit numbers produced during the period are

equal to the units sold.

CVP Main Element

According to Samryn (2012), the main elements in cost-volume-profit are:

a. Product sale price

b. Sales volume or activity level

c. Variable costs per unit

d. Total fixed costs

e. Composition and product combination are sold

Relation between Profit Planning and CVP Analysis

Cost-volume-profit (CVP) analysis is managerial planning equipment which provides

information to the manager relating to operational level, costs, income level through breakeven

point of profit planning. These challenges require management to maximize one of its roles,

namely sales planning and profit planning (Two et al, 2015). Practically, the challenge faced by

most corporate managers is how to assess and to control the key variables in order to determine

the company performance from profit planning. The study conducted by Kipesha (2016)

showed that the company initially experienced some failures, but it was able to improve the

performance related to sales volume, cost control and profit planning using cost-volume-profit

model. Challenges often faced by small firms are managers unable to judge and control the

company and lack of financial statement knowledge needed to perform cost-volume-profit

analysis. A manager should be able to assess and control the key variables of company

performance. According to Carter & Usry (2009) preparing a profit plan related to the use of

cost-volume-profit model, management should be able to understand and to combine all factors


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affecting the profit level. One of the concepts used to arrange the profit planning is Cost-

volume-profit analysis.

Thinking Framework

Figure 1.Thinking Framework

RESEARCH METHODS

This study was qualitative study using case study approach which was study using problem

characteristics with the current situation and the environment interaction as the background

(Indriantoro dan Supomo, 2013). The subject of the study was CV. Transtrek Indonesia, Batu

Malang. Data collection technique was literary study using observation, interviews, and

documents which were related to the cost-volume-profit analysis in 2015.


Volume and Total Sales

The volume dan total sales of CV. Transtrek Indonesia in 2015 for Outwardboud Team Building

+ Rafting+WarGame activites were seen in table 1

Table 1. Total Sales

No Outwardboud Activities Volume Selling Price

(IDR)

Total Sales

(IDR)

1 O.TeamBuilding+Rafting+War Game 32 990,000.00/team 31,680,000.00

2 O.Team Building + Rafting 100 950,000.00/team 95,000,000.00



5 O.Team Building + Rafting 40 400,000.00/orang 16,000,000.00

6 Rafting 96 200,000.00/orang 19,200,000.00

Total 294,780,000.00

Cost Classification

Cost classification is performed based on cost behaviors which are fixed cost and variable cost.

The cost classification data was seen in table 2.

Conventional approach using Cost-

Volume-Profit Analysis

Methods:

Contribution Margin

Breakeven point analysis

Margin of Safety

Target profit analysis

Profit planning


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Table 2. Cost Classification

Accounts Variable Cost

(IDR)

Fixed Cost

(IDR)

Note

1. Electricity, water, and

telephone cost

6.035.300 420.000 Fixed Expenses

2. Salary 47.150.000

3. Administration and others 14.285.700

4. Transportion 1.070.000 Tol and parking of

OTBR

5. Rent Car 12.000.000

6. Depreciation of fixed assets 4.000.000 Equipment

Depreciation

7. Fuels 8.585.000 OTBR activities

8. Human Resource Development 15.000.000 Hiring Experts

9. Marketing Cost 7.250.000 Advertisement,

Brochures

10. Training Equipment 39.325.000 Indoor & outdoor

equipment

11. Trainer Fees 30.100.000 Trainers and instructors

12. Freelance Marketer 12.950.000 Salesmen fees

13. Task Force Fee 24.300.000 Fasilitator

14. Training Administration Fee 40.870.000 Hotel and meal for

trainees

15. Other expenses 1.961.000

Total 172.446.300 92.855.700

Contribution Margin

Contribution Margin is the balance of sales substracted variable cost which is used to cover all

fixed costs and becomes the profit (Garrisson et al., 2008).

Contribution margin (IDR) = Sales – Variable cost

Table 3. Contribution Margin

Note Total

(IDR)

Percentage

(%)

Selling 294,478,000.00 100

Variable Cost (172,446,300.00) (58.5)

Contribution Margin 122,333,700.00 41.5

Fixed cost (92,855,700.00)

Net profit 29,478,000.00

After calculating the contribution margin, the income statement was prepared using contribution

margin form as seen in table 3. It showed 41.5% meaning the company was able to cover all

fixed costs. The bigger the contribution margin is, the more possibilities company covers the

fixed cost to obtain profit.

Breakeven Point Analysis

Breakeven point is the sales where the profit is zero (Garrisson et al., 2008) formulated as:


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223,748,675.00

It means that the breakeven sales were 223,748,675.00, so CV.Transtrek Indonesia was able to

cover all fixed and variable loads which made the company’s sales limit was categorized as

even (no profit, yet no loss, obtain the breakeven point).

Margin of Safety

Margin of safety is the difference between sales planning and breakeven sales determined using

the formula as:

Margin of safety = sales planning – break event sales (Simamora, 2002)

Margin of Safety = 294,780,000.00 – 223,748,675.00 = 71,031,325.00 IDR

Meaning that CV.Transtrek Indonesia should be able to maintain the sales in order to keep it

above 24.09% margin of Safety ratio, so the company obtained the breakeven point.

Target Profit Analysis

Target profit was used to determine the targeted minimum sales in obtain the profit using the

formula:

Sales (unit) = (Fixed cost + Target profit)/Contribution Margin per unit, or:

Sales (IDR) = (Fixed cost + Target profit)/Contribution Margin Ratio (Garrisson et al.,

2008).

Based on cost classification, contribution margin, breakeven point analysis, and margin ratio,

the target profit analysis can be alternatively determined from:

a. If CV. Transtrek Indonesia expected to increase the target profit as 15% from sales

assumed that fixed cost, variable cost, and sales were not changed, so the targeted

minimum sales obtained was:

Sales = 330,295,662.65 IDR

b. If the fixed cost increased as 5% assumed that the variable cost, target profit, sales

volume, and sales price were not changed, so the targeted minimum sales obtained

was:


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Sales = 305,967,433.73 IDR

c. If the sales volume increased as 5%, target profit increased as 11.68% from starting

sales and variable cost increased as 5%, with the assumption the fixed cost and sales

price were not changed, so the minimum targeted sales obtained was:

Sales = 308,385,174.42 IDR

From the various assumptions and simulations related to profit planning, company management

is able to select the best alternative action to obtain the biggest profit. Cost-Volume-Profit

Analysis is not only able to figure the profit planning considering the changes of factors

affecting target profit but it is also used as reference in sales planning at targeted profit.

CONCLUSION A ND SUGGESTION

In conclusion, the management of CV. Transtrek Indonesia did not have budget and did not

clasify the costs based on cost behavior. The result of contribution margin showed 41.5%

meaning the company was able to cover fixed costs in order to obtain the profit. Breakeven

Point Analysis showed the sales of 223,748,675.00 IDR meaning the management was able to

cover all fixed and variable loads, so the sale limits can be said as no profit, yet no loss

(breakeven point). The result of security margin showed 24.09% meaning the management in

making sales should not lower 24.09% from the budgeted sales in order the company to obtain

the breakeven point. According to results of target profit analysis, the company was able to

determine the minimum level of sales achieved related to the changes of target profit as 15% of

sales price, 5% of fixed cost, and 5% of sales volume, as well as 5% of variable cost 5%.

Based on the conclusion, the study suggests that the management of CV. Transtrek Indonesia

should classify the costs according to the cost behavior in order to apply cost-volume-profit

analysis as the basis of sales and profit planning using contribution margin, breakeven analysis,

security margin, and target profit analysis.

REFERENCES

Carter, W.K. and Milton F. Usry. 2009. Cost Accounting, 14th edition. Soutth-Western Cengage

Learning

Dua, M. D, Sri Mangesti Rahayu and Zahroh ZA, 2015, Penerapan Cost-Volume-Profit

Analysis Sebagai Dasar Perencanaan Penjualan pada Tingkat Laba Yang Diharapkan,

Jurnal Administrasi Bisnis (JAB) Vol.27 No.1, Oktober 2015

Garrisson, R.H., E., W. Noreen and P.C.Brewer. 2008. Managerial Accounting, McGraw-Hill

Irwin.

Hartanto, Albert. 2004. Analisis Biaya-Volume-Laba sebagai Alat Perencanaan Laba,

Universitas Katholik, Semarang.

Hansen D.R. and M.M. Mowen. 2005. Management Accounting, 7 th edition, South-Western

Cengagen Learning

Indriantoro, Nur and Bambang Supomo. 2013. Metodologi Penelitian Bisnis: Untuk Akuntansi

dan Manajemen, Yogyakarta, BPFE.


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Koraag, Jeriko Falentino and Ventje Ilat. 2016. Analisis Cost-Volume-Profit untuk Perencanaan

Laba. Jurnal Berkala Ilmiah Efisiensi, Volume 16, No.03 tahun 2016, Manado.

Kirlioglu Hilmi, and Gokhan Baral. 2012. In the Uncertainty Conditions Cost-Volume-Profit

Analysis which is Used Fuzzy Logic. 3rd Ed. International Symposium on Sustainable

Development Sarajevo, pg 156-166.

Kipesha , Erasmus, Fabian. 2016. Fincare LTD: Cost, Volume and Profit Analysis, Case Studies

Journal ISSN (2305-509X) – Volume 5, Issue 4–April-2016,

www.casestudiesjournal.com. Accessed on 17 March 2017

Pelawiten, Atika. 2014. Analisis Cost-Volume-Profit untuk Perencanaan Laba pada UD Gladys

Bakery. Jurnal EMBA ISSN 2303-1174 Vol.2 No.2, Manado.

Patni, Ms. Indu. 2015. Use of The Cost/Volume/Profit Analysis in Term of Earning, IJTEMT,

EISSN: 2321-5518; Vol.IV, Issue III, June 2015, www.ijtemj.org. Accessed on 27

December 2016.

Sipayung, M. Friska. 2008. Analisis Cost-Volume-Profit Sebagai Alat Perencanaan Laba Pada

PT. Ecogreen Oleochemicals, Medan, Universitas Sumatera Utara, Medan.

Satriani Saparida, Marheni and Lona Miranda. 2015. Jurnal Ilmiah Akuntansi Bisnis &

Keuangan (JIABK), Volume 3, Issue 2, November 2015, Pangkal Pinang

Simamora, Henry. 2002. Akuntansi Manajemen, Jakarta, Penerbit Salemba Empat.

Samryn L.M. 2012. Akuntansi Manajemen, Edisi Revisi, Jakarta, Penerbit Kencana

Prenadamedia Group.

Tunggal, Amin Widjaya. 2014. Akuntansi Biaya, Edisi Revisi, Jakarta, Harvarindo.

Verawati, Eti. 2004. Penerapan Metode Cost-Volume-Profit sebagai Alat Bantu Analisis

Perencanaan Laba pada UKM Visito Brownis, Universitas Dian Nuswantoro, Semarang.

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http://www.ijtemj.org/


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INFORMATION TECHNOLOGY TO DEVELOP AND

IMPROVING SALES PRODUCT ON MIDDLE LOW BUSINESS

AT SERUNI SIDOARJO

1Suparjo, 2Gatot Setyono

Institut Teknologi Adhi Tama Surabaya

INDONESIA


ABSTRACT

Information technology is an important part in social life.Society can feel

benefits of information directly to ackonowledge world development,

including in shoes business. Location of Shoe Village at Seruni Sidoarjo is

a home industry of shoe. As shoe industry village, this area has potential to

develop into centre of shoe industry which someday becoming the icon of

Sidoarjo. When tourist goes to Sidoarjo they will visit the village to buy

features shoe of Sidoarjo. Production and sales conducting recently are

still individually and traditional. This research wants to develop marketing

strategy with Seruni Small Business Society (UKM) for shoes using

analysis SWOT method by utilizing information technology. The purpose is

to improving sales of UKM using information technology so that hopefully

UKM will grow and more develop.

Keyword : website, Marketing, UKM,.

INTRODUCTION Micro Business referred to Finance Ministerial Decision No.40/KMK.06/2003 dated January 29

2003, is productive business owned by family or Indonesian Citizen Individual and have sales

revenue maximal Rp 100.000.000,00 (one hundred millions rupiah) each year. According to UU

No. 20/2008, Small Business is a productive economical effort which is independent, conducted

by individual person or business entity which is not a subsidiary nor corporate branch which is

owned, controlled or be part directly or indirectly by medium or big company. Medium business

is an independent productive economic effort, conducted by individual person or business entity

which is not either a subsidiary nor corporate branch which is owned, controlled, become part

directly or indirectly by Small Business or Big Company with its total net assets or total annual

sales.

Reasearch location UKM GAGO at Seruni Sidoarjo shoes village which is a shoe production

home industry. As shoe production village, this area has potential to develop to become center

of shoe production which will be the icon of Sidoarjo. So tourist can come to Sidoarjo and visit

this village to buy signature shoes from Sidoarjo.


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Table 1. Comparison of Sales data on Shoes UKM at Seruni Sidoarjo village in the last 5

years.

UKM NAME Year

2012 2013 2014 2015 2016

UD GAGO 72.000.000 60.000.000 65.000.000 62.000.000 79.000.000

UD LAZER 70.300.000 82.000.000 68.000.000 68.000.000 75.000.000

UD R3 55.000.000 37.000.000 36.000.000 42.000.000 50.000.000

UD MARLON 55.000.000 65.000.000 47.000.000 45.000.000 55.000.000

CV PETRIK 123.000.000 125.000.000 135.000.000 120.000.000 120.000.000

Sumber : UKM 2016

Figure 1. Shoe UKM Sales at Seruni Sidoarjo village from year 2012-2016

LITERATURE REVIEW

Information Technology is an important part in society. People can feel direct benefit from

direct information to acknowledge world development, including business development.

Information technology can create communication and solving indirect work without the need to

deal it face to face, so that industrial production can be more efficient and effective. If a

company do not own and apply information technology in its industry, it can be left behind by

its competitor. Getting information, a company needs to issue a significant amount of capital.

Nevertheless, a company still needs to do it because using information technology is one of

parameter excellence of a company. Those paid price have a comparable opportunity cost.

Using information technology upon business development is important, beside management

should also be improved.

Recently technology development has important role and can not be separable from company

business. Development of information technology can give many ease in running business

activities. On the other side, information technology can also be abused for bad and less

important. So its application must be done wisely without harming another.

Company can use technology to create e-Commerce which within it can do promotion, through

e-Commerce with tremendous scope. By information technology which is connected with global

internet network, give opportunity in marketing product and service. Internet network and

interesting web feature are one of good promotion media and cheaper especially ini service

business. In principle, technology role in marketing is a media to ease the process, beside that

human resource and marketing strategic holds main key element.

Information Technology Role in Marketing.

Technology in marketing has an important role to increase existency of a company or business

entity. Currently, marketing without back up of advance information technology development,


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can not perform maximal. Technology role on marketing can support interconnected acitivities,

for planning, determine the price, also related by promotion, and goods distribution or service to

customer. So in marketing product it can perform maximal.

In marketing field this information technology is needed for marketing activity. Marketing

activity use information technology such as product promotion via internet, online goods sales,

and provide online customer service.

Muhammad Tajuddin, Abdul Manan, Ahmat Adil 2011 : UMKM is one of core competition that

is flexible on international market that can be prima dona in gain community purpose based on

science. In order for that it is necessary to create sustainable concept to get those purpose. The

implementation of e-commerce application is a media that can be use to ease access for UMKM

management to get consultant help and advocacy from various related parties (such as

researcher, banker, industry experts, trade experts, cooperation experts, and UMKM work

partners). Considering most of UMKM management operate internet as a new gig and never

doing this at all, then get them to be familiar with using internet network to help improving their

business performance, need a lot of training. Based on descriptive analysis motive factor can be

concluded that factor foundation which compelled UMKM to use e-commerce consists of six

factors which are being highest hope for companies while applying e-commerce: Access global

market, product promotion, brand building, make customer closer, help faster communication

with customer and satisfy them.

Information System and Promotion.

Information system according to Hendry C Lucas (Astuti, 2011), is a serial of activities consists

of organized procedures and executed to provide useful information for its user in making

decision and take control on organization. The purpose o this information system is to present

information for supporting decision making on planning, initiating, organizing, controlling

operation activity on sub system of a company, and presenting organization synergi at the

process (Fatta, 2007). Promotion itself according to Salahudin at (Rangkuti, 2009) is one of

unsure of marketing blend which is used to acknowledge, persuade, and remind about a

company product. The purpose of promotion itself is to strengthen image brand of a product and

marketing product (Halim, 2010).

Marketing Performance.

Fulford, H., & Rizzo, A. (2009). Marekting performance is an output of all efforts and strategy

and also marketing performance which have been conducted by the company. Market-based

performance approach is marketing performance assessment based on external condition and

market where the company operates. Fulford and Rizzo (2009) put organizational performance

in conceptual model that is strategic oriented on small business with a reason that performance

is output indicator of strategic management. Assessment of organizational performance is at two

areas which are financial performance and strategic performance. Financial performance is more

measureable so that it is used as performance indicator which is included sales growth, profit

growth, asset growth, and other indicator.

E‐Marketing Strategy

The increasing of internet user at all the time is not ignored by businessmen. Recently many

businessmen create website, blogs, and facebook or twitter accounts to marketing their products.

Many companies that use those social media can interact and create relationship with their

customer. These progresses felt very usefull to become one of business marketing strategy (Paul,

2006). Business marketing by internet is one of means to expand market range. By internet

marketing, company product information can reach available customer any where any time

without the need to involve directly to certain area to promote their products.

Internet marketing also known as digital marketing, web marketing, online marketing, e-

marketing, are product or service marketing by internet (Kandasaami dkk, 2000). New

improvement on new marketing technique which are created by e-tailers and supported by


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internet runs very fast in creating new dimension which is known as e-Marketing (Peattie, 2007).

According to Kaiyanam dkk, e-Marketing is still controversial enough as subject to talk about,

because no one is succeeding in unify many theories around, but there is no doubt that e-

Marketing first appear in form of many technique which deploy by company to sell their

product by internet in 1990-ish era. According to Poon dkk (2007) stated that e-Marketing

strategy usually based on and build at principles that arrange traditional offline marketing which

have been very familiar and famously applied in business world that is known as Marketing Mix

(4P), which are Product, Price, Promotion and Distribution, that create classic marketing mix.

For service marketing there are extra points of 3P, which are People, Process and Phisical Proof.

Then Edy Herman, Rahmawati 2016, stated that internet support communication and global

cooperation within employees, costumer, trader, and other business partners. Internet enable

people from different organization and location to work together as a virtual team to develop,

produce, market, and maintain product or service. Because of internet, marketing of company,

product and service become an interactive process nowadays. Company website is not just a

tool to present product catalog and promotion media, but also for dialog, discuss, and consult

with customer by online, bulletin boards, electronic questioner, mailing lists, and electronic mail

delivery (Ernst dkk,2011). So that customer can be involved directly in planning, developing,

marketing, and selling product which later will improve this UKM performance. Until now,

business marketing by internet is very helpful for businessmen to improve their sales products.

Ratna Yuvita, Anik Andriani 2016 stated that to increase information delivery and fast

promotion and enlarge its scope, they can conduct applying internet use. Internet itself is part of

dramatic technology which has recreated market and business (Eva, 2007). One way to use

internet as media to delivery information and promotion is by using website. Website use for

product information and promotion can increase demand of public to see product sold by the

seller (Indah & Yulainto, 2011). Theferore website can be applied to deliver product

information and promotion well.

Eva, A. (2007). Perception of Internet Use Application for Marketing Small Business Product

RESEARCH METHODS The place of this research is in SME product of shoes in Seruni village, Gedangan Sub-district,

Sidoarjo Regency. This research is descriptive and quantitative. Descriptive analysis will be

done by giving questions in the form of questionnaires. The questions are related to the four

factors in the company that is about; Strengths, weaknesses, opportunities and threats.

Questionnaires will be given to the owners of SMEs to assess how the strengths, weaknesses,

opportunities and threats of SMEs held so far. Of course also by comparing with competitor

SMEs. Quantitative analysis is to find relationships between variables: the sex of consumers,

shelter, age, education, occupation, and income of respondents / consumers.

Realization of Problem Solving in an effort to realize the activities of Increasing penjualn UKM,

then the initial evaluation of the condition of SMEs in Seruni Sidoarjo obtained the additional

promotion of one of them made a website with the name pemasaranukm.com


Main Description of UD GAGO

UD GAGO is founded at year 2004. Its founder name is Juli Agus Suprianto who has

experiences in shoes business since 1987. UD GAGO is located at Seruni Kecamatan Gedangan

Kabupaten Sidoarjo on area of about 100 meter sq. This location is functioned as workshop. The

initial capital establishment of UD GAGO is Rp 500.000,- which came from private fund of the

founder. By this initial capital, UD GAGO can give employment opportunities for 9 workers. In

the beginning they were hired by other parties then they can establish on their own. Based on

http://pemasaranukm.com/


251

number of workers qualification UD GAGO is classified as small business units. There are

Internal and External Strategic Factors Identification of UD GAGO such as:

STRENGHT WEAKNESS

1.The ease of getting raw material.

Having a social mind, responsible,

smart, high spirit and entrepreneur

leader.

2. Having an economical and highly

competitive products.

3. Having supportive tools with modern

technology

4. Have work atmosphere that is familial

and mutual cooperation between

workers and managerial team

5. Product price is affordable by many

level of costumer

6. Image is well known.

7. Job coordination is more efficient

because manage directly by the owner

1. UKM still conduct activity

independently by simple tools

2. Lack of educated human resources

3. Facility and infrastructure is still limited 4.

Financial system is still simple

5. Limited work capital

6. Production based on order, so there is

no stock

7. Dependence on capital by mass buyer

8. Selling price is dominated by wholesale

price.

OPPORTUNITY THREAT

1.Increasing state economy by UKM

program

2.There is government support at

improving non oil sector by program of

Ministry of Industrial and Trade

3. Availability of always developing shoe

market

4. Intertwining of good cooperation with

government in effort to develop

economic sector

5. Availability of descent raw material and

Technology Improvement.

6. Good relation with distributor and major

store as partners.

7. Change of people life style

1. Public buy power level is still low.

2. There are many common products from

competitor

3. Costumer taste is always changing

4. Supplier capacity.

5. New competitor

Website Marketing.

System design level is meant to apply entity and data that is needed by system, system

modelling with process description and occurring data flow. This design phase is meant for

developing in order to fulfil need that has been identified on analysis level by giving technical

details and applying boundary on the system.

Below this is explanation of web pages which has been implemented that consists of static and

dynamic pages (html and php).

1. Index, is front page of system.

2. About, is page that contain with informations abaout business incubator

3. Info & News are pages that presents news and information about marketing system

4. Product data are pages that presents list of UKM products.


252

5. Login is file that handle user authentication on system. If username/password match

database of industry user database then the scripts will choose small industry session. If

it matches center industry database then it will be directed to administrator page.

6. Industries are industries session which contains menus for industry users.

7. Product Contents are company profile products pages of industries. This file will

present product content which has been uploading.

8. Product are consists of content details of each products. On this page it will present list

of products, prices, product varian list, audio, video, virtual products, and on each

displayed products

9. Change of content and prices are pages to see prices that have been given by industries.

10. Input topics are pages to input content (upload file) of products in form of html files,

into directories at server. And after uploading products data into database, then we can

input prices, promotion and supporting files. These files can be accessed by industries

as the content given by producer.

Figure 2. Web design address : pemasaranukm.com

1. Make Logical User Flow Right, a website must have an appealing look, but also make it easy to browse by user is more

important. You have to make how user flow from your website. Easy user flow, will be good for

user experience amd SEO (Search Engine Optimization), because google assume content and

structure of website as an important matter to determine your website ranking. Make

wireframming website and show your friends, is it easy to understand? If your friends

understand, whether other people will understand and google bot will create ranking based on

that.

2. Important information for your business Biggest mistake of someone is when creating a website according to what they want, not based

on what they need. For example a restaurant website, everybody wants to have music and big

pages of about us, but they forget about basic things such as menu, contact information and

location direction.

Keep maintain text as minimum as possible on mission statement pages of your website, so that

people can understand the point easily. One tip to deliver information and your purpose is by

http://startupbisnis.com/wp-content/uploads/2012/02/birchbox-call-to-action.png


253

comparing your business with other things. Do not hesitate on something that is concise, solid

and clear because 1-2 sentences will be very effective.

Figure 3. Low of pemasaranukm.com.

Whatever your business is, it is necessary to have information on what is your purpose, but it

does not mean we abandon supportive stuff such as “music” at the restaurants beside “menu”

that we need. If you are a retailer, of course beside product info it is necessary to have its

pictures. If you are a service provider, do not forget your customer testimonial. For example a

wedding planner must have writings about their experience in handling a wedding. A web

designer must provide screen shot on creation they have been made. A hair stylish must have a

testimonial of their skill and final result of their model. Give information on what user might

want to know.

3. Contact Information.

Your contact information is the most important thing in a business. Maybe you have experience

on how difficult it is to call contact information from a website that you have visited, annoying

isn’t it? Therefore avoid similar condition happens to your website visitor. Make access and

display that is visible for your information contact form suc as telephone number, email,

address. There is no more awful than difficulty in contact a required business or service.

Put your information either email address or telephone number as text, do not put it on as

picture because it will trouble your visitor to copy your information. Email address must be easy

to copy or click by visitor to ease them when they emailing to you.

If you do not want to be disturbed by telephone, just give them your email contact. But make

sure that you will answer it immediately. And use your website domain as private email so it

looks more professional. If you like gmail interface, you can use google apps to set up custom

email (this is free until 10 email addresses).

4. Integrated with social media Make sure your website is integrated by available social platform, such as twitter, facebook,

tumblr, youtube, linkedIn, etc as a media to promote because social media have such an

important role in marketing world nowadays.

Integrated with several social platform also function to increase your SEO, gaining some new

customers. But also remember that this can only work if it is supported by new update contents

regularly. So make sure that you always update your website contents.

5. Supporting Mobile Application Smartphone and tablet are very influencing on increasing web traffic nowadays, and several

website improve becoming mobile application. Andy Chu, director of Bing for Mobile said that

“70% of works can be done in one hour and done by mobile sites.” This means that people

browse website intensely because the support of devices recently. So, create your website that

can be read in handheld devices.


254

Until 2 years ago, design a web means design to be read by a computer, but now means

designing for all devices that connected to internet. Such as laptop, tablets, smartphone and all

have different sizes. How to do that? Make a responsive design. A responsive website will ease

your website to adjust size of screen where the website be opened.

6. FAQ Many people ask question about anything on your website, then to ease you so that you do not

have to answer all visitor questions come into your email, make a summary of their question,

and make a list and its answer altogether. Question usually is about raw material that has been

used, how to deliver order, company history, sizes, delays, or return of damaged goods (depend

on website that you created).

7. Good Hosting Do not underestimate hosting problems. Your website needs good hosting, available on

mainstream provider, and can handle any damage at anytime 24/7, because if it is not, you can

have your website on low speed when it is browsed, difficult to be accessed, and make your

website on low rank at SEO.

8. Do not use to many features

Website must be simple! Exempt form less usefull features on your website, such as : Musik

1. Flash

2. Anything that is autoplay

3. Unnecessary information and media will make your website slow.

CONCLUSION

Based on description above then it can be concluded that: to market via online using website

address, proposed product must be explained in detail so the buyer will trust and interest in

purchase them. Development strategy must be done by craftsmen is: utilize website as

promotion and marketing media and also to increase sales. Increasing income will develop the

small medium business.

REFERENCES

Astuti, P. D. (2011). Sistem Informasi Penjualan Obat pada Apotek Jati Farma Arjosari. Journal

Speed, 34-39.

Fulford, H., & Rizzo, A. (2009). A Conceptual Model for The Strategic Orientation of Small

Firms. Journal of Enterprising Culture. 17(1): 25-54

Kaiyanam, Kirthi, et al. (2002). The E-Marketing Mix : A Contribution of The E-Tailing Wars,

Academy Of Marketing Science Journal, Fall 2002; 30, 4; Proquest.

Lalu Edy Herman1, Rahmawati (2016). e-MARKETING : Strategi Pemasaran Ukm Berbasis

Teknologi Informasi Untuk Menembus Pasar Global. Seminar Nasional IENACO –

2016

Muhammad Tajuddin, Abdul Manan, Ahmat Adil 2011 : Studi Kasus Model Strategi Pemasaran

Terintegrasi Berbasis Teknologi Informasi Di Nusa Tenggara Barat, Jurnal Ilmiah

Kursor Vol. 6, No. 2, Juli 2011

Paul, Pallab. (2006). Marketing on the Internet, Journal Of Consumer Marketing, 13 (4) :27-39.

Peattie, Ken. (2007). The Marketing Mix in the Third Age of Computing : Marketing

Intelligence dan Planning, 15 (3): 142-150.

Ratna Yufita, Anik Andriani ( 2016). Sistem Informasi Dan Promosi Berbasis Web Pada

Family

Mebel Magelang. IJNS – Indonesian Journal on Networking and Security - Volume 5 No 1 –

2016 – ijns.org

Rangkuti, F. (2009). Strategi Promosi yang Kreatif dan Analisis Kasus Integrated Marketing

Communication. Jakarta: Gramedia Pustaka.


255

LAUNCHING STRATEGY DELISH COFFESHOP DI KOTA

GRESIK

1Churin In, 2David Sukardi Kodrat♠


INDONESIA

ABSTRACT

Indonesia, dringking coffe is very common culture. Even though in

other countries also. Consumption of coffe get goot increase every

years. The increase can be good opportunity to establish coffeshop.

This step should arranged and plannedwell because preview

surveyfrom research institution in Amerika indicate a new brand that

launched 95% was failed. We have to identify key success factor and

formulize the best launching strategi to apply.

Keywords: strategy, coffeshop, gresik

INTRODUCTION

Gresik city known epithet with "1001 city of Warung Kopi (coffe shop)". That utterence not

too excessive if we see how the habit peoples use to drink coffe become a culture that cannot be

separate with those peoples who live in Gresik. That’s way many coffeshop can encountered in

every corner of the city. Situation, the growth trend, and scheme of consumption coffe all that as

encorege to open dellish coffeshop. This business created by innovations for satisfy demand of

market to enjoy coffe with more relaxed. This reserch used for resolve two case thait is:

(1)What is the Key Success Factor Launching of Delish Coffeshop? (2) How is the best

launching strategy for Delish Coffeshop?

While the Research purposes is (1) Determined what is the factors that be key success factor

durung the process of launching for Delish coffeshop. (2) Created the best launching strategy

for Delish Coffeshop.

This research consist of 2 benefit that is

1. theoretical

This research expected can give contribution for key succes factor concept and gave advice

about launching strategy for coffeshop.

2. practical

As guides for delish coffeshop and entrepreneur specially to give information about key succes

factor in caffeshop business to create the best launching strategy

On this case reseach should have limit to make easier, Limit of research comprised with things

that support launching process, this research only in Gresik city that analize about factors that

available in gresik city only

Previous research

Researched by Hwang, B dan Lu, T (2013) with title Analysis for e-SCM project

implementatition and a case study in semiconductor manufacturer. The result showing the top

level of strategy is most critic followed by organization process and technical. Key Succes

Factor is part of management strategy, Key Success Factor (KSFs)

LITERATURE REVIEW

Key success factor (KSFs) is the most important information that tent financial or nonfinancial

that different in company environment and influence about the success of company to achieve


256

the company goals we need the best strategic. Blocher in Kodrat (2009) to formulate of key

success factor(KSFs) needs 3 steps to do:

1. Doing analysis strategy for company with SWOT analyze

2. PEST analysis (Politic,Economic,Social,Technology)

3. Develop strategy information

Key success factor is determinant of company successness. Characteristics of key

success factor Antony,et.al. in Kodrat (2009) is:

1. It is importan in explaining the success of failure of the business unit

2. It is volatile and can charge quickly, often the reason not control label by the manager

3. A change in unpredictable

4. It is significant enough the prompt action is required when a change occurs

5. The variabel can be measured either directly or via a surrogate

Kuczmarski in kodrat (2009) sucessness of new produk supported by levels of inovation

that perceived as “new” by consument with used textual creteria, behavior, and symbolic. To

support of sucessness of new product, the first thing is the producer do verifying concept the

product. The concept test recommended as a tools to show the levels of product acceptance from

inovation corespondace to consumen inovation. That test can do with entrepreneur markeship.

Kodrat (2009) entrepreneur markeship concept is the combined of entrepreneurial concept with

marketing concept. This concept is important to determine success of launching new product.

Markeship consist from five steps terdiri dari lima that is marke insight, marke think, Marke Do,

marke thurt dan marke win. (Kodrat, 2009)

Framework

From the plan of estabilishment delish coffeshop, will held launching product. where before do

launching product have to do identification of key success factor as reference to establish

strategy for delish coffeshop.

Analysis model

Analysis of Key success faktor doing with establish internal indicator either IFAS that can

analyzed 5’s force analysis and EFAS indicator that can analyzed PEST analyze. Then the

indicators will determined by priority scale, to determine which one is the most important.

Research approch

Research approch in this case using applied research.

Determination of informants

The creteria of informant who choosed on this research is consumen or buyer, supplier, and

competitor in Gresik city.

Data Aggregate Data aggregate methode every aspect can exlained by means of kinds of data, and data sources.

Research Instrument

Interview guidlines

Observation guidlines

Dokument tools or document notes form

Research focus

This research in gresik only

Verify data

Yin (2009), have four kinds of test for checking validate of contruct, internal validiy, eksternal

validity, reliability.

Data analysis

1. Key Success Factor analysis

2. Five Force analysis on IFAS

3. IFAS (internal strategic factor analysis summary)

4. Analisis PEST


257

Economy

Politic

Social

Technology

5.EFAS (ekternal strategic factor analysis summary)

6. Important level

7. Analysis Entrepreneur Markeship to created Launching strategy

Marke insight

Step that have to do on marke insght is:

1. Change analysis

2. Competitif analysis

3. Trend comunity

4. Costumer potential

Marke think

Step that have to do on marke think is:

1. Segmentation as mapping strategi

2. Targeting

3. Uniqe selling

On this step will create a brand identity.

Marke Do

1. Promotion

2. Distribution

3. Product

4. price

On this step will created a brand awareness

Marke Truth

1. Repeat transtaction

On this fase that will happen brand trial and brand confiction

Marke Win

On this fase will happen Brand loyalty

Data analysis

The general description of Object research

Delish Cofeshop is one of coffeshop business that will establish in Gresik city.

Key Success Factor Analysis

Five Force analysis on IFAS

Tabel 1. Rangkuman Five Forces Porter Analysis Delish Coffeshop

Indicator average Condition

Threats of New Entrants 3 Medium

Bergaining Power of Supplier 2 Medium low

Bergaining Power of Buyer 3 Medium

Competitive Rivalry Within Industry 4 Medium High

Threats of Subtitute Products 3 Medium

Source : processed Data (2014)


258

Delish Coffeshop Five Force of Competition Model

Competitive rivaly within industry

Bargaining power Threat of subtitute

of buyer products

Bargaining power of

Supplier Threat of new entrants

Figure 1. The five forves of competition model delish coffeshop

Source : processed primer data (2014)

Strategy used

Based of analysis that did on analisis five force of competition, the strategy that used is The

differentiation strategy.

Table 2. Analysis IFAS (internal strategic factor analysis summary)

The determine Factors of

internal strategy

Quality Rating Quality Score

(BobotxRating)

Strength

A. Family Supplier

B.

C. Quality of coffe

D. Different concept

0.250

0.250

0.150

3

4

4

0.750

1.000

0.600

Total S 0.650 2.350

Weakness

A. Need major fund

B. competitor

0.200

0.150

2

4

0.400

0.600

JUMLAH W 0.450 1.000

TOTAL S+W 1.000 3.350

Source: processed primer data(2014)

Analisis PEST

Based from PEST analysis, obtained results show indicator that be opportunity and threat is:

Opportunity

1. The high of population income (UMK)


259

2. Life style

3. Technology

Threat

1. Trend that easy to change

2. Technology competition

EFAS (eksternal strategic factor analysis summary)

Table 3. quality of external company factor

Faktor-Faktor strategis

eksternal

quality Rating Quality score

(quality x Rating)

Opportunity

A. UMK penduduk tinggi

B. Life style

C. High technology

0.200

0.225

0.225

4

4

3

0.800

0.900

0..675

total O 0.650 2.375

Threat

D. Trend that easy to

change

E. Technology competition

0.225

0.125

3

3

0.675

0.375

total T 0.350 1.050

TOTAL O+T 1.000 3.425

Sumber: Data primer yang diolah (2014)

SWOT Matrix

If the quality factor marged with external company factor:

(S-W) the result S 2.350 - 1.000 = 1.350

(O-T) the result O 3.375 – 1.050 = 2.325

based from SWOT analysis delish coffeshop is at growth quadran where the strategy

that used in this business is used stable growth strategy.

Model Entrepreneur Markeship analysis for determine Launching strategy

1. Marke insight

1. Changed analysis

a. technology

high technology can help on business process on delish coffeshop.

b. economic growth

economic growth in Gresik city on good level.

c. The growth of polotic and law

The policy that made by goverment specially on bank fundingBanyaknya

kebijakan-kebijakan yang dibuat oleh pemerintahan terutama dalam hal pendanaan bank.

d. The friction of social and culture

the high income in gresik city can change they life style.

a. Market changes

Market for coffe in indonesia reached high market every year and always follow population

growth.

2. Competitif analysis

a. New comer

The citizens in gresik used to drink coffe, that will be opportunity make business.

And they have high income avarege.

b. Subtitution product.


260

To avoid of subtitution product delish coffeshop have to somtheng diference with the

competitor. Delish coffeshop sholbe be better then them. The differentiation is kuality and

sevice

3. Trend comunity analysis

a. Life style between group with other. The life style already changed be modern style.

4. Consumen potential analisys

There is way to determine petential consumen:

specify target

market target that choose by delish coffe is teeneger and adult.

Proaktif Contact with friends, co worker, family and many things

network

make a network can be strat from mouth to mouth, then rcomendation from costumers to

another cotumers is the most prosper. The other thing can make promotin with medial

social, because this is the new trend even we can make friend with new people by this.

Marke think

The step that have to do on marke think antara lain:

1. Segmentation as mapping strategi

a. Psikografic

More specify, the segment that choosed by citizens specially people on junior high

school, senior high school, worker that among 15 years old until 40 years old.

2. Targeting

Targeting from Delish coffeshop are teeneger and adult and segmentation that already

choosed are between 15 years old until 40 years old

3. Uniqe selling

a. Content delish coffeshop is selling many variant coffe that heve high quality with low

price.

Contects delish coffeshop do launching or grand opening, and make promotion by

wedsite, media social, like instragram, twitter, facebook, path.

b. Infrastructure is utilize technology as tools to help delish coffe shop production. The

tools are coffe maker as produce coffe drink with good taste and faster, cassier, internet,

media promotion.

Marke Do

1. Promotion

launching or grand opening, give discont, free product, member card, point

accumulation to get free drink. Use internet for promotion by website and another media social

that trend on that time

2. Distribution

Delish coffeshop more focus to sell coffe, the raw materials from coffe factory then

supplied to coffe shop, after that coffe will proccess be many variant of beverage and selling in

fotm of coffe powder too, that will pack and brand by delish coffeshop.

3. Product

sell many variant product

3. Price

The price between Rp. 10.000 hingga Rp.15.000

Marke Truth

Delish coffeshop will do active promote by media sosial

Marke Win

Loyal consumen will do repeat transaction because they like the product.

Implication Manajerial


261

Key success factor

1. Five Force analysis

Tabel 4. Implications Five Force

Indication Applied Target

Threats of new entrans Defferentiation product Loyal costumers

delish coffeshop

Bergaining power of

supplier Raw material from

family factory

Stock of raw

material

Quality produk

Bergaining power of

buyer Potential consumen High income

Competitive rivalry within

industry Inovative

product

Consumen prefer

delish coffeshop

then other else

Threats of subtitute

produk good service

quality

product

loyal costumers

Source: processed Primer data (2014)

2. PEST analysis

Tabel 5. Implication of PEST

Indicator Factor in fact Target

Politic business permit

Policy

Bank funding

Easy

Easy

Easy

Economy High UMK

Daya belinya tinggi

Social life style modern

choosing delish

coffe to be place

where can waste the

time, place for

meeting with

friends, relation etc

Technology high technology to help delish

coffeshop produce

coffe and make

everything easier.

Make costmers feel

more comfortable

with technology

facility for example

free wifi.

Source: processed primer data yang(2014)


262

CONCLUSION Based from this analysis, delish coffeshop can formulate various of key success factor. Key

succes factor compossed from strenght, weakness, opportunity dan threat. The company can

find crucial things to support successness the company. Key success factor on delish coffeshop

is:

Internal factor:

Supplier is own company with quality score 0.750

Coffe quality with quality score 1.000

Different concept with quality score 0.600

Major funding with quality score 0.400

Competitor who have loyal costumers with quality score 0.150

External factor:

High income (UMK) with quality score 0.800

Life style with quality score 0.900

High technology with quality score 0.675

The trand that easier to change with quality score 0.675

Technology competitor with quality score 0.375

REFERENCES

Ireland, R. Duane, Hoskisson, Robert E., Hitt, Michael A (2013) The Management of Strategy

Concepts Cases, 10th adition. Canada: Nelson Education, Ltd

Jakfar, dan Kasmir. (2010) Studi kelayakan Bisnis.Jakarta.Kencana Prenada Media Grup.

Kodrat, David Surakdi, (2010). Manajemen Eksekusi Bisnis. Yogyakarta: Garha Ilmu

Nurwahyudi (2011) Dalam Jurnal Pengaruh Kemampuan tenaga Penjualan Sistem Distribusi

dan Sistem Promosi Terhadap Kinerja Launching dalam Upayah menciptakan Brand

Awareness

Rangkuti, F.(2013) Teknik Membedah Kasus Bisnis Analisis SWOT (Edisi revisi). Jakarta; Pt

Grramedia Pustaka

Royan, M, Farns (2009). Distrubutorshop management. Jakarta: Gramedia Pustaka Utama

Sulisyanto (2010) Analisis Data dalam Aplikasi Pemasaran. Bogor: Ghalia Indonesia

Suderajat, Muhammad (2009). Jurnal Key Success Factor Pemasaran Sayur pada PT. Rodeo

Fresh Vegetable and Friuts Lawang Malang. Avalaible www.docstoc.com

Thompson, K.E., Artur., Jr.,A.J. Strickland dan John E. Camble. (2005). Crafting and Exciting

Strategy : The Quest for Competitive Advatage-Concept and Case, 14th ed. Boston:

McGraw Hill irwin

Tjiptono, Fandi (2008). Strategy Pemasaran Edisi ketiga. Yogyakarta: Penerbit Andi

Ward, John. Peppard, Joe. (2002). Strategic Planning for Information System, 3rd

Edition. John Wiley and Sons, Inc, New York.

http://www.docstoc.com/


263

STRATEGY DESIGN MARKETING WOOD FLOORING

PRODUCT IN PT. SRIKANDI MANDIRI SAKTI

1Ristanti Ayu Dian Permatasari, 2Tina Melinda♠


INDONESIA


ABSTRACT

Strategies designing marketing wood flooring products aims to formulate

a marketing strategy based on the design of Five Porter and SWOT

Analysis in wood flooring products in PT. Srikandi Mandiri Sakti. The

unit of analysis used in this study are individuals (informants) were 7

informants.The design of this marketing strategy is analyzed through

some analysis of the data namely, SWOT analysis, marketing mix

analysis, analysis of the internal environment, external environment

analysis, Porter Five Analyisis, and SWOT matrix analysis. From the

analysis of the company SWOT matrix is in the first quadrant, a company

discount high growth market and have a strong competition, so

companies do market development and product development for the

integration of future products.

Keywords: Marketing Strategy Design, Flooring, Growth Markets,

Analysis

INTRODUCTION

In the development era, industrial competition will be more stringent. Characterized by many

establishment of industrial companies engaged in the same industry. In the domestic market

competition will provide opportunities and threats to local companies. The growing media

information will result in high competition that must be faced by a company. So it needs a

competitive strategy for the goal can be achieved as well as the company can still maintain

themselves and compete in a healthy manner. The need for timber increases considerably from

year to year as the population increases, technological advances, industry and science. In the

field of construction for example, wood still has significance in its use although it gets rivals

from other materials.

Wood has several advantages that are easily formed and worked on, as good heat insulators, and

have good decorative properties. Wood is one of the many materials used in building houses, as

wood building materials can be processed into door frames and windows and so forth. It also

provides an opportunity for entrepreneurs who want to engage in the processing of wood-based

products, see the development of the property market continues to move up, so the need for

wood continues to increase, especially for wood flooring or flooring products. Currently wood

flooring products in Indonesia compete very closely with the number of similar wood

processing companies. Wood floor market opportunities according to a survey in 2016

conducted by Perhutani will focus more on wood processing industry to work on flooring

products (flooring) which in 2016 is targeted to reach production volume of 8,895 m3 for the

Indonesian market. Based on Perhutani data from 2015 to 2016, Indonesia has requested export



264

activities of market expansion of flooring products in some countries that have potential for

product development.

The wood industry known to the community as in Bali, Jepara, Blora, Ngawi, Pasuruan and

Madura, is a wood industry whose products have grown rapidly and sales have reached national

and even international markets. The quality and product of each different region also provides a

characteristic that can provide its own selling point for the industry. One of them is PT. Srikandi

Mandiri Sakti located in Gresik which is also one of the many industrial enterprises in the field

of wood producing flooring. PT. Srikandi Mandiri Sakti is one of the industries engaged in the

service industry and production. PT. Srikandi Mandiri Sakti is a family company where in some

important part is managed by family side, while at other level managed by employees. PT.

Srikandi Mandiri Sakti is engaged in wood processing from upstream to downstream process,

from log to wood process to goods such as wooden floor, window frame, door, window,

furniture and so on, one of which is wood flooring. The company uses production by job by

order process, where the company produces goods according to consumer demand.

LITERATURE RIVIEW

Marketing Strategy

According Kotler (2012), marketing management is the analysis, implementation, and

supervision of programs intended to exchange with the intended market to achieve

organizational goals. It depends on the organization's offerings in meeting the needs and wants

of the market in pricing, effective communication and distribution to drive and serve the market.

Marketing Mix

According to Sumarni and Soeprihanto (2010) marketing mix is a combination of variables or

activities that are the core of the product marketing system, price, promotion and distribution. In

other words, marketing mix is a collection of variables that can be used by companies to

influence consumer responses.

Analysis External Environment

The elements present in this environment have an indirect effect on the company.

According to Mayadewi (2014) PEST analysis is an analysis of the external environmental

factors of business covering the fields of politics, economics, social, technology. PEST is used

to assess the market of a business unit or organizational unit. The direction of PEST analysis is a

framework for assessing a situation, and assessing a company's strategic direction or position,

marketing plan or idea. Where this analysis can be taken a new opportunities or threats for the

company.

Analysis Internal Environment

The company has its own internal environment. The internal environment that will bring out the

weaknesses and strengths of the company. Anything that belongs to the internal environment

should be more easily identified because it is inside the company. Yulianti (2014) aspects of

industrial environment will be more directed to the aspect of competition where the company's

business resides. The state of competition in an industry depends on the five core competitive

forces mentioned by Porter, including the threat posed by competitive competition, buyer

bargaining power, supplier bargaining power, potential new entrants, and replacement products.

Strength – Weakness – Opportunity – Threath (SWOT)

The SWOT analysis includes an effort to recognize the strengths, weaknesses, opportunities and

threats that determine the company's performance. External information about opportunities and

threats can be obtained from many sources, including customers, government documents,

suppliers, banking circles and partners in other companies. SWOT analysis is the systematic

identification of various factors to formulate the company's strategy. (Rangkuti, 2013). This

analysis is based on logic that can maximize strength, opportunity, but can simultaneously


265

minimize weakness, and threats. The strategy decision-making process is always related to the

development of mission, goals, strategies and company policies.

RESEARCH METHODS

Based on the background and problems in the company, companies need the right marketing

strategy to get out of the industry competition in increasing sales. Data analysis used in this

research by using analysis of internal and external environment, internal-external matrix (IE),

and SWOT matrix analysis. From the results of this data analysis is used to obtain the right

business strategy for the company. Furthermore, the results obtained will be directly applied to

the company. To know the appropriate business strategy to be applied so that it will help the

company to be able to compete with similar competitors. In general, this research will discuss

some matters related to the determination of the right business strategy and how to design the

right marketing strategy based on Five Forces Analysis and SWOT on flooring products.

The basis used in this study is theoretically from several authors' books related to business

strategy. The next step is to conduct interviews with informants followed by analysis of data

obtained using internal and external environment analysis, with internal-external matrix (IE) and

SWOT matrix analysis. This data analysis is used to obtain the right business strategy for the

company.

This research uses qualitative research methods by exposing the systematic review of scientific

information derived from the subject or object of research (Sugiyono, 2010). Qualitative

research is a research that is not based on numbers but based on logical and truth-based analysis

and comparing the existing theory with practice applied to PT. Srikandi Mandiri Sakti. The data

collected from qualitative research takes the form of words and deeds obtained by examining,

investigating, studying and studying carefully and informing hypotheses so as to obtain

something like reaching the truth and getting answers to problems or scientific development

(Siregar, 2013).

Qualitative research is descriptive, which means a study that describes phenomena or events in

accordance with facts. The data contained in qualitative research are presented in descriptive

form in the form of recording, interviews and photographs of reported research objects that fit

the actual situation.


Marketing Mix

Products

Wood flooring products manufactured by PT. Srikandi Mandiri Sakti uses a dry clinical process,

where the product has wood quality with good wood fiber, so it is not easy to expand and

shrink, and able to withstand heavy loads.

Price

In the case of PT. Srikandi Mandiri Sakti sells to consumers with discount programs if

consumers buy in large quantities, it is done so that consumers can make price comparisons with

other companies.

Place

For the place where the company conducts product distribution directly and indirectly, it is

directly done with consumers coming to the company by looking at the product, indirectly done

by online system via email or messenger by sending photos of manufactured products.

Promotion

Promotion activities of PT. Srikandi Mandiri Sakti is done by maintaining networking

relationship with some consumers who become old customers by utilizing information from

mouth to mouth and also social media.

Internal Environment Analysis


266

Newcomer Threats

The results show that offering price and quality as well as building consumer confidence is a

factor to consider when new entrants in the timber industry begin to enter.

Product Substitution Threat

The results show that the timber industry has many kinds of materials used, especially for

flooring, and consumers usually use solid wood and laminate where each material has its own

advantages and disadvantages, of each demand for different prices.

Competition in Similar Industries

The results show that each wood company has its own characteristics to attract the attention of

consumers, but with one goal that is to provide added value to customers feel satisfied with

what the company gives and of course provide a competitive price.

Buyer's Bargaining Power

The results indicate that the bargaining power of buyers in the field of wood industry is

relatively high seen from the number of companies of the same kind inside and outside the area.

Supplier's Bargaining Power

The results show that the bargaining power of suppliers in the timber industry is relatively high,

as suppliers have the power to raise prices and lower prices, such as Perhutani in terms of wood

raw materials.

External Environmental Analysis

Politics

Influential government policies depend on the company itself how the company responds to the

policy by looking at what policy changes affect the company's production activities.

Economics

The decline in the pace of the Indonesian economy and the weakening economy of the rupiah

exchange rate against the US Dollar made the purchasing power of customers declining and

finally replacing wood products with substitution products.

Social

The stipulation of salary wages of employees of some companies only experience the impact,

and there are companies that have an effect and do not affect it.

Technology

With the development of technology in the current era is very influential on all lines of the

company, because with today's technology can facilitate the company to market its products,

other than that consumers can easily buy goods without having to come to the company.

SWOT Analysis

On SWOT analysis matrix conducted by timber company of PT. Srikandi Mandiri Sakti is in the

position of Quadrant 1. The SWOT analysis matrix is in position (SO Strategy) where general

strategy can be done by the company to take every advantage on the existing opportunities.

The company has the power of having a steady customer, and timely product delivery in

accordance with consumer demand. While the opportunity for the company is the opening of

wood floor products export through SVLK licensing. The company focuses on the development

of existing products and improves the quality of products in production, in addition to the future

companies will add human and machine resources for product finishing activities.

CONCLUSION Based on the results of analysis of PEST and Five Forces Porter apply SWOT analysis of the

strengths, weaknesses, opportunities and threats owned by PT. Srikandi Mandiri Sakti. The

results obtained by the company enter into the quadrant 1 where in the SO (SO Strength-

Weakness) where the company's strategy is to take advantage of existing opportunities, current

opportunities in wood flooring products is the possibility of export activities with the licensing


267

SVLK, With the current demand for wood flooring high enough in China, the company can take

advantage of opportunities for expansion of marketing activities in exports.

REFERENCES

Kotler, Philip. (2012) Marketing Management: Analysis Planning and

Control.Canada:Pearson Education.

Mayadewi, P. (2014). Perencanaan Kebutuhan Pengembangan Sistem Informasi. (Studi Kasus:

Perpustakaan Daerah Kota XYZ). 1-8

Rangkuti, Freddy. (2013). Analisis SWOT: Teknik Membedah Kasus Bisnis. Jakarta:PT.

Gramedia Pustaka Utama.

Siregar, Syofian. (2013). Statistik Parametik untuk Penelitian Kualitatif. Jakarta: PT.Bumi

Aksara.

Sugiyono. (2010). Metode Penelitian Pendidikan Pendekatan Kuantitatif Kualitatif dan

R&D. Bandung: Alfabeta.

Sumarni, M., & Suprihanto, J. (2010). Pengantar Bisnis (Dasar- Dasar Ekonomi Perusahaan)

(Edisi 5). Yogyakarta: Liberty


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OPTIMALIZATION PROPERTY ASET OF VILLAGE

(STUDY IN DESA KETAJEN, KEC. GEDANGAN, KAB.

SIDOARJO)

1Sugiono, 2Tina Melinda♠


INDONESIA

Email : [email protected], [email protected]

ABSTRACT

The development of industry and commerce have always been

followed by warehousing and factory needs. Warehousing and factory

requires a considerable land area and a strategic location adequate

supporting infrastructure. On the other hand there is an area of land

the village treasury has not managed properly even neglected.

Constitution number 6 of 2014 about village mentions that the village

has the wealth and assets of the village that can be managed and

cooperated with investors to improve the welfare of the village

community. The potential is owned by Ketajen Village District

Gedangan of Sidoarjo Regency with land area ± 2,5 Ha in a very

convenient location. PT. Sarana Dwi Makmur as investors interested

to manage the land of the village treasury with rent system, because

it has a strong legal basis with the Cooperation of Operation (KSO)

Built Operation Transfer (BOT) method. Efforts to investigate the

optimum utilization of the land of the village treasury, this research

using the Highest and Best Use method (HBU). The HBU method

analyzing about the Legal Permisible (Law), Physical Possibility (the

location of land) Financial Feasibility and Maximum Profitability.

This research aims to analyze the optimum utilization of land the

village treasury in in Ketajen Village District Gedangan of Sidoarjo

Regency as well as to find out amoung home store / home offices and

warehousing, where property is the most optimal land utilization of

land the village treasury meant. The results of research the HBU

method can be called optimal, both in terms of Legal Permisible,

Physial Possibility, Financial Feasibility and Maximum Productivity

are included in the category deserves all. Potential profits and quick

returns on investment value of this research, can provide early

information to investors in the field of property. For beginner

businessman or start-up, this research could trigger or booster that

this pattern of cooperation with its potential still open wide in all

segments without having to pay a large capital.

Keywords: Precision, Opportunity, Regulation, Cooperation,

Creativity, Development, Profit, Sharing.

INTRODUCTION

The developing industry and trade are always followed by the needs of strategic areas to extend

factory and warehouse. However the vast and strategic areas are hard to find.




269

Any such land in an area, it is definitely its location in the territory of a village. On the other

hand, the village has an asset that one of them in the form of village land. Village land are not

managed optimally or abandoned by the village government due to the lack of human resources,

education, finance and public participation.

Law of the republic of Indonesia number 6 of 2014 concerning village (hereinafter referred to as

the Law No. 6 of 2014) part 1, article 1 reffered to herein as “Village shall be village and

traditional village or as referred to by other names, hereinafter referred to as Village, shall be a

unit of community that has boundaries with the authority to regulate and manage the affairs of

government, interests of the local communities based on the community’s initiatives, right of

origin, and / or traditional rights recognized and respected in the system of government of the

Republic of Indonesia”.

As a government, the village has the wealth and assets that must be managed for benefit of well-

being. Law number 6 of 2014, article 76, alinea 1 explained that “The Village Assets can be

Village land, communal land, Village markets, animal market, mooring, Village building, fish

auction, agricultural product auction, forest belonging to the Village, Village-owned springs,

public baths, and other assets belonging to the Village”. The statement in the article indicate that

village land is one of form of village assets. Further, Winarno (2003:197) revelead that the

ownership of village land is part of the village economic structure because land is the most

important rural community asset.

Therefore the management of village land must be done properly in accordance with the law

number 6 of 2014 article 77 alinea 1 and 2 which concerning in the village asset management.

Alinea 1 reffered “The management of Village assets shall be held by the principle of common

interests, functional, legal certainty, transparency, efficiency, effectiveness, accountability, and

the certainty of economic value”. Alinea 2 reffered “The Village asset management shall be

done to improve the welfare and living standards of the Village community as well as increase

Village revenue”.

Thus, it can be explained that the utilization of village land should be done properly due to

relate with the improvement of social welfare. Optimizing the efficiency and outcome of village

land should be done for the benefit of village community development and service. The most

problem in management of village land is poor management of village land, such as agriculture

land and abandoned land. Research of Setiawan (2015) showed that several factors that become

less optimal constraint of village management, that are the lack of human resources in knowing

their duties and performance as village government, village government initiative in utilizing

the village’s original incomes especially the village land, participation and responsibility of their

village community toward the village land and the low level of village community education.

One of villages which has village land but not be managed properly, is Ketajen village,

Gedangan district, Sidoarjo. Ketajan village has 2,5 hectares village land. This village land is

located in strategic industry and warehouse because being around Waru, Juanda, Sedati,

Gedangan, and Buduran.

Therefore, PT. Sarana Dwi Makmur interest to manage it in order to build shop and warehouse.

Certain considerations of PT. Sarana Dwi Makmur when deciding to choose managing the

village land is participating in the o ptimal utilization of village land, thereby PT. Sarana Dwi

Makmur can support the concept of village management for the benefit of village community of

Ketahen village and surrounding area in developing and improving prosperity, as well as to

achieve the benefits of investments made.

In order to achive this objectives, this study examines the optimum utilization of village land by

using Highest and Best Use (HBU) method. The HBU method is the method that determines the

most physically possible, appropriately justified, legally permissible, financially feasible, and

the highest-yielding, which the concept is centered on the market value base(Wyatt, 2013).


270

Based on the preliminary observation results, reviewed on the basis of financial feasibility, the

industrial estate will always generate business transactions, where the business transaction will

integrate well if there are shop and warehouse.

Therefore, in rough calculations, PT. Sarana Dwi Makmur has calculated the value of

investment and the level of sales that may be achieved.

Table 1. The Estimation Value of Investment and Sales Value

Description Quantity Return

First investation Land area 25.000 m2 Gross profit rate:

Rp. 48.400.000.000

(49,19%)

Gross refund rate:

196,80%

Rental Value/m2 Rp. 2.000.000

amount of rental Rp. 50.000.000.000

Estimation Shop area 2 lt 5 x 16 m2

Number of shop 20 unit

Shop sales Selling price per unit Rp. 720.000.000

Sales value Rp. 14.400.000.000

Estimation Warehouse area 15 x 50 m2

Warehouse sales Number of

warehouse

24 unit

Selling price per unit Rp.3.500.000.000

Sales value Rp. 84.000.000.000

Sales total estimation Rp. 98.400.000.000

Source: the initial estimate author (2016)

The following Background as intended, can be briefly illustrated as the flowchart image below :

Figure 1. Background

LITERATURE REVIEW

Previous Research

Mubbayinah & Utomo ( 2012 )

Analysis Highest and Best Use ( HBU ) on the grounds of X, X is located in Dr. Soetomo

street 79 – 81 Surabaya, alternative of hotels. The high value of the grouds Rp. 13.148.307 / m2.

Industry and trade

area

Expansion area for (factory and

warehouse), trade

abandoned

Village asset in the name

of village land

Investor

Potency

Cooperation of KSO & BOT

study

HBU Method

Analysis

Physically

Possible

Legally

Permisissible

Financially

Feasible

Maximum

Productivity


271

Akmaludin & Utomo ( 2013 )

Analisis Highest and Best Use ( HBU ) of the grounds in Gubeng Raya street 54 Surabaya,

alternative commercial property hotels that have the highest and best use, with land values Rp.

67.069.980,31 /m2

Setiawan ( 2015 )

Revenue optimization of land village, in Batang Botindih Village, Rumbio Jaya District

Kampar District 2009 - 2013. Not achieving revenue targets due to unresolved Village

Regulations, low-level village officials to understand its TUPOKSI, lack of village government

initiatives to increase village original revenues, lack of community participation, and low public

education

Utami dan Utomo (2015) Analysis Highest and Best Use on vacant land in Ubud Tourism Area. The use of alternative

mix used between villa 60% and spa center 40% produce the highest and best value with

productivity increase of 829% and the value of land obtained is Rp 10,263,207 per m2

The Village Land

1. Law Number 6 year 2014, About the Village Law 6/2014 Article 1 point 1 explains that the

village "unity of the legal community which has the boundaries of the territory authorized

to regulate and administer government affairs, the interests of local communities based on

community initiatives, rights of origin, and / or traditional rights recognized and respected

in the system The government of the Unitary State of the Republic of Indonesia.

2. Permendagri Number 4 year 2007,About the management of Village Cash Land.

Permendagri 4/2007 Article 2 paragraph (1), explained that the village has village wealth in

the form of "village cash land, Village market, Animal market, boat mooring, village

building, fish auctions managed by villages.

Management and The Village Land

The management and utilization of village cash lands are regulated in legislation, from the

central to the local level, including the rural areas. This is because the village treasury is the

wealth or assets of the village that must be managed and utilized for as much as the prosperity

and welfare of the community.

1. Law 6/2014 About the Village

2. Permendagri 4/2007, Management Procedures of TKD

3. Village Head Decision approved by BPD, and received written permission from the Regent /

Mayor and Governor.

4. Cooperation KSO & BOT, is a cooperation with the principle of mutually beneficial sharing

between the government and partners / investors.

In the BOT procedure, the selected investor or contractor performs the design, construction,

operation (operanalization), and maintains the facility for a certain period in accordance with

the agreement. Such an approach increases the incentive and high quality of the project, as

the contractor is responsible for the operational activities of the facility built after the

construction period. The owner, in this case, does not share financial risks and financial

compensation, because the contractor as the manager who handles the payment and

financing (Hussey and Hall, 2008: 21; Buxbaum and Ortiz, 2009: 8)


272

Tabel 2. Difference between Model BOT and BTO in KSO

Source: Gunawan, 2013

Highest and Best Use (HBU)

The HBU method is the method that determines the most physically possible, appropriately

justified, legally permissible, financially feasible, and the highest-yielding land use , Whereby

the concept is centered on the market value base (Wyatt, 2013). The HBU of a property is

independent of subjective analysis, who the owner, developer or property appraiser though, but

this HBU is created due to the power of competition in the market where the property is located

(Akmaluddin and Utomo, 2013).

Friedman and Lindeman (2010: 201) gives the definition of the highest and best use model

following four criteria that must be implemented in analyzing the HBU model on land use,

namely that the concept of HBU is a concept that considers the use of vacant land or properties

most likely to be used Physically and legally, where the use of the land or property must be able

to provide the highest value.

Walton (2011: ch.3) HBU is that market value should be a consideration for the company in

making decisions regarding the rate of return on assets under the control of the company.

Wyott (2013: ch.8) The HBU method is the method that determines the most important use of

physical land (Physically possible), Appropriately Justified is legally permissible, and is

financially viable. Which gives the highest value, in which the concept is centered on market

value.

The four criteria that must be met in this model (HBU) are legal permisibility, physical

possibility, financial teasibility, and maximum profitability.

Maximum Productivity

Analysis of the maximum productivity value is the last stage of analysis performed by

comparing all the analysis results of the three analyzes that have been proposed. This is because

in the analysis one may not be able to match the results of the other analysis (Bone, 2006: 69;

Munizzo and Musial, 2011: 189). Thus, by benchmarking between the results of physically

Pihak BOT BTO

Investor Building on assets and / or business rights. Building on assets and / or

business rights.

Manage assets and / or business rights and

pay revenue share to the owner of the

assets and / or business rights.

Submit what has been built to the

owner of the assets and / or

business rights.

Submit the asset to the owner of the asset

and / or business right at the end of the

concession period.

Receiving revenue share from the

owner of the assets and / or

business rights during the

concession period.

Owner of the

asset

Submit the assets and / or business rights

to be managed.

Submit an asset or business right.

Gain revenue sharing Managing what investors have

built and periodically dividing

revenue.

Obtain all assets and / or business rights in

accordance with the agreement of the

investor at the end of the concession

period

Obtain all assets and / or business

rights in accordance with the

agreement of the investor at the

end of the concession period..


273

possible, legally permissible, and financially feasible analysis, final analysis can be performed

as an evaluation to determine the highest value and best use of the land.

1. Legally Permissible

2. Physically Possible

3. Financially Feasible

-

-

-

-

-

RESEARCH METHODS

Framework

Village land as village asset shoudbe used effectively and efficient in order to support village

development and social welfare. The government regulation has regulated the management of

village lands, either self-managed or managed by other parties. In the case of the involvement of

other parties, there are several concepts of cooperation that can be built through an operating

cooperation agreement (KSO). The option of the possible KSO form is the BOT or the

cooperation of building the handover as an alternative option that benefits the village side and is

also based on the limited funds owned by the village to build and utilize the village land.

In order to achive this principle, this research use Highest and Best Use (HBU) method, which

is the method that determines the most physically possible, appropriately justified, legally

permissible, financially feasible, and the highest-yielding, to the best utilization. Highest and

Best Use method in this research using 4 analysis, which are analisis legally permissible,

physically possible, financially possible, dan maximum productivity.

Figure 2. Framewok


274

Figure 3. Analysis Method

Research Appoarch

In this Research approach use applied research. The Applied research is the research included

teory application to solve certain problems ( Kuncoro, 2009:7). This applied research is a type

of research development that aims to develop village land optimally in Ketajen village,

Gedangan district, Sidoarjo

Research Location and Time

This research was conducted atKetajen village, Gedangan district, Sidoarjo. Implementation of

this research were carried out from Februay untill April 2016.

Sampling Methods

In this research using purposive sampling (taking sample randomly with certain criteria). The

main sample as key informan are Village Heads, Trade Developers, Shop Developers, one trade

manager, mismanagement manager, and local community

Data Collection Methods

Data Collection Method is done by Using 3 ways, which are interview (Indepth Interview)

observation and documentation.

Hig

hest

and

Best

Use

Me

thod

Legally Permissible

Physically Possible

Financially Feasible

ZoningLaws

Environment-related regulations

Regulation village asset management procedures

Aspects of KSO agreement and BOT requirements

Net Present Value

Interest Rate Return

Payback Periods

Maximum productivity

Property value

Possibility Indeks

Highest Values

Best utilization

Size

Location

Accessibility and Utilities


275

Table 3. Data Collection Method

No Analysis Unit Data

Type

Data

Source

Data Collection Methods

1 Legally permissible

a. Zoning laws Nominal Secondary UU Agraria 1960

Primer Interview (Head Village; Society;

Developer; Staff)

b. Environmental laws Nominal Secondary UU dan PP LH

c. Pedomanpengelolaan

kekayaan desa

Nominal Secondary UU 6/2014; Permendagri 4/2007;

village rule)

Primer Interview (head village)

d. Perjanjian KSO Nominal Secondary Draf taggrement KSO)

Primer Interview (developer of

warehouse and shop)

e. Prinsip BOT Nominal Secondary Draft BOT


warehouse and shop)

2 Physically possible

a. Area size Rasio Secondary Document (the goods of

ownership of village land)

b. location Nominal Secondary Document (map)

Primer Observation

c. Accessibility and Utilities

(accomodation,

transportation, public

facilities)

Nominal Primer Interview(Developer; staff)

Primer Observation

Secondary Document

3 Financially feasible

a. Investment cost Rasio Secondary Document

Primer Interview (Developer)

b. Interest rate Rasio Secondary Document

c. Estimated operational

cost

Rasio Secondary Document


warehouse/shop; Staff of

warehouse/shop)

d. Cost Estimated Rasio Secondary Document


warehouse/shop; Staff of

warehouse/shop)


276

Table 4. Data Management and Data Analysis Method

No Element Formulation Feasibility

1 NPV o

n

tt

Ik

CFt

1 )1(

NPV > 0, Project proposal

accepted

2 PP

PP <Investment Assessment

Period

3 IRR i1 + (i2-i1) x IRR >Required profit level

4 PI

PI > 1

5 NP

The highest NP

1. Data Management method

The data processing is done qualitatively and quantitatively. Qualitative process is used for

nominal data, while quantitative process is used for ratio data

2. Data Analysis

Data analysis performed sequentially on every aspect and facet element


Analilsis Highest and Best Use (HBU)

In the analysis of Highest and Best Use (HBU) there are four feasibility to be tested: Legally

Permissible Analysis, Physically Possible Analysis, Financially Feasible Analysis and

Maximum Productivity Analysis. Based on the results obtained by researchers in the field, the

test results of each criteria are summarized in Maximum Productivity Analysis and Financially

Feasible Analysis as follows:

Table 5

No Analysis Element Usefull Result Desicion

1 Legally

permissible

Zoning laws Warehouse Feasible - Land managemen in accordance

with UU Agraria No. 5 Th 1960.

- Rights of Commercial land

management in accordance with

Local Regulation of Sidoarjo

No. 4 Th 2003 village income.

- Approval of Head Village and

BPD as well as benefit for village

Home shop Feasible

Mixed

(warehouse

and Home

shop)

Feasible

Environmental

law

Warehouse Feasible - Enviromental license in

accordance with PP No. 27 Th.

2012.

- Building and architecturein

accordance with UU No. 28 Th.

2002.

- Preparation and licenceAmdal

UKL-UPL.

- Lay out preparation / Site plan

dan Design unit.

Home shop Feasible

Mixed

(warehouse

and Home

shop)

Feasible

Guidelines

management

Village wealth

Warehouse Feasible - In accordance with UU No. 6 Th.

2014.

- The utilization of village wealth

in accordance with Permendagri

No. 4 Th 2007.

- Management of regional goods

Home shop Feasible

Mixed

(warehouse

and Home

shop)

Feasible


277

Permendagri No. 17 Th 2009.

- Cooperation of KSO, BOT for 30

tahun.

2 Physical

Possibility

Land area and

Topography

Warehouse Feasible - 25.000 m2 , 19.600 m2 physical

building, 5.400 m2fasum.

- entering the strategic area part of

f the central part of Kab.Sidoarjo

(40.81%

- the height of 3-10 m from sea,

- The highest economic potential

of the region di Sidoarjo.

Home shop Feasible

Mixed

(warehouse

and Home

shop)

Feasible

Land location

Warehouse Feasible - Entering development SSWP I

area (central of development)

- The settlement, industry and

trade area (local, regional

daninternasional).

- The position located on the zero

road.

Home shop Feasible

Mixed

(warehouse

and Home

shop)

Feasible

Easy access

Transportation

Warehouse Feasible - Availability of public

transportation, strategic area,

close to highway, railway station,

etc

Home shop Feasible

Mixed

(warehouse

and Home

shop)

Feasible

Availability of

accommodation

Warehouse Feasible - Entering the territory of the

Order group K1 is the best

accessibility area

- Availability of market,

supermarket, settelement,

medical facilities, recreation

facilities/ sport station, school,

etc

Home shop Feasible

Mixed

(warehouse

and Home

shop)

Feasible

Availability of

public facilities

Warehouse Feasible - Availability of electricity,

telephone, water supply, gas

station, house of worship,

hospital, restaurant, etc

Home shop Feasible

Mixed

(warehouse

and Home

shop)

Feasible

3 Financial

Feasibility

NPV Mixed

(warehouse

and Home

shop)

Feasible - The value of NPV on both land

has been feasible because it has

positive value, which has Rp.

27.034.646.000

PP Mixed

(warehouse

and Home

shop)

Feasible - - The PP value on both land is 16

months and shorter than the

investment period for 24 months.

IRR Mixed

(warehouse

and Home

Feasible - IRR value of 16.8% greater than

the required interest rate.


278

shop)

PI Mixed

(warehouse

and Home

shop)

Feasible - The PI value of the two fields is

1.54 so feasible as more than 1.

NP Mixed

(warehouse

and Home

shop)

Feasible - The largest NP value is in the last

period of investment ie period 24,

which is

- Rp. 4,748,455,285

Table 6. Discussion of Financial Aspects Analysis

Discussion of the Most Optimum Property Analysis Results

Based on the calculation results obtained the most optimum properties in the Village Land Use

Ketajen, District Gedangan, Sidoarjo is warehousing. This reason is because the selling price

per unit is bigger than Ruko, that is @ Rp. 3.500.000.000, - = Rp. 84.000.000.000, -.

Meanwhile, Home store Selling price per unit @ Rp. 720.000.000, - = Rp. 14.400.000.000, -. To

that end, PT. Sarana Dwi Makmur uses the concept of sales with mixed or combined with the

ratio of land area of 8: 1 for warehouse and home store. This is done to attract buyers faster.

CONCLUSION

Based on the results of research and discussion of the study of management of Village Cash

Land using Highest and Best Use Desa Ketajen, Gedangan, Sidoarjo District can be summarized

as follows:

1. Management of Village Land existing in the Village Ketajen, District Gedangan,

Sidoarjo using Highest and Best Use method can be said optimally. This looks good in

terms of legal feasibility, physical feasibility, financial feasibility, and maximum

productivity in a decent category all well from warehousing and shop construction projects.

In other words, the return on investment is very reasonable because of the very fast rate of

return. This is very beneficial for the developer or investor.

2. Based on the calculation results obtained the most optimum property in the Village

Land Use Ketajen, District Gedangan, Sidoarjo is a complex of warehousing. This is

because the warehousing complex is the most potential and appropriate land use to be

Conditions Rule Value Analysis Result

NPV NPV > 0 Rp. 27.034.646.000,- NPV is positive,

investment is feasible

IRR IRR > Specified

interest rate

16,80% IRR is bigger than

interest rate, investment

is feasible

PP Payback Period <

optimum time

16 months at the

beginning of the 24

month period

PP is faster than project

time, investment is

feasible

PI PI > 1 1,54 PI is bigger than 1,

investment is feasible

NP The biggest NP Periode 24

Rp. 4.748.455.285,-

Biggest NP in period 24


279

implemented in the research location. This condition can happen because Sidoarjo region is

fishery industry area and Gedangan sub district has wide area of land for industrial sector

bigger than other sub-district, that is 122,906 Ha (± 10% from total area of industrial area

of Sidoarjo).

3. The profit potential and the rapid return of investment value from the results of this

research, can provide initial information for prospective investors or property business

developers to glance, respond and develop opportunities management of Village Land. For

beginner or start-up business, this research can be a triger, booster that the opportunity of

cooperation with such a model, is still wide open with all the potential segments that exist

without having to exit large capital costs.

4. In the investment concept, the main aspect to be considered is the aspect of financial

feasibility (a top priority of investment consideration).

REFERENCE

Akmaluddin & Christiono Utomo. 2013. Analisis Highest and Best Use (HBU) pada Lahan Jl.

Gubeng Raya No. 54 Surabaya. Jurnal Teknik Pomits Vol. 2, No. 1, (2013): C-6-C10.

Arifin, Johar. 2008. Aplikasi Excel Untuk Perencanaan Bisnis. Jakarta: Elex Media Komputindo.

Creswell, John W. 2010. Reseach Design: Pendekatan Kualitatif, Kuantitatif, dan Mixed., Edisi

ketiga. Yogyakarta: Pustaka Pelajar.

Gunawan, Johannes. 2013. Perjanjian Di Luar KUH.PerdataPerjanjian Kerjasama Operasi dan

Kontrak Karya. Makalah disampaikan pada Pelatihan Tematik Hukum Acara Perdata

Bagi Hakim di Lingkungan Peradilan Umum, Bogor, 13 Juni 2013. Komisi Yudisial

Republik Indonesia.

Husnan, Suad & Suwarsono Muhammad. 2014. Studi Kelayakan Proyek Bisnis. Yogyakarta :

UPS STIM YKPN.

Kuncoro, Mudrajad. 2009. Metode Riset untuk Bisnis dan Ekonomi. Edisi ketiga. Jakarta:

Erlangga.

Kuncoro, Wahyu. 2015. 97 Risiko Transaksi Jual Beli Properti. Jakarta: Raih Asa Sukses

(Penebar Swadaya Grup).

Mubayyinah, Miftahul& Christiono Utomo. 2012. Analisa Highest and Best Use(HBU) Lahan

“X” untuk Properti Komersial. Jurnal Teknik ITS Vol. 1, No. 1, (Sept. 2012): D-16 – D-

19.

Munizzo, Mark A. &Lisa Virruso Musial. 2009. General Market Analysis and Highest and Best

Use. Mason, OH: Cengage Learning.

Rangkuti, Freddy. 2012. Studi Kelayakan Bisnis & Investasi. Jakarta : Penerbit Gramedia

Pustaka Utama

Setiawan, Yoga. 2015. Optimalisasi Pendapatan Tanah Kas Desa di Desa Batang Batindih

Kecamatan Rumbio Jaya Kabupaten Kampar Tahun 2009-2013. JOM Fisip, Volume 2

No. 2 Oktober 2015: 1-15.

Sugiyono. 2012. Metode Penelitian Kuantitatif, Kualitatif, dan R & D. Bandung: Alfabeta.


280

THE EFFECT OF BRAND IMAGE AND SERVICE QUALITY ON

PERCEIVED VALUE AND BEHAVIORAL INTENTION

(EMPIRICAL STUDY IN CULINARY BUSINESS UNIVERSITAS

CIPUTRA)

1Azaria Anindita Pandu’u

INDONESIA


ABSTRACT

This study aims to determine the relation of brand image, service quality, perceived

value, and behavioral intention in the concentration of Culinary Business of

Ciputra University, Surabaya. The object of this research is the Culinary Business

150 students of Ciputra University who have taken the lectures for at least one year

and have filled out the questionnaire. This research uses quantitative approach

with data collection technique of Structural Equation Model (SEM) based on

variant that is statistical technique of Partial Least Square (PLS). The results of

this study indicate that the variables of brand image and service quality give effect

on perceived value variable; And perceived value variable influences behavioral

intention variable. In contrast, brand image and service quality variables do not

directly affect behavioral intention variable, but indirectly affect behavioral

intention variable which is mediated by perceived value variable. The implications

of this research are: (1) planning and curriculum development in Culinary Business

of Ciputra University; (2) planning and marketing strategy in accordance with

perceived value received by students; (3) the performance of employees in order to

provide quality services; and (4) for educational institutions as well as companies

engaged in services in taking strategic policy.

Keywords: Brand image, service quality, perceived value, behavioral intention

INTRODUCTION The high demand of Human Resources by companies in Indonesia makes people compete to

pursue the highest level of formal education. A view of 'the higher formal education can

guarantee success is inherent in the mind of society mostly. This makes private and non-private

education institutions thrive, especially in big cities. Along with the high development of formal

education, especially universities, it makes competition among universities become more

competitive.

According to the Rector of Gadjah Mada University, Sofian Effendi, in an article entitled 'The

Management of Higher Education in Facing Global Challenges' (2003), universities have two

main tasks: to educate the nation's children to master the knowledge and the sophisticated

technology, as well as to educate them to become high-moral and democratic-culture leader

candidates. Each university is required to produce graduates who not only master the academic

field, but also have qualified skills. Therefore, University of Ciputra, as a university that teaches

entrepreneurship values in each department, also contributes to prepare the next generation of


281

the nation who also has a good skill so as to compete with graduates from other universities in

Indonesia.

Ciputra University has four faculties, including Faculty of Economics, Faculty of Engineering &

Design, Faculty of Psychology, and Faculty of Tourism. As the proof of Ciputra University's

awareness of culinary business progress, Ciputra University provides a major in Culinary

Business (CB). The department has been in existence since 2011, along with the establishment

of International Hospitality & Tourism Management majors. Both majors were under the

Faculty of Economics, and then in 2014, Faculty of Tourism was established, which now covers

these two majors. In the department of Culinary Business, the students not only master the

academic field, but also are equipped with qualified skill in the culinary industry. The mission

of entrepreneurship which was initiated by Ir. Ciputra also increasingly equips the ammunition

of students who study Culinary Business at Ciputra University. From its establishment until the

batch of 2015, Culinary Business has successfully taught 392 students. The successive increase

of the 2012, 2013, and 2014 indicating the interest of prospective students to the lectures that

raised the culinary industry is more growing. The department of Culinary Business also

contributes in generating public trust in this department. It is shown by the synergy between

lecturers and students which are very strong. Students who become the members of the Students

Association (HIMA) actively make interesting events to public, so that people can feel the

lectures in the department of Culinary Business.

According to the World Trade Organization, it is mentioned that one of 12 major categories of

services, schools, universities, training, and development is included in the education services.

Culinary Business, as an educational service provider, is obliged to pay attention to the quality

of service that has been given, whether it has fulfilled customers satisfaction or not, (Tjiptono &

Chandra, 2011). The intended customers are the students who have been or are currently

studying at Culinary Business.

In recent years, many culinary schools have sprung up in Surabaya. In fact, among the new

culinary schools, some are in the area of West Surabaya, which is the area of Culinary Business

of Ciputra University. One of the ways taken in order that a company's sales is better than to its

competitors is by providing quality and prime services that meet the level of consumers interest.

Culinary Business is required to meet the needs of the students as well as the students to-be. The

emergence of several new culinary schools makes Culinary Business, as one of the institutions

teaching the culinary business, should create a different service strategy. According to

marketing.co.id, good customer service is a competitive advantage and can increase sales,

improve customer loyalty, and provide a good image to potential customers. By providing

quality services; Culinary Business students feel satisfied that they have been educated in

Culinary Business, and student candidates can choose Culinary Business as their preferred

culinary institution.

In addition to quality of service, the researcher is interested in figuring out the brand of Culinary

Business. Brand is a name, term, sign or symbol, design, color, motion, or combination of other

attributes that are expected to give identity and differentiation to foreign products. (Tjiptono,

2011) Culinary Business builds its name under Ciputra University within six years since its

establishment. Culinary Business (CB), in Indonesian, means business of culinary. Culinary

Business offers an undergraduate program that teaches about the intricacies in the culinary field

coupled with business education.


282

Consumers who have a positive image of a brand will be more likely to make a purchase.

According to Kotler and Keller (2016), creating a positive brand image requires a strong,

profitable and unique marketing program in brand memories. Consumers know the

characteristics of the product or service they buy by looking at the image of the product. When

consumers capture a positive image, then consumers will not hesitate to buy it. Therefore,

brand image becomes very important for educational institutions because if the institution is

able to provide a positive image for consumers, the institution will be more easily selected for

the to-be students. Through a brand image, Culinary Business of Ciputra University is able to

communicate its trademark to the community.

From several statements aforementioned, the research problems can be taken which include: 1)

does the brand image of Culinary Business influence perceived value?; 2) does the service

quality of Culinary Business Ciputra University affect perceived value?; 3) does Culinary

Business brand image affect the behavioral intention?; 4) does service quality of Culinary

Business Ciputra University influence behavioral intention?; 5) does perceived value influence

behavioral intention?

The purposes of this research are 1) to examine the influence of Ciputra University Culinary

Business brand image towards perceived value, 2) to examine the influence of service quality of

Ciputra University Culinary Business towards perceived value, 3) to examine the influence of

Ciputra University Culinary Business brand image towards behavioral intention, 4) to examine

the influence of Ciputra University Culinary Business service quality towards behavioral

intention, 5) to examine the influence of perceived value on behavioral intention.

RESEARCH METHODS This research applies quantitative approach; that is a research method based on the nature of

positivism, usually used to examine the population or sample first. Data collection uses research

instruments; data analysis is quantitative/statistical, with the aim to examine the predefined

hypothesis (Sugiyono, 2016). The type of research used is explanatory research which will be

used to explain the causal relationship between the variables through hypothesis testing. In this

research, there are two kinds of variables used, namely independent variables that include brand

image and service quality; and dependent variables that include perceived quality and

behavioral intention. Furthermore, in the present study, the researcher analyzes the data that

have been collected by using Structural Equation Modeling (SEM) Partial Least Square program

with Smart PLS software. SEM-PLS is a multivariate statistical technique that performs the

comparison between multiple dependent variables and multiple independent variables. PLS is

one of the SEM statistical methods designed to solve multiple regression when specific data

problems occur, such as small sample size, missing values and multicolinearity (Abdillah, 2015).

The researcher uses this model because of the structure of tiered relationships between variables,

so Smart PLS software is the most appropriate for this research.

SEM-PLS analysis usually consists of two sub models: measurement models or often called

outer models and structural model (structural models) or often called inner model (Ghozali,

2015). In the outer part of the model, the researcher analyzes the indicators that represent the

latent variables that will be measured; while in the inner model, the researcher analyzes the

influence between latent variables or constructs. SEM has two kinds of relationships between

indicators and latent variables reflective models and formative models. The reflective model

reflects that each indicator is a measurement of the error imposed on the latent variable. The

causal direction is from the latent variable to the indicator; thus, the indicators are a reflection of

the variation of the latent variables. Besides, the model of formative relationship is a causal


283

relationship coming from the indicator to the latent variables (Sarwono, 2015). The steps of

using the PLS method can be seen in Figure 1.

Figure 1. Steps of the PLS method Source: (Kurnia, 2011)


Result

Hypothesis Testing Result The structural model of research can be seen in Figure 2.

Figure 2. Structural model

To see the effect of independent variables to dependent variable based on t-statistic, it can be

seen in Table 1 that shows the Path Coefficient.


284

Table 1. Path coefficient on structural model testing

Original

Sample

(O)

Sample

Mean

(M)

Standard

Deviation

(STDEV)

T Statistics

(|O/STDEV|)

P

Values

Brand Image ->

Behavioral Intention

0.045 0.038 0.075 0.600 0.275

Brand Image ->

Perceived Value

0.124 0.128 0.056 2.205 0.014

Perceived Value ->


0.689 0.675 0.089 7.742 0.000

Service Quality ->


0.112 0.131 0.098 1.143 0.127

Service Quality ->

Perceived Value

0.749 0.749 0.050 14.911 0.000

Based on the value of Beta Coefficient and T-statistic values above, then the test results for each

hypothesis are as follows:

Hypothesis 1: Stating that Ciputra University Culinary Business brand image significantly

influences perceived value. The calculation results show that Ciputra University

Culinary Business brand image has a significant positive effect on perceived

value with beta coefficient value of 0.124 and t-value of 2.205. The better the

brand image of Ciputra University Culinary Business, the better the perceived

value those consumers receive. This means that the first hypothesis is supported.

Hypothesis 2: Stating that service quality of Ciputra University Culinary Business significantly

influences perceived value. The calculation results show that service quality

variable of Ciputra University Culinary Business has positive significant effect

to perceived value with beta coefficient value of 0.749 and t-value of 14.911.

The better service quality of Ciputra University Culinary Business, the better

the perceived value the consumers receive. Therefore, the second hypothesis is

supported.

Hypothesis 3: Stating that brand image of Ciputra University Culinary Business has no

significant effect on behavioral intention. The calculation result of brand image

variable of Ciputra University Culinary Business reveals that behavioral

intention has coefficient value of 0.045, but the shown t-value does not reach

the required number which is 1.96, so brand image variable of Ciputra

University Culinary Business has no significant effect toward behavioral

intention. Meaning that, the third hypothesis is not supported.

Hypothesis 4: Stating that service quality of Ciputra University Culinary Business has no

significant effect on behavioral intention. The calculation result of service

quality variable of Ciputra University Culinary Business shows that behavioral

intention has coefficient value of 0.112 and t-value of 1.143. The indicated

value does not reach the desired number of 1.96, so service quality variable of

Ciputra University Culinary Business does not significantly influence

behavioral intention. It means that the fourth hypothesis is not supported.

Hypothesis 5: Stating that the perceived value of Ciputra University Culinary Business

significantly influences behavioral intention. The calculation result shows that

perceived value variable of Ciputra University Culinary Business has positive

significant effect toward behavioral intention with beta coefficient value of


285

0.689 and t-value of 7,742/ The better the perceived value of Ciputra University

Culinary Business, the better the behavioral intention of the consumers. It

indicates that the fifth hypothesis is supported.

Indirect Effect Testing

In this research, there is one variable that functions as a mediation variable, namely perceived

value. With mediation variable, the value of mediation will be obtained. The mediation relation

is obtained from the multiplication of direct relationship coefficient between the first variable

and the second variable. Here is the pattern of indirect relation, in this study, and its comparison

to direct effect:

Table 2. Indirect relation and its comparison to direct effect

Indirect

Relation

The Origin of

Coefficients Value

Indirect

Coefficients

Direct

Coefficients

Total of

Effect

Brand Image ->

Behavioral

Intention

Brand Image ->

Perceived Value ->

Behavioral

Intention

0.124 x 0.689 =

0.0854

0.045 0.1304

Service Quality

-> Behavioral

Intention

Service Quality ->

Perceived Value ->

Behavioral

Intention

0.749 x 0.689 =

0.5161

0.112 0.6281

Based on the comparison table between the direct and indirect relation above, the comparison

between direct and indirect coefficients is shown. The indirect relation is the total effect of the

sum of indirect coefficients with the direct coefficients. Indirect coefficient of brand image and

behavioral intention variables compared to direct coefficients is in fact higher than indirect

coefficients. Similarly, in the comparison between service quality and behavioral intention

variables, indirect coefficients have larger numbers than indirect coefficients.

Discussion

The Effect of Brand Image Variable towards Perceived Value Based on the description of data, after conducting some methods in SEM-PLS, it is found that

there is a significant effect between brand image variable to perceived value variable. This can

be seen based on the result of t-statistic value in the table of path coefficient (in Table 1),

indicating that there is a significant positive effect between the two variables. Based on the

image of path analysis, its effects can also be seen by obtaining the coefficient values the effect

of brand image to perceived value which is 0.124. It is also in accordance with some of the

previous studies conducted by Ryu et al. (2012) Lai and friends stated that the brand image of a

company strongly affects the perceived value received by consumers, as well as to customer

satisfaction so that it becomes a key of customer loyalty. Another study conducted by Yu et al.

(2013) found the same thing that the brand image of the company has a direct effect and greatly

affect perceived value received by consumers.

Based on the three indicators studied (in Table 1) in the brand image variable, it is found that

brand characteristic has the highest value of effect, that is with the coefficient value of 0.880.

The indicator of brand association also has a fairly high coefficient value which is 0.835. It can

be interpreted that the construct of brand image can be reflected through indicator of brand


286

characteristic and brand association. While, in this research, the indicator of brand value is not

valid, so the researcher must put away the indicator.

Brand image is a dimension that strongly affects the perceived value received by consumers, yet

it must be supported by the things that have been taught by Ciputra University-Culinary

Business to the students. According to Yu et al. (2013), a company must have a positive brand

image and focus on building long-term and mutually beneficial relationships with its consumers,

as well as make consumers’ loyalty as a competitive advantage value for the company. So far,

the constraints related to brand image of Ciputra University-Culinary Business is the absence of

a strong-enough image. It is seen from how Ciputra University-Culinary Business

communicates regarding the characteristics and associations of Ciputra University-Culinary

Business brand itself to the public. One of the things that are quite striking related to the brand

association is the color similarity between Culinary Business and Psychology Department of

Ciputra University. It does look trivial, but by having specificity, then the department of Ciputra

University-Culinary Business can be more easily remembered by its customers.

Another constraint is the existence of a large gap since Ciputra University-Culinary Business

stands; in which it happened between Ciputra University-Culinary Business team and the

marketing team. Actually, there have been many efforts done in the form of breakthroughs that

have been given by Ciputra University-Culinary Business team and marketing team in order to

strengthen the brand image and bridge the gap, such as by making a powtoon video containing

about learning in Ciputra University-Culinary Business, Instagram social media use controlled

directy by the department, and many other things. However, the perception of respondents who

have been studying for about one year (class of 2012, 2013, and 2014) in Ciputra University-

Culinary Business still feel that what the respondents have heard before entering Ciputra

University-Culinary Business is different from what they received in Ciputra University-

Culinary Business.

In this case, Ciputra University-Culinary Business is expected to communicate brand

characteristic and brand association best to avoid any gap between consumer perception before

entering Ciputra University-Culinary Business and perceived value that will be accepted by

consumers later. The name of Ciputra University-Culinary Business which is easy to remember,

the education which is known having good quality, brand color and learning system prioritizing

creativity becomes the components that reflect the indicators.

The Effect of Service Quality Variable towards Perceived Value Based on this research, it is found that service quality significantly influences perceived value. It

can be seen from the t-statistic result (on Table 1) revealing that service quality has significant

effect on perceived value. The same thing can be seen from the image of path analysis, in which

its coefficient value from the effect of service quality to perceived value is 0.749. The value is

the highest value of effect compared to the influence among other variables in this research

model.

In the variable of service quality itself, the researcher uses five SERVQUAL indicators found in

1988, (Zeithaml & Parasuraman, 2014). Numerous studies have used these indicators to assess

service quality in many industry sectors; so that the indicator of the service quality variable is a

formative variable, in which in order to reflect a quality service, then the five indicators should

be achieved well. In this research, in fact, it is found that there is one invalid indicator that is

indicator X2.2 empathy; but the researcher keeps these five formative indicators, and concludes

that the empathy does not significantly affect the service quality construct and still tests the


287

indicators in the structural model. The research conducted by Xu et al (2009) revealing that

SERVQUAL indicators were used as well as formative indicators. When looking at the validity

test results of these indicators, it was found that the weight and t-statistical significance of some

indicators, such as assurance, empathy, and tangible, were also invalid. Abdillah (2015: 225)

states that in the formative indicators, the invalid indicators are better not to be used. However,

if those can cause construct become meaningless and the research lose its research aim base,

then theoretically the construct still can be tested in structural model.

Although there are negative indicators, it does not affect the coefficient value of service quality

effect on perceived value. The findings in this study also support previous studies. Based on two

previous studies that examine and find the same result, it stated that there is a very significant

influence of service quality variables on perceived value received by consumers. The first study

was found in a journal written by Raza et al. (2012), who found that a good quality of service

extremely affected perceived value. The same thing is also found in other studies, that a

company should be able to manage the quality of service very well because it will affect the

perceived value received by consumers. (Yu et al , 2014) If the consumers already have a

certain expectation and the company has not been able to provide it, then perceived value

received by consumers will be negative. The problem of service quality from Ciputra

University-Culinary Business is related to kitchen facilities. Actually, Ciputra University-

Culinary Business has a complete kitchen facilities, but in order that the students can practice

hands-on freely, culinary studio is usually used (especially for batch which being researched).

Culinary studio itself has 12 stalls, where each stall is equipped with very-adequate kitchen

equipment.

The number of students in one batch is 60-100 students, so the lecturer usually has to divide the

culinary studio usage schedule into two to four in each batch; it all depends on the number of

students in the batch. One stall consists of 4-6 people, in which number is not ideal. The ideal

number for students in one stall is 2-3 people, so each student can share the assignment in mise

en place until the stall returns as clean as before. In one practice, the students need

approximately 4 - 5 hours; so that in 4 days of effective lecture (excluding Wednesday), kitchen

is used by 4 semesters with varying number of students. The addition of kitchen facilities is very

important because it directly affects the perceived value of students. Moreover, the use of

kitchen now must be divided by the specialization of International Hospitality & Tourism

Business of Ciputra University, so that Ciputra University-Culinary Business students’ needs for

kitchen facilities are in an urgent state.

The Effect of Brand Image Variable towards Behavioral Intention The result of t-statistic shows that brand image does not give direct effect on behavioral

intention. In addition, the result of the path analysis diagram is the same, that it obtained the

coefficient value from the effect of brand image on behavioral intention is only 0.045. It is

contrasting with previous studies which stated that there is a significant effect of brand image on

behavioral intention. The previous relevant research related to the effect of brand image on

behavioral intention conducted by Ryu et al. (2011) found that brand image indirectly affects

the behavioral intention in the culinary industry. However, he did not conduct a research about

the relationship between the effects of brand image towards behavioral intention directly. There

are several factors that make a difference in the results of research with previous studies. The

main factor is that previous research concerned on different industries with this research.

Previous research examines commercial firms, which are the hospitality industry and the

wireless communications industry. It is extremely different from the object of this study which

focuses on the effect of brand image on behavioral intention in education. The second factor that


288

leads to the difference of research is that in this study, the behavioral intention theory studied

focuses on the post purchase, so that it is different from previous studies that discuss about

behavioral intention in general. Thirdly, the thing that influences the difference of research is

that the sample of this research comes from a very heterogeneous background, so that the

possibility of perception of brand image in each student can be different as well. In the present

research, taking Culinary Business students as the research objects, who have different

backgrounds, would have an impact on many differences of perceptions had by each student in

perceiving Ciputra University-Culinary Business image. It is indicated by this research data that

brand image indirectly affects the variable of behavioral intention mediated by the variable of

perceived value.

For Ciputra University-Culinary Business students themselves who have attended Culinary

Business, they feel that the effect of brand image on behavioral intention is also less significant.

Different things happen if perceived value is there as a mediation variable, then the brand image

itself will have more effects on behavioral intention indirectly; because the students themselves

have obtained values from Ciputra University-Culinary Business directly, so it affects students’

behavioral intention.

The Effect of Service Quality Variable towards Behavioral Intention The findings of this study reveal that service quality variable does not directly affect behavioral

intention. It is shown by the quantity of the existing non-qualified t-statistic results and the path

analysis diagram also shows the same thing. The coefficient value is 0.112. However, the other

finding is that service quality indirectly affects behavioral intention. It can be seen that service

quality needs to be mediated with perceived value variable, so that it can have higher effect on

behavioral intention.

The findings of this study are in line with previous research conducted by Jankingthong &

Gonejanart (2012) stating that service quality has an indirect effect on behavioral intention;

while, the previous study found that not all service quality dimensions affect repurchase

intention (In this case it is an indicator of behavioral intention). Only three dimensions that

affect repurchase intention, namely the dimensions of reliability, empathy, and tangible. This

difference occurs because of industry differences of the researched objects. The second reason

that influences the difference of research is that the sample of this research is taken from a very

heterogeneous background, so that the perception possibility of service quality in each student

can be different as well.

The results of research on Ciputra University-Culinary Business students show that it will affect

student behavioral intention indirectly. The students obtain the values of service quality first in

perceived value, only then it can affect students’ behavioral intention; because service quality

itself is an evaluation of the service quality that students get during this time, while students are

able to determine their attitude in behavioral intention after perceiving values received by

students (perceived value). If compared to brand image, service quality is slightly more

influential on behavioral intention.

The Effect of Perceived Value Variable towards Behavioral Intention The findings got from t-statistic show that the perceived value variable significantly affects the

behavioral intention. Based on the path analysis diagram, coefficient value obtained from the

effect of perceived value on behavioral intention is 0.689. The perceived value variable in this

study is also a mediator variable that mediates the brand image and service quality variables

towards the behavioral intention variable. There are two indicators in the behavioral intention


289

that are not examined: firm switching and native word of mouth. It comes to the confusion of the

students, so that the results obtained are invalid. The students feel unable to do these negative

things because it is not easy for those who have entered Ciputra University-Culinary Business to

move to other universities or other educational institutions and also give negative testimony

about Ciputra University-Culinary Business, while the students themselves still study there.

The effects of these two variables support previous research which is the research conducted by

Chaohui et al. (2012). The research found that perceived value, received by the tourists who

come to Shanghai World Expo, affects significantly on behavioral intention of tourists in the

future. Ciputra University-Culinary Business should provide things that meet the needs of

consumers, and then it will affect the behavioral intention of consumers themselves. Another

study was conducted by Zhuang et al. (2010). In that research, the researchers divided perceived

value into two variables, namely acquisition utility and transaction utility. In the study, only

acquisition utility significantly affects behavioral intention. The acquisition utility is an

evaluation of what consumers receive and what consumers pay.

Based on the description of the perceived value variable itself, the lowest mean value is in the

Y1.4 indicator regarding functional value (price). Ciputra University-Culinary Business students

found that what they have received so far during their learning process in Ciputra University

greatly affects their behavioral intention. For students who are satisfied with what they get at

Ciputra University-Culinary Business, the students will do a positive behavioral intention,

which is by talking positive things about Ciputra University-Culinary Business to others, to be

loyal to CB-UC by recommending such partnership around him, and also invites his siblings to

study at CB-UC.

CONCLUSION

From the results of research conducted, the conclusions of this study include: 1) Variable of

brand image significantly affects the variable of perceived value received by students at Ciputra

University Culinary Business, 2) Variable of service quality significantly affects the perceived

value variable received by students in Ciputra University Culinary Business, 3) Variable of

brand image has no significant effect on behavioral intention variable; but it indirectly affects

the behavioral intention variable mediated by perceived value variable in Culinary Business of

Ciputra University, 4) Service quality variable has no significant effect on behavioral intention

variable; but it indirectly affects behavioral intention mediated by variable of perceived value at

Culinary Business of Ciputra University, 5) Variable of perceived value significantly affects

behavioral intention variable at Culinary Business of Ciputra University.

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ANALYSIS OF CONSUMER BEHAVIOR IN CHOOSING RICE

PACKAGING OF BRANDS

“ALAMI, PAK TANI AND PADI” (COSE STUDY AT RAHMA

JAYA STORE MOJOKERTO CITY).

1Budi Utomo, 2Muri Hardiyanto, 3Sri Purwanti

1-2Faculty of Agriculture University Mayjen Sungkono Mojokerto

3Faculty of Agriculture University Merdeka Surabaya

INDONESIA

Emails: [email protected], [email protected], [email protected]

ABSTRACT

The general target policy as well as the specific direction of agricultural

development strategies developed through the modernization of agriculture,

with modernization expected to increase productivity and farmer income,

which in turn will reduce the gap between farmers. The modernization of

agriculture is manifested through the linkage of business, namely the

existence of big business cooperation (modern) and small (traditional)

business. The linkage of business in the agricultural sector is described in

the form of agroindustry and agribusiness. This research tries to do

emphasized on analysis of consumer behavior of rice packaging which is

liked and have high market share in mojokerto city and consumer tendency

to consume certain kind of rice in the future.

Research purpose: 1) Identifying the characteristic of end consumer

packaging rice includes the aspect of brands ( Alami, Pak tani and padi) in

Rahma Jaya store at Mojokerto city. 2) Analyzing the dominant factors

that affect the behavior of end consumers (price, quality, distance, service

and packaging) to buy rice packaging at Rahma Jaya store Mojokerto city.

The basic method of this research is Fishbein Model. The data presented in

the form of symbols that representing final consumer attitude buyers of a

product or brand products. Data Analysis used in this research is the

analysis of Fishbein Model. 1) Incorporate a scoring table on every

questioner drawn from respondents to be analyzed. 2) Analyzing the

attitude of each respondent per brand product. 3) Creating a marketing

strategy for the product after learning the value attitude of the analysis

results Fishbein method.

The results showed: The behavior of consumers towards the brand

packaging rice Alami, Pak Tani and Padi gain biggest selection portion of

100 (one hundred) respondents are trademarks Pak Tani are based on the

total attitude score (bi x ei) amounted to 48.59 with Intresprestsi brand

likes. Second Ranked is Padi brand with the total value (bi x ei) amounted

to 45.66 with Interpretation Regular, Alami brand followed by the total

value (bi x ei) amounted to 43.04 Interpretations is unfavorable.

Analysis model of Fishbein of the trust and evaluation of consumer

attitudes on packing rice produce several strategies to increase products

sales based on the results of research and discussion can be concluded as :





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1) The product of Pak Tani packing rice obtained by total value based on

attitude toward object on the basis of Trust Value and its Evaluation is

equal to (48.59) with Interpretation of Very Likes, Padi Brand Product

obtained by total value (45.66) with Interprestasi Likes and followed by

Alami Brand Product with Total value of (43.04) with Average

Interpretation Only. Thus product Brand Pak Tani is the Brand of the most

in demand by Consumers compared with the Second Brand Other Rice

Packaging Products. 2) Consumer packaging rice Alami Brand, Pak Tani

and Padi, have different behavior based on attitudes toward the object

(consumer fanaticism), the dominant factor affecting End Consumer

Behavior on Packaging Rice Product First is Brand Pak Tani with

Interpretation Very Likes to Attribute of Quality (15.55), and Likes to Price

and Service respectively (9,98) and (8,33), Second order of Padi Brand

with Interprestasi Likes to attribute Quality, Price and Service,

respectively (12 , 02), (10,15) and (10,06) and followed by Alami Brand

with Interpretation of Very Likes to Price attribute (14,69), and Likes to

Quality attribute (11,18).

Keywords: Consumer behavior

INTRODUCTION

The general target policy as well as the specific direction of agricultural development strategies

developed through the modernization of agriculture, with modernization expected to increase

productivity and farmer income, which in turn will reduce the gap between farmers. The

modernization of agriculture is manifested through the linkage of business, namely the existence

of big business cooperation (modern) and small (traditional) business. The linkage of business

in the agricultural sector is described in the form of agroindustry and agribusiness (Rustiani,

1995).

Agribusiness systems are grouped into sub-systems of production facilities, sub-farming

systems, sub-processing systems, and marketing sub-systems. Successful development of

agribusiness system depends on the effort to integrate the linkage between agribusiness actors in

each sub-system.

Agribusiness actors in Indonesia can be structurally divided into 2 groups. First, the

agribusiness system is played by big companies, state-owned and private companies that have

characteristics of high technology use, large capital, and good managerial skills. Second, small-

scale agro-business actors dominated by small farmers characterized by various resource

constraints, including: nature, capital, the use of simple technology, and inadequate managerial

capabilities, and with limited access to markets and information technology.

In the era of globalization, Indonesia can not be separated from the influence of information,

culture and technology of developed countries, with increasing economic growth in Indonesia,

resulting in changes in consumption patterns, especially rice in big cities. Rice is the main food

commodity of the people of Indonesia, its needs in all regions will increase as the population

will increase annually.

Rice consumption is a potential market share, can be an indicator of the demand for rice

packaging market, both in terms of quality and diversity of products of interest. The tendency of

consumers to use products that are practical, inexpensive and have sufficient nutritional value

and fast service, now become the lifestyle of the community.

The importance of rice can not be denied as the main staple food in this country with the

participation rate of rice consumption reaches about 95% meaning 95% of households in

Indonesia consume rice, this participation rate certainly varies from one region to another

(Amang, 1995).


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Various brands of rice are offered in the market, as well as various attributes attached to each

brand, resulting in the consumer rice packaging determines the attitude of choice, to buy the

brand of rice packaging. Rice packaging products in the city of Mojokerto have quite a lot of

variety and kinds, among others: Alami brands, Pak Tani, Semar Bagong, Padi, Putri Bulan,

Putri Biru, Tawo, Lele, Lumbung Padi and many other brands.

Consumer behavior is influenced by four main factors, namely 1) Cultural factors consist of

culture, class sausage, sub culture; 2) Social factors consist of reference group, family, role and

status; 3) Personality factors consist of age and life cycle, occupation, state of the economy,

lifestyle, personality and self-concept; 4) Psychological factors consist of motivation,

achievement, knowledge, belief and attitude (Kotler and Armstrong, 1997).

This research activity tries to do research which emphasized on analysis of consumer behavior

of rice packaging which is liked and have high market share in mojokerto city.

On the basis of this background, the research of Consumer Behavior Analysis in Selecting Rice

Packaging Brand "Alami, Pak Tani dan Padi" (Case study at Rahma Jaya Store Mojokerto City)

is important to do.

Problem formulation

Based on this background then the authors can formulate the formulation of research problems

as follows :

1. What are brands of merchandise most preferred by consumers (Brand "Alami, Pak Tani and

Padi") ?

2. What are the dominant factors that influence the behavior of end consumers to buy rice

packaging in Mojokerto City ?

Research purposes

The purpose of this research is to :

1. Identifying the characteristics of end-consumer rice packaging includes aspects of brands

(Alami, Pak Tani and Padi) in Rahma Jaya store Mojokerto city.

2. Analyzing the dominant factors that affect the behavior of the end consumer (price, quality,

packaging, service and distance) to buy rice packaging at Rahma Jaya Store Mojokerto City.

RESEARCH METHODS

This research was conducted in Rahma Jaya Store in Mojokerto City, which was chosen

purposively because, from several shops selling rice packaging in Mojokerto City, Rahma Jaya

Store is a store that is located very strategically and willing to be a place or object of research, It

sells rice packaging brand Alami, Pak Tani, and Padi.

Implementation Research conducted in June - July 2016, Determination of respondents done

randomly (random sampling), This study determines the number of Respondents limit is as

much as 100 respondents. The selected respondents are Consumers who are aiming to buy rice

packaging of Alami Brand, Pak Tani and Padi, in Rahma Jaya store to be consumed.

Respondents are not limited by age, sex, status and occupation, because all respondents who

actually buy rice packaging of Alami Brand, Pak Tani and Padi, will be given the questions that

have been prepared by the researchers.

The method used in this research is Fishbein Model research method. The data presented in the

form of symbols that represent the attitude of the end buyer consumer of a product or product

brand. Analysis of data used is Fishbein Model Analysis, with stages: 1) Include a table of

scores in each Questionnaire taken from the respondent to be analyzed to Model Fishbein, 2)

Analyze the attitude of each respondent per product brand. 3) Create a marketing strategy to the

product after knowing the value of Attitude from the analysis of Fishbein method (Engel et. al,

1993) in (Sudiyarto, 2009).


294

According to Engel et. al, (1993), the Fishbein model illustrates that consumer attitudes toward

a product or brand of a product are determined by two things: 1) Confidence in the attributes of

a product or brand (bi component) and 2) Evaluation of the importance of the attributes of the

product (Compound ei). This model is used to evaluate consumer attitudes toward products with

the following formula :

Where :

Ao = Attitude towards an object

Bi = Strength of confidence that the object has attribute i

Ei = Evaluation of attribute i

N = Number of attributes owned by the object (which stands out)

The attributes of rice packaging in this study are :

1. Price

2. Quality

3. Product attractiveness / Impression on (packaging)

4. Service

5. Mileage

From the results of the analysis is expected to provide a picture of consumer attitudes toward

packaging rice consumed and the factors taken into consideration to decide to buy the product.

Consumer attitudes and behaviors will provide an overview and characteristics of rice

packaging consumers, so it can be one of the considerations in determining the marketing

reference that includes the marketing mix in accordance with local environmental conditions,

and can be an important direction in determining alternative marketing policies.

1. Attribute Variables

The variables in this study are divided into 2 (two) variables, the first is the strength of the belief

that rice packaging products of Alami Brand, Pak Tani and Padi, have the five attributes. Each

respondent is asked to express the trust attitude to the question whether rice packaging of Alami

Brand, Pak Tani and Padi, has attribute 1) Price 2) Quality 3) Package 4) Service and 5)

Distance. In this study respondents were asked to express their belief in five points 1) Strongly

disagree, 2) Disagree, 3) Neutral, 4) Agree and 5) Strongly agree. The average score of each

variable will be used to calculate the Fishbein Multiattribute Attitude Model score. The table

scores are as follows :

bi = Strength of Confidence on packaged rice products, including:

Table 1. Score Strength of Faith Against Objects

NO RESPONDENT NAME SCORES FACTS

1 A 1 Strongly disagree

2 B 2 Disagree

3 C 3 Neutral

4 D 4 Agree

5 E 5 Strongly agree

Ao =


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The variable for the second group is the evaluation variable of the five product attributes

(variable ei), which consists of five questions: 1) Price 2) Quality 3) Packaging 4) Service and

5) Distance. Each respondent is asked to state his or her evaluation attitude in 5-digit scale,

ranging from 1) Very Unimportant, 2) Unimportant, 3) Neutral, 4) Important and 5) Very

Important. Questions to measure : ei = The evaluation element of packaging rice products.

Table 2. Score Strength of Evaluation on Objects

NO RESPONDENT NAME SCORES FACTS

1 A 1 Very unimportant

2 B 2 Not important

3 C 3 Neutral

4 D 4 Important

5 E 5 Very important


A. Characteristics of Consumer Rice Packaging in Mojokerto City

Based on the results of the consumer rice packaging survey of 100 respondents who are the final

consumers of the packaging rice of the Alami Brand, Pak Tani and Padi, will be able to provide

an overview of the packaging rice products of the prominent attributes possessed by the product

either the tangible form of the product Such as packaging, price, and quality, as well as the

unreal, such as impressions, consumers of price, quality, packaging, and convenience factor to

get goods, store service and consumer satisfaction when consuming rice packaging products

with a particular brand.

The result of the research on 100 respondents shows that the most popular rice packaging

product is Pak Tani packed rice. This is caused by rice packing Pak Tani brand is well known

by consumers of the attributes that are owned and also known as the quality in accordance with

the price.

More details of the order of rice packaging product brands favored by Respondents in Rahma

Jaya store can be seen in Table 3 below :

Table 3. Percentage of Rice Product Brand Consumed by Respondents at Rahma Jaya

store Mojokerto City.

NO BRAND AMOUNT PROSENTASE

1 ALAMI 24 24 %

2 PAK TANI 44 44 %

3 PADI 32 32 %

TOTAL 100 100 %

Data source : Primary data processed in 2016


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Consumer Behavior of Rice Packaging at Rahma Jaya store Mojokerto City in consuming rice

packaging product gives priority to several things namely Price, Quality, Service Store,

Packaging and Ease / Distance to get the product. From 100 Respondents, the brands most

preferred by consumers are Pak Tani (44%), followed by Padi (32%) and the last is Alami

(24%), can be presented in Figure 1.

Figure 1. The percentage of selected rice packaging product brands consumer of Rahma

Jaya Store in Mojokerto City.

According to Swastha and Handoko (2000), Consumer decision making in purchasing a product

or product is influenced by three factors, that is consumer itself, environment and marketing

strategy which can be explained in Figure 2

Figure 2. Model of consumer decision making

Table 4. Percentage of preferred aspect in consuming rice based on product brand.

Brand Aspect Product (%)

Price Quality Mileage Service Packaging

Alami 14.69 11.18 3.66 7.78 5.74

Pak Tani 9.98 15.55 7.25 8.33 7.48

Padi 10.15 12.02 6.55 10.06 6.88

TOTAL 11.61 12.92 5.82 8.72 6.70

Data source : Primary data processed in 2016


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In Table 4. It can be explained that from the three brands of products (Alami, Pak Tani and

Padi), it is found that the preferred aspect of consuming rice based on the distribution of rice

packaging product brands is the consumer of quality attribute aspect, with the total percentage

of (12.92) Then followed by price attribute, with the total percentage of (11.61), in consuming

the preferred rice is the quality of the rice itself, because with good quality will be produced

tasty rice in accordance with the tastes or expectations of consumers, resulting in consumers

Easily switch to other brands, because the suitability of the quality of the product. While the

price attribute selected by the consumer as a determinant of the second priority aspect because

the price is positively correlated with the quality. The service attributes, packaging, and mileage.

do not become a priority problem in influencing the purchase of certain brands of rice.

B. Consumer Attitudes to Rice Packaging

Based on the results of the analysis on consumer behavior of rice packaging products at Rahma

Jaya store in Mojokerto city which gives a response on the value of trust and evaluation product

of packaging rice attribute on consumer attitudes can be presented in Table 5 and 6. In this

Table can describe that consumer behavior for the attribute of rice packaging products Which

strikingly based on the highest value of the respondent's trust on product attributes is the Quality

factor becomes the first priority, while the Price becomes the second priority. Other factors such

as store service, packaging and mileage, received less attention from consumers. The product of

Pak Tani packing rice has the highest attitude (15.11) to the highest object (15.11) compared to

2 (two) other brands that are (Padi and Alami). While the brand of Alami has trust value to

attribute the most interest is Price factor (3,79), and brand of Pak Tani and Padi have trust value

to attribute the most interest is the Quality factor, respectively (3,91) and (3,38) .

In accordance the opinion of Richard Oliper and James G. Barnes, (2001) in Sudiyarto, (2009),

Stating that customer satisfaction is actually a response given by the customer for the fulfillment

of needs, to gain comfort.

Table 5. The Value of Trust and Attribute of Rice Packaging Product of Alami Brand,

Pak Tani and Padi at Rahma Jaya Store Mojokerto City.

Product Attribute Trust (bi)

Alami Pak Tani Padi

Price 3.79 3.11 3.09

Quality 3.08 3.91 3.38

Mileage 2.04 2.64 2.69

Service 2.67 2.84 3.13

Packaging 2.46 2.61 2.75

Attitude To Object (Ao) 14.04 15.11 15.03

Data source: Primary data processed in 2016

Table 6. Evaluation Value of Trust and Attribute of Rice Packaging Product of Alami

Brand, Pak Tani and Padi at Rahma Jaya Store Mojokerto City.

Product Attribute Evaluation (ei)

Alami Pak Tani Padi

Price 3.88 3.20 3.28

Quality 3.63 3.98 3.56

Mileage 1.79 2.75 2.44

Service 2.92 2.93 3.22

Packaging 2.33 2.86 2.50

Attitude To Object ( Ao ) 14.54 15.73 15.00



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The level of consumer confidence in the product attributes is the value of the consumer response

to the product where the attributes are viewed from one by one. Meanwhile, to see the overall

attitude of trust consumers in a product can use Fishbein model analysis which means consumer

attitude towards the object as a whole.

Attitudes toward the object of all respondents of rice packaging products indicate that the rice

packaging products of Pak Tani brands are more in demand by consumers seen from the

Attitude value toward Fishbein Model Object. Here are the Fishbein model calculations for the

entire Product per brand:

1. Attitude Analysis of Fishbein

The value of interpretation based on the attributes possessed by the product illustrates that the

importance of an attribute to influence the process of the occurrence of transactions by

consumers based on the value of trust and evaluation. Can be seen in tables 7, 8, and 9.

Table 7. The Value of Attitude Analysis and Interpretation of Alami Brand.

N

O

ATTRIBUTE

S TRUST (bi)

EVALUATIO

N (ei) bi x ei

INTERPRETATIO

N

1 Price 3.79 3.88 14.69 Very like

2 Quality 3.08 3.63 11.18 Likes

3 Mileage 2.04 1.79 3.66 Ordinary

4 Service 2.67 2.92 7.78 Ordinary

5 Packaging 2.46 2.33 5.74 Ordinary

TOTAL 43.04 Ordinary


Table 8. Values of Attitudes and Intresprestasi of Pak Tani Brand.

N

O

ATTRIBUTE

S TRUST (bi)

EVALUATIO

N (ei) bi x ei

INTERPRETATIO

N

1 Price 3.11 3.20 9.98 Likes

2 Quality 3.91 3.98 15.55 Very like


4 Service 2.84 2.93 8.33 Likes


TOTAL 48.59 Very like


Table 9. Values of Padi Attestation and Intractprestasi Analysis

N

O ATTRIBUTES TRUST (bi)

EVALUATIO

N (ei) bi x ei

INTERPRETATIO

N

1 Price 3.09 3.28 10.15 Likes

2 Quality 3.38 3.56 12.02 Likes


4 Service 3.13 3.22 10.06 Likes


TOTAL 45.66 Likes



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Description Ring score :

3.66 s / d 7.99 is Unusual

8.00 to 12.30 is Likes

12,40 s / d 16,00 is very like

Table 10. Attitude Value (Ao) Alami Brand, Pak Tani and Padi by Attribute.

Product

Attribute

Trust (bi) Evaluation ( ei ) Attitude (Ao)

Alami

Pak

Tani Padi Alami

Pak

Tani Padi Alami

Pak

Tani Padi

Price 3.79 3.11 3.09 3.88 3.20 3.28 14.69 9.98 10.15

Quality 3.08 3.91 3.38 3.63 3.98 3.56 11.18 15.55 12.02

Mileage 2.04 2.64 2.69 1.79 2.75 2.44 3.66 7.25 6.55

Service 2.67 2.84 3.13 2.92 2.93 3.22 7.78 8.33 10.06

Packaging 2.46 2.61 2.75 2.33 2.86 2.50 5.74 7.48 6.88

Attitude To

Object (Ao) 14.04 15.11 15.03 14.54 15.73 15 43.04 48.59 45.66


Table 11. Interpretation Based on Alami Brand, Pak Tani and Padi.

NO ATTRIBUTE bi x ei Alami

Interpretations bi x ei

Pak

Tani

Interpretations bi x ei Padi

Interpretations

1 Price 14.69 Very Likes 9.98 Likes 10.15 Likes

2 Quality 11.18 Likes 15.55 Very Likes 12.02 Likes

3 Distance 3.66 Ordinary 7.25 Ordinary 6.55 Ordinary

4 Service 7.78 Ordinary 8.33 Likes 10.06 Likes

5 Packaging 5.74 Ordinary 7.48 Ordinary 6.88 Ordinary

Attitude To Object

( Ao ) 43.04 Ordinary 48.59 Very Likes 45.66 Likes


Description Ring Score:

3.66 s / d 7.99 is Unusual

8.00 to 12.30 is Likes

12,4 s / d 16,00 is very like

Based on the results of Fishbein model analysis in Table 10 it can be explained that from the

three brands of packaged rice products (Alami brands, Pak Tani, and Padi), the brands most

preferred by consumers based on attitudes toward the object on the basis of trust and evaluation,

the first is Pak Tani With the value (48.59), the second brand of Padi with value (45.66), and

followed by Alami brand with value (43.04), can be shown in Figure 3.


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Figure 3. Interprestasi Value by Brand.

According to Mowen and Minor in Lina Salim (2002), Defining that consumer attitude toward

the brand is studying consumer to evaluate the brand either it’s liked or not liked constantly. In

the other word consumers evaluating certain brand. From the worst to the best.

In Table 11 in terms of the order of attributes based on the brand it can be explained that the

first order is Pak Tani brand with Interprestasi is very fond of the quality attributes (15.55),

likes to price and service respectively (9,98) and (8, 33), second order of Padi brand with

Interprestasi likes to quality, price and service, respectively (12,02), (10,15) and (10,06) and

followed by Alami brand with Interprestasi very like to attribute price ( 14,69), and likes to the

quality attribute (11,18), can be shown in figure 4.

Figure 4. Graph of Trustworthiness (bi) and Consumer Evaluation (ei) Based on the

Alami Brand Attribute, Pak Tani and Padi.

CONCLUSIONS

Based on the results of research and discussion can be concluded as follows :

1. The product of Pak Tani packing rice obtained by total value based on attitude toward object

on the basis of Trust Value and its Evaluation is equal to (48.59) with Interpretation of Very

Likes, Rice Brand Product obtained by total value (45.66) with Interprestasi Likes and


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followed by Alami Brand Product with Total value of (43.04) with Average Interpretation

Only. Thus Product Brand Pak Tani is the Brand of the most in demand by Consumers

compared with the Second Brand Other Rice Packaging Products.

2. Consumer packaging rice Alami Brand, Pak Tani and Padi, have different behavior based on

attitudes toward the object (consumer fanaticism), the dominant factor affecting End

Consumer Behavior on Packaging Rice Product First is Brand Pak Tani with Interpretation

Very Likes to Attribute of Quality (15.55), and Likes to Price and Service respectively (9,98)

and (8,33), Second order of Padi Brand with Interprestasi Likes to attribute Quality, Price

and Service, respectively (12 , 02), (10,15) and (10,06) and followed by Alami Brand with

Interpretation of Very Likes to Price attribute (14,69), and Likes to Quality attribute (11,18).

REFERENCES

Amang. 1995. National Food Policy, Dharma Karsa Utama, Jakarta.

Engel, James F., Roger D. Blackwell, and Paul W., Miniard, 1993. Consumer Behavior Sixth

Ed. The Dryden Press On Bina Lupa Aksara. Jakarta.

Engel dkk, 1993 in Sudiyarto, 2009. Agribusiness Consumer Behavior. UPN PRESS. Surabaya

Kolter and Amstrong. 1997. Marketing Analysis Introduction. Fourth Edition. Perentice-Hall.

New York.

Http://imamagus20.blogspot.co.id/2015/01/consider-consumer-services.html

Mowen and Minor in Lina Salim 2002, consumer behaviour. 5th edition. Translated. Erlangga

publisher. Jakarta.

Richard Oliper and James G. Barnes. 2001 in Sudiyarto. 2009, Agribusiness Consumer

Behavior. UPN PRESS. Surabaya

Rustiani. F. 1995. Farmers in Business Interrelationship; Sharpening Deferences and Potential

Dependency. Akatiga. Bandung.

Swastha and Handoko. 2000, Marketing Management, Consumer Behavior Analysis.

Yogyakarta K BPFE-Yogyakarta.

http://imamagus20.blogspot.co.id/2015/01/consider-consumer-services.html


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INFLUENCE RELATIONSHIP MARKETING TO CUSTOMER

SATISFACTION AND LOYALTY

1Lavencia Dean Ananda, 2Tina Melinda♠


INDONESIA


ABSTRACT

This study aims to clarify the effect of relationship marketing on

satisfaction, and the influence of satisfaction on loyalty. This type of

research is explanatory research or explanatory research with

quantitative approach. The population of this study were all members of

the Ananda Shop Baking Ingredients. A sample of 100 respondents who

had been a member, and active during the last 6 months and taken by

using judgment sampling and data collection methods using

questionnaires. Analysis of the data used is descriptive analysis and sem -

pls. The results of this study found that: the variable relationship

marketin variables significantly influence customer satisfaction and

customer satisfaction variables significantly influence pelnggan loyalty

variables. Thus, Ananda Shop Baking Ingredients should be deeper and

more serious in a relationship with the customer in order to forged

increasingly close relationship and its longevity.

Keywords: Relationship Marketing, Customer Satisfaction, Customer

Loyalty

INTRODUCTION

In this period of free competition, every company has a tough competition. To win the

competition, the company must be able to give satisfaction to the customer. Various efforts are

made to satisfy the needs of consumers so that they are willing to come back to the companies.

Foodstuffs distributors also have had a lot of competitors since the free trade era in Indonesia.

Foodstuffs from other countries begin to come in with competitive prices and good quality.

While the companies have comparative advantages, the free trade policy will not affect them.

Every company should put customer satisfaction orientation into their main goal to win the

competition. Competition favoring customers’ demand has also been made through one of the

local flour products in Semarang. This has been done by opening a training ground for its food

product users. Competition with food distribution companies also began to occur, not only with

quality products and competitive prices but also with giving the best service for their customers


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Table 1. Competitor data

COMPETITOR STRENGHT WEAKNESS

Sari Murni Cake

Material Shop

Complete product

Strategic location

Provide a discount

Customer relationship

Harapan Jaya Cake

Material Shop

Competitive price

Strategic location

Do not have enough

stock

Kartika Cake Material

Shop

Cheap price Non-strategic

location

Ananda Cake Shop is located in one of big roads in Semarang city. This company has target

customers running bakery business. This pastry shop which used to be a very small has been run

since 1979. Today, this shop has a great location. Ananda store has many customers. It has

comparative advantages by prioritizing good relations with customers and offering the best

services for customers. But with the already tight competition, the impact on the sale of cake

materials at Ananda store has decreased.

Table 2. Sale Data per month

No. Month Sale Customers

1 April 2014 285,046,976 2,553

2 May 2014 275,756,886 2,450

3 June 2014 220,765,468 2,412

4 July 2014 239,213,450 2,405

5 August 2014 253,141,750 2,330

6 September 2015 210,674,800 2,300

7 November 2015 208,540,950 2,295

8 December 2015 205,745,756 2,275

9 January 2015 200,659,765 2,150

Source: Company's Internal Data 2014-2015

Table 2 shows competition with competitors has been increasingly tight. This condition makes

companies do various efforts to keep their customers and get more new customers. The way

they build marketing relationships is to hold a training place where customers can directly see

the process of foodstuff making. This training place becomes a place for customers and

companies to establish good relationships. The companies can directly listen to what customers

expect from them. According to Kotler and Keller (2009: 134) "Creating loyal customers is at

the core of every business."


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Problem Formulation

The research problems of this present study are formulated as follows

• Does Relationship Marketing affect customer satisfaction?

• Does Relationship Marketing affect customer loyalty?

• Does customer satisfaction affect customer loyalty?

Research Objectives

The purposes of this research are to investigate if:

• marketing relationship provides customers’ satisfaction.

• marketing relationship provides customers’ loyalty.

• customers’ satisfaction affects customers’ loyalty.

Research Benefits

1. Theoretical benefits: it is to offer insight about the importance of customers’ marketing

relationship in maintaining customer satisfaction to gain their loyalty.

2. Practical benefits: It is to develop marketing relationships and to serve a reference to other

researchers in the future. This study concerns which dominant factors affect customers’

satisfaction to get customer loyalty. As owners are able to identify weaknesses and advantages

of their company, they begin to improve their employees’ performance to maximize, develop

relationships with their customers

LITERATURE REVIEW

Ardeliasari (Darema Journal Management Vol.9 No. 1, May 2014) mentions the implementation

of Marketing Relationship has covered some dimensions such as Understanding a Customers’

Expectation variable, building Service Partnership, empowering Employees, and conducting

Total Quality Management. They have a positive and significant relationship with customers’

loyalty. The dimension of Relationship Marketing that has the highest level of relationship with

Customers’ Loyalty is Building Service Partnership (BSP) or Kd2. This research has been

conducted by Dr. Velnampy (Global Journal of Management and Business Research Volume 12

Issue 18 Version 1.0 Year 2012) aims to know

A marketing relationship is a major paradigm shift in marketing theory and its practice in the

existing world. According to Ndubisi in his journal entitled "marketing relationship and

customer loyalty" have big impacts on four fundamentals of marketing relationships-trust,

commitment, communication, and conflict management - to customers’ loyalty in Malaysia.

According Heruswato (Business Management Indonesia Vol.42 No. 2/April-June 2013)

customers’ loyalty is belief to have a strong influence on business success. The meaning of

loyalty is not only limited to the relationship between consumers and brands, but to social

relation aspects, especially in the form of relationship. The consumer's attachment to the brand

will increase the people’s good perception about certain products or brands. Conscientious

consumers will get stronger if the product/brand is to provide their satisfaction consistently and

continuously.

Relationship marketing is a process of creating, maintaining and enhancing strong relationships

with customers and other stakeholders (Kotler and Armstrong, 2010: 789). Sivesan (2012) says

that relationship marketing is a very important concept to attract and retain customers within an

organization. In Saputra (2014), relationship marketing has important variables of trust,

commitment, and communication.

Understanding customer satisfaction, according to Kotler and to Tse and Wilton as cited by

Tawakkal (2013), has something to do with customers’ satisfaction (expectations and

performance or perceived results). In determining the level of customer satisfaction, five main


305

factors need to consider such as product quality, service quality, emotional, price, and cost

(Riadi, 2013).

According to Kertajaya in Luthviellah (2015) loyalty is obtained through the fulfilment of

humans’ need to have, support, and get a sense of security and comfort. Meanwhile, according

to Oliver in Luthviellah (2015), the definition of customer loyalty is the commitment of

customers to survive to re-subscribe or re-purchase products or services selected consistently in

the future. The indicators of customer loyalty according to Kotler & Keller in Saputri (2013) are

repeated purchase, retention, and referrals.

Philosophically, the customer is a king (Kotler, et al., 2010: 4). The business that favour

influencing and satisfying consumers becomes the top priority in almost all business activities.

Companies that excel in competition can influence consumers’ purchase decisions. As

customers are satisfied, companies can survive and develop their business. In Stevanus (2012),

one way to provide customer satisfaction is to build marketing relationship strategy. In this era

of globalization, technology and information systems are widely used by companies to support

all business activities. The effort in getting loyal customers is done by applying customer’s

relationship. Customers’ loyalty and relationship are indispensable (Rinaldi, 2015). Jones and

Sasser state customers’ loyalty is an endogenous variable caused by a combination of

satisfaction. In so doing, customers’ loyalty is to favour customers’ satisfaction. If the

relationship between satisfaction and customers’ loyalty is positive, high satisfaction will

increase customer loyalty.

Previous Studies 1. The results of Mayang Azka Ardeliasari (Darema Journal Management Vol. 9 No. 1,

May 2014) marketing relationship has a positive and significant relationship with

customer loyalty.

2. Research conducted by dr.T. Vacnampy & S. Sivesan (Global Journal of Management

and Business Research Volume 12 Issue 18 Version 1.0 Year 2012) shows Relationship

relationship marketing has an interest, to develop and retain customers.

3. According to Ign. Heruswato (Business Management Indonesia Vol. 42 No. 2/April-

June 2013) in his research customer loyalty is believed to have a strong influence on

business success.

According to Nelson Oly Ndubisi relationship marketing is important to test the relationship

with loyalty.

RESEARCH FRAMEWORK

Theories

1. Relationship marketing is a process for creating, maintaining and enhancing strong

relationships with customers and other stakeholders (Kotler and Armstrong, 2010: 789)

2. Customer satisfaction is the feeling of pleasure or disappointment of someone who

emerged after comparing the perception / impression to the performance (or outcome) of a

product and its expectations Tawakkal (2013)

Loyalty is "a strong feeling of support and allegiance; Aperson showing firm and costant

support (Lutviellah, 2015)


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ANALISIS MODEL

Figure 1. Model Analysis

Figure 1. shows marketing relationship has an effect on customers’ satisfaction, and customers’

satisfaction influences customers’ loyalty.

HYPOTHESES

From the above theoretical framework, the hypothesis are formulated as follows:

H1: relationship marketing will have a positive effect on customers

H2: customer satisfaction will affect customers’ loyalty

RESEARCH METHODS

Research Approach

The samples are drawn randomly. The data are obtained through questionnaires. The data

analysis is intended to test the hypothesis: to investigate if marketing relationship affects

customers’ satisfaction and loyalty (Sugiyono, 2012: 7). The researcher has used a quantitative

method because the data are in the form of numbers.

To complete the research data, this study has used Partial Least Square (PLS). PLS is one of the

ways to analyze Structural Equation Modelling (SEM). One of SEM's advantages is the ability

to construct models as latent variables or variables not directly measured. However, they are

estimated and assumed to be related to latent variable. In PLS - SEM, there are two models:

inner model (structural model) and outer model (measurement model).

Place and time of research

The research site is at Ananda Cake Shop in Semarang. In this location the researchers have

distributed questionnaires to customers who had made a purchase at Ananda Soup Shop.


307

Table 3. Activity Stages

No

Activity Stages

Month

June July August September

1 Preparation x

2 Survey x x X

3 Data Collection X X

4 Data Analysis X X

Source: Internal Company Data (2014-2015)

Sampling

One method used to determine the number of samples is to use the Slovin formula (Sevilla et al,

1960: 182), as follows

where:

N: Number of Samples

N: Number of Population

E: Limit Tolerance of Error (error tolerance)

The sample technique is judgment sampling or purposive sampling. The samples are data that

customers did transaction within 6 months. The data are taken from the number of subscribers

recorded in 2000 population using the 1/10 tolerance limit. Using the Slavin formula, 96

customers making transactions are selected.

Method of Collecting Data

In this study, the data are quantitative data. These data can be measured numerically. There are

2 types of data sources in this study: primary and secondary data. The primary is obtained by

distributing questionnaires to customers at Ananda Cookies Shop. Secondary data are obtained

from the internal company. These data include data on competitors or competitors of the

company, books, journals and other documents that support the study.

Data is gained through questionnaire. This method is used to explore information relating to

marketing relationship that affects customers’ satisfaction and loyalty.

Research Instruments

The measurement of data is to use Likert scale. This scale has been the most widely used scale

in research for survey (Natsi, 2014). While responding to questions on a Likert scale,

respondents determine the level of their approval of a statement by selecting one of the available

options. The five scaled options are arranged as follows:

Score 1. Very (Disagree/Bad/Less)

Score 2. No (Agree/Good/Less)

n =2000__________ 1 + 2000 x

= 95,23 = 96


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Score 3. Neutral/Enough

Score 4. (Agree/Good/Like)

Score 5. Very (Agree/Good/Like)

Variables and Operational Definition

The variables in this study are relationship marketing (X), Customer Satisfaction (Y1) and

Customer Loyalty (Y2). In Table 4.2 will be shown in detail about the operational definition in

this study

Tabel 4. Variable Insdicators

Variabel Definisi Indikator Sumber

Relationship

Marketing

(X)

Reflective

Relationship marketing is a

process for creating,

maintaining and enhancing

strong relationships with

customers and other

stakeholders

a) Trust

b) Commitment

c) Communication

(Kotler and

Amstrong, 2010:

789)

Saputra (2014)

Customers’

satisfaction

(Y1)

Reflective

Customer satisfaction is feeling

happy or disappointed someone

who emerged after comparing

the perception/impression of the

performance (or result) of a

product and hope-hope

a) Product quality

b) Service quality

c) Emotional

d) Price

e) Cost

Tawakkal (2013)

Riadi (2013)

Customers’

Loyality (Y2)

Reflective

Loyalty is “a strong feeling of

support and allegiance; a

person showing firm and

constant support

a) Repeat Purchase

b) Retention

c) Referrals

Luthviellah (2015)

Saputri (2013

Data analysis technique

This study uses SEM-PLS (partial least squares path modelling) method of SEM-PLS. This

method is used to test the predictive relationship among constructs: to see if there is any

relationship or influence among constructs. The numbers of samples in this study are 96


309

respondents. This study use SmartPLS 2.0 M3. According Ghozali (2012: 47-88), there are

some stages of analysis in using the PLS-SEM.

Figure 2. Stages of SEM-PLS Analysis

Source: Ghozali, 2012: 47-55

The conceptualization of the model is the first step in the PLS, at this stage the researcher

defines the conceptually constructed concept and determines its dimension. And the

conceptualization of the model is divided into 2 stages, namely designing the measurement

model (outer model) and Designing the structural model (inner model). Ghozali (2012) revealed

that after the model conceptualization, the next step is the determination of algorithmic analysis

method that will be used for model estimation, while resampling is used to estimate the value of

statistical significance that cannot be done by PLS which can only estimate the value of the

regression coefficient. The next step is to draw the path diagram of the research model

performed. The provisions in model drawings are theoretical constructs that show latent

variables drawn with circles or ovals, Indicators in drawings with box shapes, and asymmetric

relationships depicted with a single arrow direction. For inner and outer results the model is

expressed in the form of a path diagram to make it easier to understand, here is a path diagram

of the inner and outer model

Line Channel Construction

Konseptualisasi Model (inner and outer models Model Conceptualizati)

Determining Algorithm and Resampling Analysis Method

Conversion of path diagram into the system of equations

Estimation: Weight, Path Coefficient, and Loading

Goodness of Fit

Hypothesis Testing


310

Converting the Path Diagram into the system of equations:

A. Outer Model

Exogenous Latent Variable

Variable x, Relationship Marketing (reflective)

X1.1 = λx1x1 + ε9

X1.2 = λx2x2 + ε10

X1.3 = λx3x3 + ε11

Endogen Latent Variable

Variable y1, Customer Satisfaction (reflective)

Y1.1 = λy1Y1 + ε1

Y1.2 = λy2Y2 + ε2

Y1.3 = λy3Y3 + ε3

Y1.4 = λy4Y4 + ε4

Y1.5 = λy5Y5 + ε5

Variable y2, Customer Loyalty (reflective)

Y2.1 = λy6Y2 + ε6

Y2.2 = λy7Y2 + ε7

Y2.3 = λy8Y2 + ε8

B. Inner model

The system of inner model equations as follows:

Y1 = g1 X1 + ξ1

Y2 = g2 Y1 + ξ2

With description:


311

Lx = Lamnda (small), loading factor of exogenous latent variable

Ly = Lamnda (small), loading variable factor latent endogen

G = Gamma (small), the coefficient of influence of exogenous variable on endogen

Ξ = Zeta (minor), model error

D = Delta (small), measurement error on exogenous latent variable

E = Epsilon (small), measurement error on endogenous latent variable

Weight Estimation, Line Coefficient and Loading

The estimation method is a small square method. This includes three things: weight estimation

used to calculate latent variable data, path estimation connecting among latent variables, and

loading estimation among latent variables depicting indicators and means for indicators and

latent variables.

Evaluation of the Goodness of Fit

Outer Model (measurement model)

The outer model is a model that tests each latent variable and the indicator. The measurements

of formative and reflective models are different (Anwar, 2015: 9).

Outer reflective model

Validity

Table 5. Rule of Thumb Validity of Outer Reflective Model

Validity Parameter Rule of Thumb

Convergent

Validity

Loading Factor > 0.5

AVE > 0.5

Communality > 0.5

Discriminant

Validity

Cross Loading > 0.7

Source: Partial Least Square "Technical Concepts, and SmartPLS 2.0 applications" (Ghozali,

2012:

81)

Reliability

Table 6. Rule of Thumb Reliability of Outer Reflective Model

Parameter Rule of Thumb

Cronbach’s Alpha > 0.7

Composite Reliability >0.7

Source: Partial Least Square (Ghozali, 2012:81)

The reliability of the reflective outer model follows the following rule: the Cronbach's Alpha

value must be greater than 0.7 and the composite (ρc) is a perfectly acceptable within the limit

value of > 0.7 by looking at Cronbach's Alpha. The value of Cronbach's specified Alpha is

greater than 0.7 (Ghozali, 2012: 81).


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Inner Model (Structural Model)

Tabel 7. Rule of Thumb Inner Model

Criteria Rule of Thumb

R – Square 0.75 (strong) , 0.5 (moderate), and 0.25

(weak)

Q2 Predictive

relevance

0.35 (strong) , 0.15 (moderate), 0.22

(weak)

Source: Partial Least Square (Ghozali, 2012: 85)

Hypothesis Testing

Tabel 8. Rule of Thumb Hypothesis Test

Criteria Rule of Thumb

Significance (2-failed) t-value > 1,65 (significance level 10%), > 1.96

(significance level 5%), >2,58 (significance level 1%)

Source: Partial Least Square (Ghozali, 2012: 85)

Statistical hypothesis for outer model:

H0 : λi = 0 towards

H1 : λi ≠ 0

Statistical hypothesis for inner model: Exogenous latent variable towards endogenous:

H0 : γi = 0 towards

H1 : γi ≠ 0


Characteristics of Respondents

The numbers of samples are 100 people.

1. Gender


313

Figure 3. Gender of Respondents

Source: Processed Results with Excel

2. Age

Figure 4. Age of Respondents

Source: processed products with Excel


314

Descriptive Statistics Relationship Marketing

Table 9.

Latent Variable Questions Mean Standard

deviation

Marketing Relationship

of Ananda Cake Shop

Ananda Cake Shop gains trusts from

Customers (x1)

3.21 0.409

Ananda Cake Shop get customers’

commitment (x2)

3.19 0.394

Ananda Cake Shop establishes

relationships with customers’

communities (x3)

3.24 0.429

Descriptive statistics above show the cake ingredients Ananda has a commitment to the

customer (X2), the value of which has the smallest standard deviation. While the

indicator (X2) has a mean value of 3.19, this indicates the respondent's answer to

customer commitment (X2) is more homogeneous when compared with the

respondent's answer on other indicators.

Descriptive Statistics of Customers’ Satisfaction

Table 10.


deviation

Customers’ Satisfaction

to Ananda Cookies Store

Ananda store has good product quality

(y1.1)

3.39 0.490

Ananda has good product service (y1.2) 3.43 0.517

The Customer of Ananda Cake Shop is

proud of buying from Ananda's cake

shop (y1.3)

3.32 0.548

Ananda Cake Shop Shop has competitive

prices (y1.4)

3.22 0.504

Ananda Cake Shop provides bonus fee

for delivery service (y1.5)

3.12 0.456

Descriptive statistics above show that the ingredients of Ananda cake store provides

bonus cost for delivery service, the value of which has the lowest standard deviation.

While the indicator (y1.5) has a mean value of 3.12 this indicates the respondent's

answer to Ananda cake ingredients giving bonus cost for delivery service (y1.5) is more

homogeneous when compared with the respondent's answer to other indicators.


315

Descriptive Statistics Customer Loyalty

Table 11.


deviation

Customer Loyalty to

Ananda Cake Materials

store

Ananda Cake Shop provides bonus fee

for delivery service (y2.1)

3.33 0.493

Customers remain loyal to the Ananda

Cake Shop even though it is a competitor

(y2.2)

3.31 0.465

Customers positively recommend

Ananda Cake Shop to others (y2.3)

3.31 0.465

Descriptive statistics above show customers remain faithful to the cake shop despite the

existence of competitors (y2.2). Moreover, the customers have positively recommended poster

cake shop to others (y2.3), the value of which has the same deviation value. While the indicators

(y2.3) and (y2.2) have the same means of 3.31, this finding indicates the customers remain loyal

to the cake shop in spite of the existing other competitors. They even give their positive

recommendation about Ananda cake shop to others. This is more homogeneous when compared

with the respondent's answer on other indicators.

Data Processing with SEM - PLS

By using smartPLS software then model structure can be seen in Figure 5

Gambar 5.3 Struktur Model SEM

Figure 5.


316

Reflective Outer Model

Validity

The validity test is performed on the reflective model contained in the analysis model, i.e.

Relationship Marketing (X1), Customer Satisfaction (Y1) and Customer Loyalty (Y2). For

reflective variables, researchers discuss the convergent validity that includes three things:, the

loading factor, AVE, and communality. Next discriminant validity is discussed by looking at

cross loading. The reliability is seen through cronbach's alpha value and composite reliability.

Table 12.

Original Sample (O)

X1 <- Relationship 0.886



Y1.1 <- Satisfaction 0.844








Table 5.3.1 states that factor loading values for each indicator X1, X2, X3, Y1.1, Y1.2,

Y1.3, Y1.4,

Y1.5, Y2.1, Y2.2, Y3.3 are greater than critical value of 0.5. This can concluded that the

indicators are

valid.

Average Variance Extracted (AVE)

The AVE value is used to measure the number of variants that the construct can capture

as compared to the variance caused by measurement error (Yamin and Kurniawan, 2011)

Table 13.

Average Variance Extracted (AVE)

Relationship 0.713

Satisfaction 0.625

Loyalty 0.803

Source: Processed Results with SmartPLS


317

Based on the value of loading factor and AVE it can be seen that the convergent validity has

been met. This takes place because the value of factor loading and AVE are greater than 0.5.

ii. Discriminant Validity

In testing the validity of discriminant is measured by using cross loading. Discriminant validity

is evaluated by cross loading. The value of cross loading is shown in Table 5.7.

Regarding the cross loading value in Table 5.3.3, there is no high correlation on indicators that

are not latent variables. The loading value for each construct is greater than those of the cross

loading.

Cronbach's Alpha

Table 5.3.4

Test results of reliability can be seen in table 5.3.4. The value of Cronbach's Alpha for each

reflective indicator can be said to be in accordance with the explanatory research requirements

that is ≥ 0.6.


Table 14.


Relationship 0.881

Satisfaction 0.891

Loyalty 0.924

Table 5.3.5 shows the reliability test value of the composite reliability of each reflective

indicator in the study can be said to be good and in accordance with the terms and

conditions that is ≥ 0.7.

Outer loading Hypothesis Testing

Table 15. The Results of Outer Loading

Original

Sample

(O)

Sample

Mean

(M)

Standard

Deviation

(STDEV)

T Statistics

(|O/STDEV|

)

X1 <- Relationship 0.886 0.881 0.043 20.590

X2 <- Relationship 0.866 0.865 0.042 20.739

X3 <- Relationship 0.778 0.772 0.065 11.927

Y11 <- Satisfaction 0.844 0.838 0.040 20.998

Y12 <- Satisfaction 0.892 0.892 0.025 36.388


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Y13 <- Satisfaction 0.846 0.846 0.033 25.875

Y14 <- Satisfaction 0.757 0.754 0.060 12.719

Y15 <- Satisfaction 0.575 0.575 0.093 6.203

Y21 <- Loyalty 0.884 0.882 0.041 21.816

Y22 <- Loyalty 0.934 0.934 0.019 50.344

Y23 <- Loyalty 0.868 0.866 0.040 21.578


The outer model test for reflective variables includes relationship marketing, customer

satisfaction and customer loyalty. This is shown in in table 5.3.6. The test is done by looking

outer weight with t count more than 1.65. This value indicates that X1, X2, X3, Y.1.1, Y1.2,

Y1.3, Y1.4, Y1.5, Y2.1, Y2.2, Y2.3 are eligible.

Evaluation of Structural Model (Inner Model)

Evaluation of the inner model is done by calculating the values of R2 and Q2.

R-Square value

The value of R2 can be seen in Table 5.9

Table 16. R square value

R Square

Satisfaction 0.238

Loyalty 0.125


The value of R-Square for the variable of satisfaction that is equal to 0,238 means that the

percentage of the diversity of satisfaction variable can be explained by relationship marketing

variable equal to 23,8%. Meanwhile, the rest 76.2% is explained by other variable. It can be

concluded that 76.2% relationship marketing affects customer satisfaction. Based on R2 value,

the coefficient of determination of endogenous variable is still weak.

Q - Square values

Then calculated the value of Q2 by the formula

Q2 = 1 - (1-R12) (1-R22)

Q2 = 1 - (1 - 0.238) (1 - 0.125)

Q2 = 1 - 0.762 x 0.875

Q2 = 1 - 0.66675

Q2 = 0.33325

Based on the value of Q2, the prediction capability with pinfolding is considered good


319

Path Coeficient

Table 17.

Original

Sample

(O)

Sample

Mean

(M)

Standard

Deviation

(STDEV)

T Statistics

(|O/STDEV|

)

Relationship -> Satisfaction 0.488 0.502 0.075 6.542

Relationship -> Loyalty 0.172 0.188 0.062 2.791

Satisfaction -> Loyalty 0.354 0.368 0.080 4.407

The result of coefficient path showed that the direct influence between latent relationship

variable to satisfaction and satisfaction toward loyalty was significant with t-statistic ≥ 1.65.

These results mean that satisfaction is influenced by loyalty and relationship influenced by

satisfaction. While the indirect influence among latent variable relationship with loyalty is

significant with t - statistic ≥ 1.65, this means that loyalty is also influenced by relationship.

5.5 Discussion

5.5.1 Influence of Relationship Marketing to Customer Satisfaction

Based on Table 5.4 it can be seen that the value of t comparing relationship marketing to

customer satisfaction of 6.542 is greater than the value of table t that is ≥ 2.58. Therefore

relationship marketing (X1) significantly influences customers’ satisfaction (Y1) about the

shops.

Before Research After Research

1. Broadcast SMS to all members

Holding a gathering event to all

members

Telephone/telemarketing to customers

as a reminder

2. Trust to customers of products sold Provide sample products for free

Provide education for purchased

products


320

3. Giving gifts to members Give members timeframe to collect

points

Provide direct rewards to members at

the time of shopping

The Effect of Customers’ Satisfaction on Loyalty

Based on Table 5.4 it can be seen that the value of t hits relationship marketing to customer

satisfaction of 4.407 is greater than the value of table t that is ≥ 2.58.Therefore customer

satisfaction (Y1) has a significant influence on customer loyalty (Y2) in baking shop.

This research is in agreement with previous research, Heruswato (Business Management

Indonesia Vol.42 No. 2/April-June 2013) Customer loyalty is believed to have a strong

influence on business success. The impact of customers’ satisfaction on current loyalty Ananda

cake shop is to provide good product quality. The companies should favour customers to select

while giving different prices for certain products.

Based on the findings, researchers make managerial implications for customers’ satisfaction

variables on customer loyalty. It is intended to improve the deficiencies.

Before Research After Research

1. Provide free postage in the city with

minimal spending

• Provide free shipping for members

• Provide bonus on postage on certain days

2. The product offered has been tested its

quality

• Provide product demos

• Demonstrate the superiority of the product

3. Provide a diverse price with the quantity of

purchase

• Provide special pricing to members

• Provide special discounts on store

birthdays

4. Provide quality product selection • View products to be sold that are

acceptable to customers


321

REFERENCES

Anonim, 2013 Customer First itu Penting. http://komunitas.yellowpages.co.id/ customer-

first-itu-penting/ (diakses pada tanggal 22 Juni 2015)

Riskawati, 2013 Uji Validitas dan Realibilitas, http://statistikapendidikan.com/wp-

content/uploads/2013/05/Uji ValiditasRealibilitas.Riskawati.pdf (diakses pada tanggal

22 Juni 2015)

Navel, 2011 Varibel-variabel dalam Penelitian https://navelmangelep.

wordpress.com/2011/12/30/variable-variabel-dalam-penelitian/ (diakses pada tanggal

23 Juni 2015)

Ghozali, Imam. 2012. Partial Least square : Konsep Teknik, dan Aplikasi SmartPLS 2.0 M3.

Semarang: Badan Penerbit Universitas Diponegoro

Heruswanto,Ign 2013 Manajemen Usaha Indonesia Vol 42 no 2/April-Juni 2013

Velnampy, 2012 ‘Customer Relationship Marketing and Customer Satisfaction A Study on

Mobile Servis Providing Copanies in Srilanka’ Global Journal of Management and

Busniess Research Volume 12 issue 18 Version 1.0

Rachmawati, Rina, 2010 Pengaruh Kepuasan Terhadap Loyalitas Pelanggan (sebuah kajian

terhadap bisnis makanan) Teknubuga Volume 2 No. 2-April 2010

Rinaldi, Udin, 2015 Jurnal Socioscienta Kopertis Wilayah XI Kalimantan Februari 2015,

volume 7 nomor 1

Luthviellah, 2013 ‘Loyalitas

Konsumen’ http://luthviellahberkata.blogspot.com2013/06/loyalitas-

konsumen.html (diakses pada 23 Juni 2015)

Saputri, Marheni Eka, 2013 Pengaruh Brand Image Terhadap Kesetiaan Pengguna Smartphone

Iphone

Ersi, Dzikiryati Yuni, 2014, Analysis CRM, ‘Kepuasan Pelanggan dan Loyalitas Produk

UKM Berbasis Bahan Baku Terigu di Jawa Timur’ Jurnal Manajemen Pemasaran, Vol

8, No 1, April 2014 ISSN 1907-235X

Apriliani, Fitri 2014 ‘Pengaruh Relationship Marketing Terhadap Kepuasan dan Loyalitas

Nasabah’ Jurnal Administrasi Bisnis (JAB) / Vol 17 No. 1 Desember 2014

http://statistikapendidikan.com/wp-content/uploads/2013/05/Uji%20ValiditasRealibilitas.Riskawati.pdf

http://statistikapendidikan.com/wp-content/uploads/2013/05/Uji%20ValiditasRealibilitas.Riskawati.pdf

http://luthviellahberkata.blogspot.com2013/06/loyalitas-konsumen.html

http://luthviellahberkata.blogspot.com2013/06/loyalitas-konsumen.html


322

MARKETING STRATEGY'S FULLFREEDOM

1Ryan Rizki Herdianto, 2Tina Melinda♠


INDONESIA


ABSTRACT

Along with the development of the times and population growth, clothing is

a status symbol, a person's expression and also used to support daily

activities. So the need of clothes or fashion is increasingly growing day by

day. Therefore, the true clothing is a body cover made from textile material

or fiber these days become the basic necessities of every individual other

than food and also become one of the key of increasing the economic

growth and become the mainstay of Indonesia. Therefore, by conducting

research on FullFreedom company which is a company engaged in fashion

or clothing, to research and analyze marketing strategy FullFreedom shirts

using 4 methods of prduction aspects, price aspects, aspects of the place

and aspects of promotion. The result of each aspect shows that there is a

new application to marketing strategy that will be done by FullFreedom.

Analysis of the marketing strategy from the product aspect shows the

results of a more diverse product.

In conclusion, marketing strategy in FullFreedom has emerged and can be

realized from the aspect of product, price aspect, place aspect and

promotion aspect so that it can grow a good marketing pace.

Keywords: Strategy, marketing FullFreedom

INTRODUCTION

The clothing that has become a symbol of status and also the basic human needs in Indonesia,

makes many big companies interested to cultivate this business as a businessman. This has led

to the growth of growing companies based on growing beliefs In big cities to the regions. Which

makes clothing company ranks third after food and textile and in the end Clothing become one

of the key of increasing economic growth and become Indonesia's mainstay sector.Associated

with the clothing industry there is one company that pursue this field is FullFreedom. This

company is a garment manufacturer established in 2013 which has the theme of writing and

drawing. Every year the enthusiasts are increasing to make the work in visualize through

apparel. Focus on meaningful images and writings, to personalize the personality of each person

and group and his or her preferences for a particular field to support the existence of being

social with others. Target segment aged 20-35 years who can adjust the design style changes or

already have a sense of the design style. In the human mindset there needs to be a balance

between aesthetics, ethics and logic. Therefore FullFreedom exist as a balancing mindset that

needs to be managed and appreciated through apparel.

From the research that has been made for 3 years each this wulan behind, FullFreedom sales

have increased and decreased. FullFreedom apparel sales mostly occur in 2015 because

consumer interest in the shirt is increasing in balance with increasing demand. But in the year

2016 FullFreedom sales decline caused by the sluggish world economy and consumers are


323

reluctant to buy clothing and reduce purchases. The decline in product purchases is also due to

the presence of new products of the same kind that began to compete.

FullFreedom using 30s discarst shirts that have a soft texture and easy to absorb sweat and use

the system of color removal that is screen printing, selling price is also affordable with a

nominal Rp. 135,000 per shirt. Sales of T-shirts offline and domicile in Surabaya and use

facebook as media promotion easy to interact on society.

The main tool used in this process is a marketing strategy that serves to ensure that the company

can win the competition so as to obtain adequate levels of sales and profit in accordance with

the risks faced. Strategy seeks to overcome limitations and be able to utilize a variety of

resources possessed optimally (Adisaputro, 2014). Based on the above background, researchers

analyzed the factors that influenced FullFreedom's marketing t-shirt strategy, in order to survive

in competition with other competitors and can increase the number of sales.

LITERATURE REVIEW In this FullFreedom Marketing Strategy research is the object of research by using the same

theory with the theory used by the researcher that is 4P (Product, Price, Place, Promotion) so as

to clarify the marketing strategy of a company.

1. Product (product)

The definition of product (product) is as everything that can be offered to the

market to attract attention, acquisition, use, or consumption that can satisfy a desire

or need. Products include more than tangible goods. In a broad sense, the product

includes physical objects, services, events, people, places, organizations, ideas, or

mix of all, Kotler and Armstrong (2010: 266).

2. Price (price) In a narrow sense, the price is the amount charged to a product. When further

extended the meaning of the word price is the sum of all values given by the

customer to profit from owning or using a product. Throughout history, prices have

been a major factor influencing buyers' choices.

3. Promotion (promotion) Promotion comes from promoting words in English which means developing or

improving.

4. Place (place) The most important thing in marketing is to determine how a product can be

available in the marketplace. Places that deal directly with consumers and

marketing intermediaries are stores and supermarkets rather than producers.

According to Morissan (2010), the marketing channel decision covers the activities

of selecting, managing and motivating distributors, wholesalers, brokers and

retailers who will help companies provide goods and services to consumers. In this

study used place indicators as follows: stores and resellers.

RESEARCH METODS

A. Research Approach

According to Moleong (2012: 4) qualitative method is a research that produces descriptive

data that is in the form of written words of people and observed behavior. Thus, in this case

it should not isolate an individual or an organization into variables or hypotheses, but need

to see it as a part of something wholeness. The data required in this study is obtained

through interviews, observations, and documentation. Collecting data in the form of images,

words, and not numbers is the cirri of this study.

So as to cause using the conceptual framework and research methods as follows:


324

RESEARCH METHODS

DISCUSSION:

A. Product Knowledge of the product for fullfreedom is teen shirts purchased for teenagers, needed

basic products as supporting the core benefits and hospitality and good service quality

can be met so that all can support all aspects of the product and put the quality of good

service in order to increase the value of product sales

In fullfreedom products create shirts dominated by quality black, prioritizing details in

all the accuracy of the product good pieces, stitches and the results of quality screen

printing. Added with logo labels and information how to wash t-shirts to stay good so

buyers get complete information when buying fullfreedom products.

B. Price Knowledge of the price for fullfreedom is the determination of the price in accordance

with the market that is supported by the dimensions of discounts or discounts given to

the buyer as well as special deductions at the time of events made from the seller to the

buyer. So to create a good price need to decrease the price in order to support the

product in the market.

In fullfreedom the price fixes the price of 135,000 thousand rupiahs by considering the

limited number of products, high production value, plus the price of the design is quite

expensive and the cost of offline promotion and employee wage payment and monthly

expenses for the rental of premises and pay for basic necessities such as electricity and

water as well Communication costs.


325

NO Prior Research After Research

1 The sale price is

Rp.135.000.

1.1 The undertaking of price reductions due to adjustments to

market prices is Rp 100,000. In order to optimize the product

that can be sold in the market.

2 Discounts between 50%

and 70%.

2.1 Keep discounts with a fair limit of 10% to 15% in the first

6 months.

2.2 After running 3 months later the holding back discount of

20% - 30%.

2.3 If the period of t-shirts is still left to run 1 year then

discounted up to 50% at the end of the stock of existing goods.

3 Give discounts on certain

events even for free.

3.1 Provide a minimum discount between 5 thousand to 7

thousand

3.2 Giving when purchasing large quantities between at least 3

pieces to 12 pieces.

C. Place Knowledge of the place for fullfreedom is indicated through the shop or offlinestore

where the place to sell as a place of marketing of fullfreedom products and the presence

of resellers acts as a resell party that supports the success of marketing strategies that

run. Therefore, to get a place that can easily be found in places frequented by many

people such as malls and access roads in the city center strategically and supported in

terms of cleanliness and comfort of the place.


1 Just focus on temporary

stores and not cooperate

with other distributors.

1.1 Open a store in a crowded place like a mall.

1.2 cooperate with other distributors by using profit sharing

system

2 Have a place at home that is

difficult in the know

people.

2.1 Choosing a place that is easily known to people.

2.2 located in the center of the city or strategically.

3 Having an uncertain reseller

makes it difficult to

monitor.

3.1 Make the customer as well as reseller of fullfreedom

products.


326

D. Promotion Knowledge of promotions for fullfreedom is indicated through advertising that all forms

of nonpersonal presentations and promotions paid by advertisers such as advertisements

on the internet using social media, then direct sales with direct targets to consumers, as

well as word of mouth marketing which means a customer recommends His friends.

Therefore the right promotion is to use social media such as instagram and create a

webside by maintaining the advantages that have been run. There are several ways to do

fullfreedom to promote the product information to the buyer that is by using social

media facebook as a social networking application that many in demand by the buyers,

then more importantly is the direct sales system to the customer to know directly who

the buyer The product so that from there also appear in word of mouth marketing

promotion where the buyer will menginfokan fullfreedom t-shirt products to others

CONCLUSION: Research conducted in thesis entitled marketing strategy of fullfreedom in order to increase

sales and can compete in market have Using qualitative research method, this research

concentrated to discuss 4P (Product, Price, Place, Promotion) to determine marketing strategy

which can be realized well in improving The amount of sales fullfreedom.Berdasarkan research

described earlier, it can be deduced as follows:

Product In fullfreedom products create shirts dominated by quality black, prioritizing


1 Promotion only through facebook

with promotional time at 12 noon,

5 pm and 7 pm promo materials

using product photos and daily

activities conducted fullfreedom

both indoors and outdoors that are

informative and update the latest

news around the word and image

that will be Published next while

the contents of the word content

using the Indonesian and English

language that are promoting

products and calls on things -

things that are building the image

of the shirt products.

1.1 Conducting promotional development

through instagram with promotional

time at 8 am, 3 pm and 8 pm promo

material using daily product photos and

daily activities done fullfreedom both

indoors and outdoors that is informative

and update the latest news around word

and picture Which will be published

next while the contents of the word

content using the Indonesian and

English language that are promoting

products and appeals about things -

things that are building a product image

of the shirt.

1.2 1.2 create an informative webside that

contains interesting articles.

2 Doing direct sales to consumers 2.1 Keep doing direct sales to consumers by giving

word again when the latest t-shirts are

published.

3 Do not consider promotion of

word of mouth marketing well.

3.1 Promoting word of mouth marketing well to

have a wide network.


327

details in all the accuracy of the product good pieces, stitches and screen printing

quality. Added with logo labels and information how to wash t-shirts to stay good

so buyers get complete information when buying a fullfreedom product. There

should be an addition of finished product variant by using embroidery elements to

add varied impressions and latest innovations simply, then provide products that

combine shapes to suit buyers' needs, while maintaining quality and size variants of

size and simple design optimizers and images that represent buyers.

Price In fullfreedom prices fix the price of 135,000 rupiahs by considering the limited

number of products, high production value, coupled with expensive design prices

and offline promotional fees and employee wage payments as well as monthly

expenses for rental of premises and pay for basic utilities such as electricity and

water and costs communication. There should be a price optimization seen from

various aspects that exist until good discounts when there are important events and

momentum so there is no big loss. Make the price that can be reached by the people

and in accordance with the market price of 100,000 rupiah srta supported by the

normal nominal of discount when the promo period of 10% to 15% and also

provide a special discount for buyers who buy with a certain amount to establish a

relationship sell Buy good so on.

Place When the place is there, fullfreedom choose two optional by using the shelter

house as the parent of the place where the shirts are available and then rent the shop

with the assumption of being another alternative place that can be made jelajah

where the purchase of fullfreedom products, but also take advantage of existing

resellers either the individual Or shop that already has a good cooperation. The fore

should consider the aspect in a crowded place like a mall so that many buyers can

easily know where to sell and supported by the selection of a strategic store

location and choose the right reseller in order to increase the growth of a good

purchase. The need for a searchable place to be easily accessible becomes a major

consideration when the marketing strategy will also be implemented appropriately

so that the level of comfort and customer satisfaction also increases as well. No less

important is the existence of loyal customers who can be useful as a seller of goods

in others so as to create optimal employment and give blessing also for bnyak

people.

Promotion There are several ways to do fullfreedom to promote the product information to the

buyer that is by using social media facebook as a social networking applications

that are in great demand by the buyers, then more importantly is the direct sales

system to the customer to know directly who the buyer The product so that from

there also appear in word of mouth marketing promotion where the buyer will

menginfokan fullfreedom t-shirt product to others. Future promotion through

instagram and create an informative webside is a good means of promotion with

shooting system using a good model and an attractive two-way communication

facet produce a media campaign that can grow the rate of turnover of goods that

exist, in addition to promoting sales directly and using the promotion Word of

mouth marketing appropriately. Optimization of the campaign is easy to use and

highly profitable for the company so that the creation of promotional efforts that

cause talks that can benefit the promotion process.


328

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