Open AccessSUPPORTING FACTORS FOR THE SUCCESSFUL IMPLEMENTATION OF CORPORATE GOVERNANCE IN HANDICRAFT SMES
Author(s) -
Nizar Alam Hamdani,
Sukma Nugraha,
Asep Suparman
Publication year - 2020
Publication title -
humanities and social sciences reviews
Language(s) - English
Resource type - Journals
ISSN - 2395-6518
DOI - 10.18510/hssr.2020.81108
Subject(s) - handicraft , business , corporate governance , marketing , profitability index , sustainability , intellectual capital , knowledge management , accounting , finance , computer science , art , ecology , visual arts , biology
Purpose of Study: This research is to analysis and study factors that influence the successful implementation of good corporate governance in handicraft SMEs based on several factors related to business ethics, public information, and the company's ability to develop, be sustainable and compete. This study also aims to create a new element from several groups of factors that can be categorized based on grouping in a component matrix.
Methodology: This research was conducted using a descriptive correlational design. The samples were 54 handicraft SMEs that have implemented corporate governance principles in five regencies in West Governance. The sampling technique uses simple random sampling in 5 districts in West Java Province. Data processing used Exploratory Factor Analysis (EFA).
Main Findings: The results show that the four factors support the successful implementation of Handicraft SME's corporate governance. The first factor is profitability, financial report integrity, and competitiveness, this primary factor is called competitiveness. The second factor is decision making, business ethics, and planning and organizing aspects, and this factor is called leadership. The third factor is sustainability and access to banking and this factor is called the bankable factor. The fourth factor consists of growth and public information, and these factors are called growth factors.
Applications of this study: The results of this study can be used as a reference by handicraft SMEs to develop business management to improve leadership factors and maintain growth so that it becomes bankable and competitive. This information is also useful for investors and financial service providers to provide capital to handicraft SMEs.
Novelty / Originality of this study: First, this research formed a new factor that supports the success of governance in handicraft SMEs; these factors are leadership, competitiveness, bankable, and growth. These four factors are the main factors determining the successful implementation of corporate governance in handicraft SMEs. Both of these studies combine several concepts from previous research the characteristics of SMEs in West Java, Indonesia.