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Final Paper
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The Role of Corporate Social Responsibility (CSR) Toward
the Development Micro and Small and Enterpreuners Using
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Partnership and Community Development Program (PKBL)
in Pekanbaru
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Manuscript ID IJLMA-12-2016-0167.R1
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Manuscript Type: Research Paper
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employed quantitative analysis with t test (different test) to view the differences in
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entrepreneurial attitude and revenue, before and after receiving the CSR fund
27 through PKBL Program (Partnership Program and Community Development).
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31 turnover and cost efficiency development. (2) The positive impacts from receiving
32 PKBL fund on the development of entrepreneurial attitude towards positivity,
33 though some are Significance, and some are not. (3) A Significance change is
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found in the development of entrepreneurial attitude in the aspect of planning and
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leadership that show that micro and small entrepreneurs have a plan and a good
37 leadership after receiving PKBL fund. It appears in a Significance difference,
38 before and after PKBL fund distribution. (4) Confidence, task orientation, risk
39 taking, and honesty dimensions show no sign of Significance difference, before
and after receiving PKBL fund, as it is related to someone’s nature, which is
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41 attached to each individual, and it requires time, processes and optimal treatment
42 to change.
43 Originality – Originality of this study shows that never been testing the role of CSR or
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44 SOEs Social Responsibility SOE towards the development of entrepreneurial attitude and
45 revenue of micro and small entrepreneurs in Pekanbaru, Riau.
46 Keywords : CSR, Partnership and Community Development Program (PKBL), Different
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50 1. Introduction
51 Micro and Small Enterprises (MSE) became Indonesian weapon while
52 enduring 1998 crisis. Despite being managed in simple manner, they had already
53 taken a major role that time, as they served as a support and an important option
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54 for the community to live in a more prosperous, independent state, and they
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4 helped many people by resolving unemployment, with the following
5 characteristics: resilient; flexible, independent, efficient (worked on by all family
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6 members), and self-(or family) financing. Judging from the number of enterprises
7 (units) and employment in Indonesia, Micro and Small Enterprises play a huge
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role, as can be seen in the following table:
10 Table 1. The Number of Business Entities in Various Categories or Classification
in the 2011.
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12 Enterprises Categories Number of Enterprises (unit)
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14 Micro Enterprises 50,700,000
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16 Small Enterprises 520,220
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18 Medium Enterprises 39,660
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20 Big Enterprises 4,370
21 Total 51,264,250
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23 Source: Annual Report of the Department of Industry and Trade Riau, 2010
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25 The table above shows that 99.91% of the business categories above are micro
26 and small enterprises, only about 1% of them is included medium and large
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32 workforce largely goes to this sector, as shown in the table below:
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34 Table 2. The Number of Employment in Various Categories/ Groups in 2011.
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36 Enterprises Categories Number of Workers (People)
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38 Micro Enterprises 83,647,711
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48 The table above illustrates that the micro and small enterprises provide huge
49 employment. Micro enterprises alone even absorb 89.3% of Indonesian
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Table 3. The Labor Productivity based on Enterprise Category in 2011.
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Productivity
5 Enterprises Categories
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6 (IDR/Employee)
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Micro Enterprises Under 11.57 Million
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Small Enterprises 11.57 Million
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11 Medium Enterprises
12 38.71 Million
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14 Big Enterprises 2.22 Billion
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16 Source: Annual Report of the Department of Industry and Trade Riau, 2010
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19 Based on the condition above, on one hand, SMEs provide a big contribution
20 in terms of employment. Nonetheless, on the other hand, they have relatively
21 small productivity; hence the guidance needed through various efforts conducted
22 by the government. One of those efforts is the program deployed to SOEs (State-
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addition, social responsibility practiced by SOEs is very interesting to study, due
29 to differentiating factors with non-State-Owned Enterprises, namely the presence
30 of coercive instruments such as government policy, imperative in nature, the
implementation of CSR is mandatory for SOEs. In fact, it is highly likely that the
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32 potential of social donation from SOEs is larger than that of private companies.
33 The social role of SOEs is outlined by Ministerial Decision of State-Owned
34 Enterprises No: Kep-236/MBU/2003. The decision issued by the Minister of
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41 a social institution. The weaknesses are: 1). restrictions on the objects of aids; 2).
42 PKBL requires the distribution of direct aids from SOEs without the presence of a
43 third party as a companion, therefore, institutional capacity strengthening rarely
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44 happen to for institutions that should have been partners; 3). Most social
45 assistance from SOEs to community is still caricature in nature, simply a short-
46 term donation, instead of leading to optimal sustainability and empowerment of
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the community. In fact, the partnership program designed to empower generally
49 just provides financial capital without being accompanied by an increase for the
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54 assistance. PKBL is one of the causes, because the imperative nature of the
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4 program comes from the Ministry of SOEs, and the companies think that they are
5 only activity organizer.
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6 Several weaknesses above lead to non-optimal implementations of CSR in
7 SOEs. Therefore it becomes an opportunity to make repairs and improvements at
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the ministry of SOEs, be it in terms of policies, programs, or mechanisms of CSR
10 implementation, so that CSR becomes really helpful for the company, both in
short and long terms. For the community, it is to feel the impact of socio-
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12 economic life or society welfare; and for the government is to increase national or
13 local revenue.
14 Based on the study results on the distribution of PKBL fund to PT. Jasa
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15 Raharja (Ltd.), the SMEs total delinquents from fund rolled out is shown in the
16 following table:
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Table 4. The Delinquent of the Partners as of June 2012 in PT Jasa Raharja
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(Ltd.) of Riau Province Branch.
20 Year Distribution Payments as of Payments received as Delinquent
21 of Funds June 2012 of June 2012 as of June
22 2012
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25 Total 10,280,804,939 9,772,036,892 558,768,047
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Source : PT.Jasa Raharja (Persero), 2012.
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29 The data above show considerable delinquency. It indicates there are many
30 issues/ constraints endured both by SOEs as the fund distributor, and the
entrepreneur (the community) as the users of fund. Therefore, it requires common
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32 ground to make PKBL fund distribution compatible with its mission, as a form of
33 concern from SOEs in helping the government to reduce poverty and increase
34 community revenue surrounding the company.
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41 revenue of micro and small entrepreneurs in Pekanbaru. Furthermore, the research
42 is aimed to examine the differences between entrepreneurial attitude and revenue,
43 before and after receiving CSR fund through PKBL Program (Partnership
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48 Social responsibility or also called Corporate Social Responsibility (CSR) is
49 defined as the corporate commitment to act ethically, operate legally and
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4 society as a whole (Fox et al, 2002 in Budimanta et al, 2004). Thereby, social
5 responsibility (CSR) is directed either inside (internal) or outside (external) of the
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6 companies. Inside, the responsibilities are directed to shareholders in the form of
7 profitability and growth, and for employees is to provide compensation according
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to the principles of justice. Meanwhile outside, social responsibility is related to
10 the role of companies as taxpayer, aimed to improve the welfare and competence
of the public, and preserve the environment for the benefit of future generations.
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12 CSR which is now commonly implemented many companies, has undergone
13 a metamorphosis in quite long timeframe. This concept did not appear easily.
14 There were several stages before its hype grew bolder. When the industry
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15 developed after the industrial revolution, most companies still focused themselves
16 simply as profit-seeking organizations. They deemed that donations to
17 communities were good enough to be given in the form of employment, the
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fulfillment of community needs through their products, and the payment of taxes
20 to the State. As time went by, the community also demanded social responsibility,
21 as they saw economic disparities between business actors and the surrounding
22 communities. The company operations also had a negative impact, such as
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32 In the book “The Portable MBA inn Entrepreneurship”, a definition is given,
33 broader than the definition of Joseph Schumpeter. Entrepreneur is the person
34 who perceives on opportunity and creates an organization to persue it
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41 In the opinion of Drucker (1985), entrepreneurship is the economic activity
42 that moves economic resources from low to high productivity region and greater
43 outcome. Such definition has been developing to date; hence Drucker concludes
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4 into something different from the previous ones (innovation). The goal is
5 achievement of individual welfare and added-value to the community.
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6 Ebert and Griffin define that small business is a business owned and managed
7 independently, and these small businesses do not dominate the market. These
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small businesses are not part or subsidiary of another company. The one running
10 the business is the owner himself, work freely according to his ability. Populist
Economist Program is a set of activities in the Regional Revenue and Expenditure
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12 Budget prepared upon the interests of development and directed to economic
13 actors, cooperatives and small and medium enterprises (SMEs), including micro-
14 enterprises (Zulkarnain, 2005). The bravery to launch the populist economics
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15 system as an economic system must be accompanied by various actions and
16 alignments as the economic actors of this system have many weaknesses, either in
17 terms of human resources quality, financing, technology mastery, market network
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mastery, including production quality resulted which leads to low
20 competitiveness. Therefore, various strategic measures are highly needed so that
21 populist economics can grow reasonably. First; reinforcement to the formal
22 juridical order, be it in the form of laws, government regulation, presidential
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32 Fourth; strengthening the control of market network and essential partnerships. In
33 this context, it needs the mastery of networks and integrated market information to
34 make products saleable, either locally, nationally, regionally and internationally.
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35 Partnerships should no longer false, rather based on the interests of all parties in
36 cooperation, based on principle of partnership: mutually beneficial, mutually
37 reinforcing and interdependent. It also must be supported by adequate and binding
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legislation as implemented by other nations in undertaking this conception. Fifth;
the existence of a strong and consistent political will from the government to
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41 bring the goal of promoting and establishing populist economics into reality, and
42 it certainly should be carried out truthfully and well-programmed.
43 Aloysius Gunadi Brata notes that Small and Medium Enterprises (SMEs) is
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47 percent of enterprises in Indonesia, and they have 99.6 percent share in the
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employment (Kompas, 14.12.2001). However, in reality, SMEs have only
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54 Responsibility toward the Attitude and Revenue Development of Small and Micro
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4 entrepreneurs in Riau Province, was to select three (3) State-Owned Companies
5 that distribute fund from Partnership and Community Development Program
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6 (PKBL) in Pekanbaru, namely PT. Jasa Raharja, PT. Angkasa Pura and PT.
7 Pegadaian in Riau Region. Meanwhile, the material study scope included a review
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on PKBL beneficiaries, from 2012 to 2013. The population and sample in this
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10 research were the micro and small entrepreneurs as the partners of several SOEs
in Riau Province, with all major branches located in Pekanbaru. The entrepreneurs
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12 also received guidance through attitude training and entrepreneurial development
13 from these SOEs. In this case, the population was consisted of 155 Small and
14 Micro Enterprises, whilst samples taken in this research were 95 small and
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15 medium enterprises. The consideration of this sampling was based on the
16 reachable distance and location. This research employed quantitative analysis with
17 t test (different test) to view the differences in entrepreneurial attitude and
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revenue, before and after receiving the CSR fund through PKBL Program
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20 (Partnership Program and Community Development).
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22 4. Result and Discussion
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23 The results of different test analysis (t test) on eight variables are presented
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Based on the table above, on the planning variable, planning after receiving
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43 the PKBL fund is Significancely different from the plan before receiving PKBL
fund (p-value <0.05), meaning that the provision of PKBL fund which is
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45 previously accompanied by training on entrepreneurial attitude, has affected
46 changes in attitude associated with the planning process. Therefore, respondents
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50 in their activities, but after PKBL, there is a deduction, i.e. only 5 respondents
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who did not do the planning in their business activities. It signifies that PKBL
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4 In confidence variable, results of different test state that there are no
5 Significance differences in the confidence of SMEs entrepreneurs, before and
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6 after receiving PKBL fund (p-value> 0.05), as seen from the finding above, where
7 the negativity after receiving PKBL fund is even greater than prior to receiving
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PKBL fund. In other words, PKBL fund is not able to improve their confidence;
10 instead it creates a greater feeling of concern, as they encounter greater challenges
with greater business. It is because confidence is in the nature of a person that
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12 takes relatively long time to change.
13 In the variable of task orientation, the analysis shows that there are no
14 Significance differences in SME entrepreneurs before and after receiving PKBL
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15 fund, in terms of orientation to tasks (p-value > 0.05). It means that fund provision
16 is not able to change their attitude, from not task-oriented into task-oriented,
17 although there are differences where the negativity decreases after receiving
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PKBL fund, in comparison with prior to PKBL fund (a decrease from 10
20 respondents into 8 respondents). According to the writer, it resembles to
21 confidence in one's self. This attitude is even instilled in a person, thus it takes a
22 long time to change this mentality, and it requires a strong desire to be successful
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24 Judging from variable of Risk Taking, PKBL fund is not able to change the
25 attitude of employers in the courage to take risks, meaning there is no
26 Significance difference, before to after receiving fund, from State-Owned
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32 after PKBL funds, has Significance differences. There is a noticeable difference or
33 increase in positive attitude or decrease in negative attitude, from 29 respondents
34 into 8 respondents (p-value <0.05). It means that the indicators instilled in a leader
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35 become better, as the guidance done before funding is useful. It is compatible with
36 the managerial concept, including leadership which is science that can be learned
37 and applied by anyone to become a leader, in addition to the informal leadership
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taking place in relatively small organization, and well-developed communication.
In Honesty variable, the result shows that that there is no Significance
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41 difference for honesty dimension owned by SMEs, before and after receiving
42 PKBL fund (p-value> 0.05), although there is a decrease in the negativity, from
43 18 respondents into 9 respondents. It means that loan is often defined as non-
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47 difference (p-value <0.05), meaning that by the use of PKBL fund, the
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entrepreneurs can increase sale, especially an increase in turnover in bigger range
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4 5. Conclussions and Recomendation
5 Based on the analysis of Study on Impacts of Distribution of Corporate Social
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6 Responsibility Fund (Partnership and Community Development Program) on the
7 development of attitude and revenue of Small and Micro entrepreneurs in
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Pekanbaru, then the following conclusions can be made (1) Partnership and
10 Community Development Program aid conducted by State-Owned Company is
highly effective and helps small and micro entrepreneurs in increasing revenue. It
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12 is shown from the significance in sales turnover and cost efficiency development.
13 (2) The positive impacts from receiving PKBL fund on the development of
14 entrepreneurial attitude towards positivity, though some are Significance, and
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15 some are not. (3) A Significance change is found in the development of
16 entrepreneurial attitude in the aspect of planning and leadership that show that
17 micro and small entrepreneurs have a plan and a good leadership after receiving
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PKBL fund. It appears in a Significance difference, before and after PKBL fund
20 distribution. (4) Confidence, task orientation, risk taking, and honesty dimensions
21 show no sign of Significance difference, before and after receiving PKBL fund, as
22 it is related to someone’s nature, which is attached to each individual, and it
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25 Recommendations for this study are: (1) The Partnership and Environment
26 Development Program needs to be continued, but the mechanism in selecting
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business actors that will receive it must be evaluated. (2) Attitude guidance is
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needed, through intensive training and guidance, which is more oriented to
30 honesty (awareness to refund the loan, so that SOEs won’t suffer delinquency),
the courage to take risks, confidence, and to be task-oriented, all of which are
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32 important factors for the success of these entrepreneurs. (3) A special department
33 is needed to handle PKBL program. It should not be done by SOE employees
34 because it will overlap with their regular jobs, so that the target of CSR will be
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35 carried out properly. Or else, fostering partnership with other institutions in the
36 implementation of PKBL, starting from planning, implementation, and evaluation
37 which are properly integrated.
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References
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42 Budimanta, Adi Prasetijo, Bambang Rudito, 2008, Corporate Social
43 Responsibility for Development Alternatives Indonesia (In Indonesian
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51 Drucker P.E, 1985. Innovation and Entrepreneurship. McGraw Hill Book. New
52 York.
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5 PT.Jasa Raharja, 2012, Riau Branch CSR report, June 2012
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7 Zulkarnain. (2005). Assertiveness and Creativity Employees Working in Multi
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Level Marketing (In Indonesian Asertivitas dan Kreativitas pada
10 Karyawan yang Bekerja di Multi Level Marketing). Psikologia Journal
Vol. 1., 2. USU Press
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