FOREWORD Welcome to the 1st International Conference ... - icoen.org [PDF]

The First International Conference on Entrepreneurship

FOREWORD Welcome to the 1st International Conference on Entrepreneurship (2014 ICOEN, INDONESIA)

On behalf of The Honorable Keynote Speakers, Conference Co Host, Rector of Ciputra University. Organizational Committee, Steering Committee, and distinguished Presenters and Participants. It is my great pleasure to welcome you to this International Conference on Entrepreneurship (ICOEN) 2014 in Indonesia. The conference is held on September 18th and 19th; 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) Prof. Parimal Merchant, Director Center for Family Manager Business SP Jain Institute of Management & Research, India, (2) Prof. Greg Barton, Director of the Center for Islam and the Modern World (CIMOW), Australia, (3) Ir. Harun Hajadi, MBA Managing Director of Ciputra Group, Indonesia, (4) Tanadi Santoso, MBA., Founder of SAM Design, Indonesia, (5) Antonius Tanan, MBA, President of UCEC (University Ciputra Entrepreneurship Center), Indonesia, (6) Prof. Dr. Lucas da Costa, SE., M.Si, Rector of Universidade Da Paz, Timur Leste, (7) Norashidah Hashim, PhD, Deputy Director of Training and Consultation Department. Co – operative and Entrepreneurship Development Institute (CEDI) Universiti Utara Malaysia, Malaysia. 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 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, 2014 ICOEN Organizing Committee Chair Dr. J.E.Sutanto, MM. Graduate School, Ciputra University Surabaya, Indonesia

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COMMITTEE Steering Committee 1. Dr. David Sukardi Kodrat, MM., CPM. (Asia)

(Ciputra University)

2. Prof. Dr. F. Danardana Murwani, MM.

(Ciputra University)

3. Ir. Hendrasmoro, M.D.M.

(Ciputra University)

Organizing Committee Chair

Dr. J.E. Sutanto, MM

(Ciputra University)

Secretary

Dr. Christina Whidya Utami, MM.

(Ciputra University)

Co-Secretary Natalia Christiani Djahi, S.Pd., M.Pd.

(Ciputra University)

Treasury

(Ciputra University)

Maria Assumpta Evi Marlina, SE, MM.

Co-Treasury Eko Budi Santoso, SE., M.Si.Ak.

(Ciputra University)

HELD BY CIPUTRA UNIVERSITY COLLABORATED WITH 1. UIN Sunan Ampel Surabaya, INDONESIA 2. Universitas Negeri Surabaya, INDONESIA 3. Sekolah Tinggi Ilmu Ekonomi Indonesia Surabaya, INDONESIA 4. Universitas Katolik Darma Cendika Surabaya, INDONESIA 5. IBMT International University Surabaya, INDONESIA 6. Ikatan Doktor Ekonomi Indonesia (IDEI) Surabaya, INDONESIA 7. Universitas Abdurachman Saleh Situbondo, INDONESIA 8. Universitas W.R. Supratman Surabaya, INDONESIA

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REVIEWER 1. Prof. Dr. Ir. Hening Widi Oetomo, M.M., Ph.D. (Sekolah Tinggi Ilmu Ekonomi Indonesia Surabaya) 2. Dr. Tina Melinda, Dra., M.M. (Ciputra University Surabaya) 3. Dr. Christina Whidya Utami, M.M. (Ciputra University Surabaya) 4. Dr. Hermeindito, SE, MM. (Ciputra University Surabaya) 5. Dr. Yusak Anshori, M.M. (Ciputra University Surabaya) 6. Jimmy Ellya Kurniawan, S.Psi., M.Si., Psikolog (Ciputra University Surabaya) 7. Wirawan Endro Dwi Radianto, S.E., M.Sc.Ak. (Ciputra University Surabaya) 8. Dr. Christian Herdinata, S.E., M.M. (Ciputra University Surabaya) 9. Adi Suryaputra Paramita, S.Kom., M.Kom. (Ciputra University Surabaya) 10. Trianggoro Wiradinata, S.T., M.Eng.Sc., Ph.D. (Ciputra University Surabaya) 11. Tommy Christian Efrata, S.E., M.Sc. (Ciputra University Surabaya) 12. Agoes Tinus Lis Indrianto, S.S.,M.Tourism. (Ciputra University Surabaya) 13. Dra. Juliuska Sahertian, M.Sc. (Ciputra University Surabaya)

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KEYNOTE SPEAKERS 1. Prof. Parimal Merchant Director Center for Family Manager Business SP Jain Institute of Management & Research, INDIA 2. Prof. Greg Barton Director of the Center for Islam and the Modern World (CIMOW), AUSTRALIA 3. Ir. Harun Hajadi, MBA Managing Director of Ciputra Group, INDONESIA 4. Tanadi Santoso, MBA Founder of SAM Design, INDONESIA 5. Antonius Tanan, MBA President of UCEC (Universitas Ciputra Enterpreneurship Center), INDONESIA. 6. Prof. Dr. Lucas da Costa, SE., M.Si Rector of Universidade Da Paz, TIMOR LESTE 7. Norashidah Hashim, PhD Deputy Director of Training and Consultation Department . Co – operative and Entrepreneurship Development Institute (CEDI) Universiti Utara Malaysia, MALAYSIA

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TABLE OF CONTENTS

Aminullah Assagaf1 Lukman Hakim1 Zulkarnain1 Rahmat Setiawan1 Erwin Dyah Astawinetu1, Yulyar Kartika Wijayanti2, Rini Rahayu Sihmawati3 Shienny Megawati Sutanto 1, Denny Bernardus 2 Melinda Gunawan1, J.E. Sutanto2 Sulistyo Budi Utomo1, Anang Subardjo2 J.E.Sutanto1, Charly Hongdiyanto2 , Hari Minantyo3 Hasto Sudewo1 Rahaju Saraswati1

Dina Novita1

J.V. Budi Kartono1, Heru Suprihhadi2

The Implementation of Marginal Cost Pricing To The Decision Management Understanding The State Organ As A Tool of State Equipment Based Stateless Theory (Indonesian People) Corporate Entrepreneurial Crime And Corporate Criminal Liability Understanding Social Entrepreneurship And Business Entrepreneurship Science And Technology For Entrepreneurship Program In Economic Faculty Untag Surabaya The Influence of Publisher’s Promotion Through Social Media Towards The Consumer Awareness of Fantasy Novels: A Case Study of Ther Melian Novels The Effects of Work Related Attitudes on Turnover Intention Among Employees In Ud Libra Analysis of Factors That Encourage Students To Make Online Business For STIESIA Student Sby Utilizing Smartphone The Influence Service Quality Product Quality To Customer Satisfaction (A Case Study At Modern Riteil In East Java) Analysis of Trust Influences on The Commitment of Employee To Organization In Pt X East Java Oil Abundance, Genuine Saving, Economic Growth, And Sustainable Development In Indonesia Analysis of The Influence of Service Quality To Customer’s Satisfaction (A Case Study At Pt. Mandala Multifinance Tbk. Surabaya Branch) The Influences of Reward And Developed Expectation Toward Profession Responsible And Lecturer Motivation In Private University At Kopertis Region Vii East Java

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27 39 45

55

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80

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Badriyah1

The Role of Pumelo Fruit Juice (Citrus Maxima Var Nambangan), Vitamin C And Lycopene Suplementation Live Fungtion Disturbance of Ocharatoxin-Exposured Mice (Mus Musculus) Developing of Colaborative Entrepreneurship Awan Kostrad Diharto 1 Model In Indonesia: A New Paradigm of Collaborative Entrepreneurship Model In Islamic Business 1 Surjo Hadi Design Analysis Tool Support Release And Installation Process Wheels Toyota Innova With Ergonomics Methods What Indonesian Students Want From A Christian Budiman 1 University? Urbanus The Case For AEC 2015 1 Syunu Trihantoyo The Implementation of Educational Management Functions And Substances In Making A Superior School Based on Entrepreneurship 1 The Relationship Between Leadership Style Maria Christina Liem Andjob Satisfaction In Order To Gain Customers’ Satisfaction: An Explanatory Study 1 Marina Wardaya , Denny The Influence of Product Quality on The Purchasing Decision of Educational Children Bernardus2 Books Lenny Gunawan1, Tommy Entrepreneurship Education Implementation For Entrepreneurial Project 2: Case Studi In Efrata2 Universitas Ciputra

148

Heru Suprihhadi1, Budi Kartono2

Comparative Study In Transformational Leadership Style To Cooperation Enterprises Commission Based On Membership

240

Helena Sidharta1

Start Up Business and Their Pricing Strategy

253

Sukesi1

Increasing The Value-Added Of The Coconut Processed Products And Its Impact To The Society’s Economic Behavior In Pacitan Regency

260

Hermeindito1

Does Naively Selected Perform Portfolio Efficiently? Empirical Evidence from Indonesia Capital Market

274

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Suparjo1

Marketing Strategy Determining Using Swot Analysis In Ud. Barokah Sidoarjo

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THE IMPLEMENTATION OF MARGINAL COST PRICING TO THE DECISION MANAGEMENT Aminullah Assagaf1

University of Dr. Soetomo SURABAYA, INDONESIA E-mail: [email protected] ABSTRACT

The concept Margnal Cost Pricing (MCP) is particularly relevant when used inthe environment of State-owned Enterprises, especially for companies engaged in the field of community serviceand has strategic position in national economic growth. Pricing controlled by the government and the House of Representatives is considere dessential in order to preserve the stability of the business, avoid inflation and unemployment. Therefore it is important for the ministry of state enterprises to study the application of MCP concept, since relevant research results have shown that the this concept has been widely used by developed countries such as American and European countries, especially in determining the electricity rates, train fare, bus fare, ships fare, and publicutility rates provided by the government. In an environmentof State-owned Enterprises there were none research result that led to the implementation of this concept due to the following difficulties: (a) the mechanism that is influenced by political considerations, (b) consideration of qualitative decision-makers with out using a quantitative basis, (c) lack of dissemination of this concept and its nation-wide applicationis very limited,(d) there has been no comprehensive studies in the environment of state-owned enterprises related to the application of this concept, (d) in adequate financial statementsor unadjusted yet since the accounting information is not realistic because of historical based reports, and others. Technically, the application of the MCP concept in the environment of state-owned enterprises can be done, however the willingness and commitment of stake holders are very required.This is where therole of corporate management in the environment of state-owned enterprises or the ministry of state-owned enterprises as share holders as well as annual general meeting board initiatesteps that begins with the study to convince the feasibility and benefits of the MCP implementation. The benefits are especially in improving the performance of related state-owned enterprises, reducing the burden of subsidies, and improving public services. Furthermore, this paper is expected to inspire the decision makers in the environment of state-owned enterprises such as state

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electricity company, railway company, Pelni, Damri, Hospitals, Pertamina, Gas, and other public facilities provided by the government.

Keywords: The Application of MCP in Pricing, Pricing Mechanism, Selected Case Studies

INTRODUCTION Marginal cost pricing (MCP) has long been recognized in many developed countries which are controlled by the state companies or private companies. Companies that are controlled by the government are related to the lives of the society, as a state enterprise, related to consumer protection, and concerning all actions of a company that are detrimental to the society. The purpose of this MCP concept is especially in the sense of achieving the optimal level if the company makes maximum profit,and getting minimum loss when the company gets loss. Maximum profit or minimum loss does not mean harming the consumer society but it means that the company internally determines certain quantity and price which have optimal results, which means raising or lowering the price (P) that can reduce the profitor increase the loss. The same thing also happens onthe determination of the quantity(Q) of the optimal production or sales to increase or reduce the production or sale, that can reduce the profit or increase the loss company. This concept is ideal to be used in environments of State-owned Enterprises that expand the community service tasks and have become agents of economic development. This is particularly forstate-owned enterpriseswhich still rely on subsidies that weigh on state finances, or which are expected tobe come a source of revenue for the state budget, and is closely related to social and economic life, so the companies need funds for expansionon an on going basis, such as electricity (PLN), rail transport (PJKA), public buses (Damri), sea shipping (Pelni), airflight (Garuda and Merpati), clean water (PDAM), telecommunications (Telkom andIndosat), fuel (Pertamina), gas (PGN), freeway (Binamarga), airportrunway (AngkasaPura), as well as other infrastructure companies. In practice, the companies usually determine its selling price based on the cost price plus a certain amount of profit, and consider external factors and internal factors such as competition advantages which are reflected by the company's value. In case the company has value then the consumers will not take price as their priority, so that kind of companies can set higher prices than the prices of other goods. Unfortunately, not all companies are able to achieve high value and consumers have different income levels. For the people who have middle to lower in come, they generally consider the price factor; therefore a company must choose apricing strategybased on the cost structure. Marginal cost approach is one of the marginal cost pricing techniques, where the price is set at the optimal level on condition that the marginal cost(MC) equals marginal revenue(MR). In the event that prices are set by the government and

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parliament, the price of the various quantity of sales, the demand curve is horizontal, the MR curve coincides with the price(MR=P). MR obtained from the change in total revenue(ΔTR) is divided by the change inquantity(ΔQ) and the result isequal to theprice(P). Levels of P and Q are achieved at optimal condition ofMR=MC, orMR=P=MC,so this approach is commonly referred to as the marginal cost pricing(MCP). In other words, marginal cost pricing approach is the price level and quantity achieved atMR =MC as an optimal condition, which results in maximum profit or minimum loss. This approachappliesto the price decision by the company at various markets such as monopoly, monopolistic, perfect competition and oligopoly market. In terms of pricing policy is controlled by the government, particularly in relation to the lives of many people and to the socio economic stability of society, then this approach his highly relevant to the especially the public utilities company such as electricity rates, water rates, telecommunications, and others.This approach can be used by the State Owned Enterprises(State-owned Enterprises) to control subsidies through pricing that result in the best condition for the consumer and result the lowest subsidies or minimum loss for the companies them selves. For private companies, this approach can be used in pricing strategies that can generate maximum profit. The company's decision to the target of production quantity, sales and price can be treated as the reference for the company to generate maximum profits. Interms of quantity and price realization are smaller or larger, then the maximum profit can not be maximally achieved. The question that arises is that this approach is not often found in the practice of decision-making,both at the state-owned and private companies. This approach is difficult to apply for companies, especially because(a) this approach requires the formulation of marginal cost and marginal revenue; therefore, the information structure of costs, revenue, pricing and demand structure is needed, (b) the price-related decision is not only based on cost structure but also on the company's value judgment, (c) the decision refers to the degree of price competition, (d) a simple approach is considered tobe faster, such as "cost plus margin", (e) a more complicated approach is difficult to be understood by the decision maker, (f) the decision for subject by the management in determining the price, and(g) the cost structure reported by the accounting are often not realistic since it is based on historical records, profit management policy, and data manipulation to describe a particular performance that is not relevant to the actual conditions. To implement this MCP the completeness of information is required for more realistic calculation to support the management or decision makers. Based onthe above description, the issue that arises is how to implement the concept of MCP in State-owned Enterprises environment to achieve optimal conditions in terms of the company's operations and customer service. LITERATURE REVIEW AND RESEARCH HYPOTHESIS Literature showed that the implementation of marginal cost pricing is commonly found in some countries, including(1) Implementation of Marginal Cost Pricing in Book Three

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Transport-Integrated Conceptual and Applied Model Analysis, which is reported through www.mcicam.net by: European Commission-DGTREN; Fifth Frame work2004, which was reported by Esko Niskanen and Chris Nash, with contributions of partners on March 2, 2004, (2) Marginal Cost Pricing in the American Utilities, reported in Southern Economic Journal; Vol. 33 Issue 3, p. 421, 1967 or via www.connection.abscohost.com, (3) Marginal Cost Pricing Implementation Paths to Setting Rail, Air and Water Transport Charges. Reported by the European Commission, Partners, 28 November 2002 via www.mcicam.ne, (4) Marginal Cost Pricing Implementation Paths to Setting Urban and Inter urban Road Transport Charges, reported via www.transport-research.info,updated 25July,2014, (5) Marginal Cost Pricing in Hydro-Thermal Power Industries: Is a Capacity Charge Always Needed? Reported by M.Soledad Are llano and Pablo Serra, the Universidadde Chile, July 2007 and via www.dii.uchile.cl, (6) Marginal Cost Pricing: Adigest of the California experience, reported in Contemporary Economic Policy, June 29,2007, volume17, issue 1, page 20-32, and via www.thefreelibrary.com, (7) Marginal Cost Pricing of Airport Runway Capacity, La Guardian Airport NewYork, reported by Alan Carlinand Rolla Edward Park, 1970,via www.rand.org/papers/p4134.html, and (8) The Marginal Cost Working Group(MCWG) which already has 50American utilities companies participating in MCGW, reported via www.nera.com, 2014. In the environment of State-owned Enterprises, this concept should be applied since it has already been proven in many developed countries, especially to pricing decision which are related to public service or in connection with thelives of many people such as electricity rates, transportrates, water rates, gas prices, fuel prices, and others. The goalisto obtainthe optimal pricethat is notdetrimental to the publicanddoes not burdenthe subsidies from state budget. As a hypothesis, it is believed that the implementation ofthe conceptis possible to implement by management of the company in State-owned Enterprises environment since its internal datais available.What is more importantis that the ways the management company convince the stake holders through communication between agencies, accuracy of data, and preparation of the calculation model in which its results can be quantitatively verified that the price set is to produce optimal financial performance. RESEARCH METHODOLOGY The concept of MC Precommends pricing policy (P) and quantity (Q) that can be optimally achieved at the balance of marginal revenue (MR) and marginal cost (MC). Optimal conditionsare achieved in the form of maximum profit or minimum loss, such as the recommendation of electricity rate in the preparation of Present and Future Financial Management of State Electricity Company (Aminullah Assagaf, 2014: P48-49). For the implementation ofMPCat the State-owned Enterprises environment, the time series - based secondary data is needed, which are based on the adjusted Book Three

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financial report at a certain period. Cost structureandquantityof data are used in the econometric model sales to obtain the corresponding cost function as C=a +bQ2. The value of MC is obtained from the derivative of cost function, while MR is obtained from the structure of the selling price and quantity. Further more, based on the balance of MR = MC it is obtained the price state at the best conditions prevailing along the curve of MC. The conditionof MR=P as described below is a consequence of price fixing by the regulator and does not follow the market mechanism as generally occurred in State - owned Enterprises environment. The results have showed thattheState-owned Enterprisesare still facing difficulties in the implementation ofthis MCP concept, due to (a) the basis for determining the price which still use numbers based on historical - based financial report so that the reports do not describe realistic conditions, (b) pricing mechanism through technical departments of government and the House of Representatives forward the interests of the political and less attention to the financial aspects and economic optimization, (c) lack of efforts in convincing the stakeholders, (d) few studies or experiences in the country which are related to the implementation of the MCP, and(e) the commitment of management and the company policy which are not supporting yet. The following is the description of the concept of optimal condition achievement through the balance ofMR=MC. Costfunction (C) =40+2Q2, marginal cost (MC) =4Q, the price (P) =20, total revenue (TR) =20 Q, and marginal revenue (MR) =20, profit (F) =TR – C = 20 Q- 40 – 2 Q2. If MR = MC is 20 = 4Q, then Q = 5 with a maximum profit of Rp 10 is obtained. In the case of Q is smaller or larger than 5, then the profit gained is not as optimalas the profit ability calculations described below. Profit ability is optimally obtained atQ = 5 so that anything that is larger or smaller than that will produce smaller profit, which is Profit(Q=5)= 10(maximum profit), Profit (Q =6) =8 and P(Q =4) =8 as described below. If the cost function change where the fixed cost sincrease to 60 or C=60+2Q2 and the profit (F) =20Q-60-2Q2. The balance of MR=MCis achieved at position of Q=5, which results minimum loss, therefore it means that the bigger or smaller than that will result a greater loss. Loss(Q =5) =-10(minimum loss), loss (Q =6) =12andLoss(Q =4) =-12 as described above.

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Figure 1

In relation to the optimal pricing policy, EvanJ . Douglasin his book Managerial Economic - Analysis and Strategy (P 423s/d427) suggested the balance approach of MR=MCin the calculation modelof markup and marginal pricing in the following equation, wheree; the price elasticity of demand, dP; price change, dQ; changes in the quantity of sales, P; price, Q; quantity of sales, andCM; contribution margin. Mark up pricing and marginal pricing are formulated as P=AVC+X% (AVC) or the equation P=AVC+CM is used. Marginal approach requires MR = MC, started from TR = PQ, and then proceeded with the calculation of MR and MC. MR=P+Q(dP/dQ) = P+(QP/P. DP/dQ) = P(1 +Q/P. DP/dQ) =P(1 +1/e). The conditions of MR = MC that MC=P(1 +1/e), or the price level P=MC(E /e+1). Since MC equals AVC then the equation of the price level above can be P=AVC (e /e+1). Further more, (e /e+1) +1/(e +1) =1 or (e /e+1) =1-(1 /(e +1), then the optimal price level in the equation P=AVC (1-1/e+1) or P=AVC+(-1 /e+1) AVC can be obtained. For example,e=-5 then the price set is P=AVC+(-1 /-5+1) AVC or P=AVC+(-1 /-4) AVC or P=AVC+(25%) AVC with make up 25% of AVC. Prices formulated in this model reflect the optimal price markup which is derived from the balance of MR=MC. RESEARCH AND DISCUSSION The implementation of MCPis widely used in developed countries, especially by companies associated with public service and which the prices are controlled by the government as a national regulator. This MCP concept should be nationally implemented in the State-owned Enterprises environment; however there has not been a study conducted which its result can lead to its implementation.Many Book Three

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difficulties are faced by the state enterprises, such as already been explained in the preceding section, that should be overcome, unfortunately the regulator and the decision makers have not willingly realized and committed to the importance of this MCP concept to optimize the state-owned enterprises financial performance, to improve their servicesto the community, and to reduce the subsidies that burden the state budget. Pricing Mechanism in State-owned Enterprises Environment The price fixing in the environment of state-owned enterprises is donethrough(a) the decision ofthe annual general meeting, the approval ofthe governmentandthe House of Representatives, (b) management decisionsandapproval ofthe annual general meeting, and (c) management decisionsandapproval ofthe board of commissioners, and(e) management decisions. The mechanism of price fixing by state-owned enterprises which are considered as strategic and affect the livelihood ofthe society is initiated from the management of state-owned enterprises tothe Minister of State - owned Enterprises as stake holder, to be decided in the form of annual general meeting, thenbe reviewed by there lated department or the minister concerned and be reported to the Coordinating Minister and then decided by the governmentto be proposed to the House of Representatives. Having discussed and approved by the House of Representatives, the price fixing proposal is returned to the governmentand to be followed up into action by the enterprises concerned. Inthisprice fixing process, it requires comprehensive discussion in order to considerall aspects. In contrast tothe prevailing priceaccording tothe marketmechanism, the changes can be applied very rapid adjusted to the development of industry and macro environment. The modelof pricing policyset bythe regulator should be more likely offering the implementation of MCP, since the process of price fixing can be discussed and is open to detailed discussion on the calculation mechanism and data used in the model. If necessary, this model can be audited by experts or expert staffs to ensure the accuracy of optimal rate calculation. In favorable conditions, the state enterprises will gain maximum benefit, while at the same time their loss are still subsidized, so that the price set will provide loss at the lowest rate and will result subsidy burden at its lowest. This optimal condition does not mean to the consumersociety, butto set a price in such at certain quantity which can produce the best performance for the state enterprises. Thisis beneficial for both companiesand consumers, since the company policy to set bigger or smaller price and quantity from the MCP simulation results will lead to not maximum profits or not minimum losses. Selected Case Studies of State-owned Enterprises One of the study case schosen in this study is the national electricity pricing by the State Electricity Company(PLN) which was established by the stakeholders of state enterprises (SOE), the technical department (Minister of DM) and the approval of House of Representatives. This mechanismis important since electricity service is considered to be strategically related to the life of society at Book Three

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large and affected to the development of business and national industry. The establishment of electricity price fixing in different countries, as well as through the regulators control, is also conducted by supervising the calculation mechanism, data that are used and optimal quantitative models. MCP approachis now used as a technique that is wide lyused in the calculation of rates of public utilities companiesin developed countries. The process of settingratesis mathematically formulated and becomes calculation standard in the price adjustments every time the economic variable changes or the operational cost structure of the company changes. With the adjustment method, the process is more practical, time is relatively short, and the adjustment is gradual or relatively small. There fore, the process of initial implementation of this approach is needed, through empirical studies and socialization, in order to convincestakeholders Price and Cost Structure The price and cost structures of the selected state enterprises can be described by using the time series data of state electricity company from 2005 to 2014. Table 1. The Structure of Rate and Cost in 2005/2014 (Rp/kWh) TH Average rate Operational AC Surplus (deficit) Source: Financial report and statistics of state electricity company

Price is set much lower than the company operational cost, not including the cost outside the operational cost, Electricity business becomes unattractive to businesses because the rates set are very cheap or result loss. Therefore, the goal is to ease the burden on the public and improve services; however the relatively low rates will cause losses and will reduce services since the market participants are dominated only bystate electricity company as public utility. Losses occur because people use electricity beyond the normal requirements as explained in the law of demand; the lower the price, the more the product and services are used in the term of quantity. As a result,the state electricity company is notable to meet the needs of both consumers and potential consumers, while other companies but this state companyare not interested since it is not worthy for them. Cheaper price and increased demand result bigger subsidy burden at for the state budget, thus inhibiting the development of other sectors and later are detrimental Book Three

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to societyin general. For example, the financial fund for other development sectors such as education, health, and other infrastructures are in a weak position since the state budget is only used to subsidy the electricity. For example, based on financial report of the state electricity company in 2012 and 2013, the subsidies were Rp 103 billion and Rp 101 trillion. Price Implications on Subsidies The implication of very cheap price or unadjusted price for several years while the economic variables that affect the cost structurehave increased, is incontrollable subsidy burden as reported in Manajemen Keuangan PLN Masa Kini dan Masa Depan (AminullahAssagaf, 2014). When this mechanism is still maintained, then the subsidy burden at the state budget, in the near future, will become more severe and even the consumers will feel entitled to the benefit of cheaper electricity rate. This is a very serious implication since the business and industry also enjoy the subsidy given. This can happen because even the government and House of Representatives are seem harder to give economic rate to those commercial sectors because considering that their productivity will be troubled, can result inflation and workers termination, evenlead to the moving out of the industries to other countries such as Vietnam and Thailand. Besides, the entrepreneurs and the business and industries owners which are sometimes also as members of the House of Representatives, have access tothe price adjustments decision making and have strong relationship with the power holder in the government. This is where theimportance ofthe MCP concept implementation in the environment of State - owned Enterprises take place to adjust the amount ofsubsidy may be adjusted from time to timewith the development and changes in economic variables that can affect the company’s operational cost structure, as well as evaluatethe performance of management which is not only service-based but also financial - basedaspects. This is because financial report - based performance has some draw backs since the data informed refer to the history of transactions and are not realistic anymore after some periods. This can be even more unrealistic if the management does creative accounting such as management earning, and others which tend to only describe the condition based on targeted condition such as expecting bonus, preparing initial public offering, avoiding the tax burden, and so on. The Application of MCP in Pricing By using time series dataof state electricity company from 2005 to2013, the following can be used to calculatethe magnitude ofthe costfunction parametersby using SPSS software, and furthermore is used to determine the optimal rates along the MC curve known as MCP. The selection of a cost function model is considered by the data distribution or scatter diagram, by also considering the determinant coefficientor R2 adjuster. The cost function used is C=a +bQ2, where the cost C, aconstant, basdirectional coefficientand Q is the

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quantity of kWhsol do relectricity consumption. Data of operational cost and quantity of electricity sales (TWh) that are used in the SPSS simulationare:

TH

Table 2. Cost and Selling Price in 2005-2014 Operational cost (Rp Q (Twh price) M) Source: financial report and statistic of state electricity company

The result of SPSSsimulation showed that the cost function wasC=33 533+5.656Q2. The parameter of cost function is displayed on the following SPSS table: Table 3 SPSS Analysis Result

Based on the above cost function, it is obtained that, MC=11, 31Q. If the actual prices at the last period is at P=818 then TR=88Q, so it is obtained that, MR=818. Optimal conditionis achieved at thebalance ofMR=MC, whereMR=Pso that theMCPis obtained from the equationP=P=11.31MC which means the QorQ=P/11.31. If the quantity of sales is amounted to 188 TWh based on the last period realization displayed on the abovetable, then the average rateis P=11.31x188=Rp2,121 per kWh. If the realization of average price is Rp 818 per kWh based on the last period realization displayed on the above table, than the optimal sales quantity for Q = 818 / 11.31 = 72 TWh. Referring to the actual sales quantity Q=188, the optimal price of Rp 2,121 perkWh, then the optimum profitability is achieved, which is a function of profitability F=TR-TC or FQ=2,121-33,533 to 5.656 Q2 or F=(2,121 x188) - 33 533 - (5.656 x1882), or the maximum profit of F=165.383 trillion.

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This shows that if the sales quantity is larger or smaller than Q = 188 then the profit is smaller, such asQ=180 profit F=165.061,and Q=200 profit F=164.505 trillion. Based on the price realization P=818 with optimal quantity 72TWh, then theoptimalprofitabilityis achieved, which is a functionof profitabilityF=TR-TC or F=818Q-33,533 to 5.656 Q2 or F=(818 x 72) - 33 533 - (5.656 x722) or the minimum loss of F=3,925 trillion. This shows that if the sales quantity is greater or smaller than Q=72 then the loss will be greater, for example, Q=60Rp4.788 trillion loss andQ = 80 Rp 4.256 trillion loss. The realization of sales quantity 188TWh exceeds the optimal 72TWh, so thatthe optimal price ofRp2,121results maximum profit. On the other hand, the realization ofthe average selling price of Rp 818 per kWh is smaller than the optimal price of Rp 2,121 per kWh so that the optimal quantity of 72 TWh produces minimum loss. Minimum loss or maximum advantage referred to above are described in the following figure, Figure 2

If the time series data of 2005 to 2013 is used for the application of the concept of MCP, the description of operational profit ability of state electricity company that can be obtained is displayed in the following table: Table 4.

Source: financial report and statistics of state electricity company

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Thus, so forth that the concept of MCPcan be applied in the short termorapplied every time any changes in the economic and financial variables that affect the cost structure of the company's operations. The Application of MCP through Gradual and Periodic Price Adjustment The application of MCP is based on the previously agreed calculations by the stake holders of the company. After this calculation model has already been trusted by the parties, the data have been audited, and have been verified by masters and experts, as well as has been supported by the government and the House of Representatives, this MCP concept can be applied in determining the national electricity rates. Its establishment strategies can be done by considering the adjustment of each quarter or semester, and is initiated by giving socialization to the consumers, for both the calculation techniques and the quantitative models used. Technically it can be applied to describe the optimal rate through discrimination rates but with the average rate equal to MC. The commitment of company management is consistently required to update its calculations, socialize and convince the partiesto adjust the rate needed effectively. The strategy and policy of the company management are required especiallyin the preparation of the calculations model, the data used, andthe communication between departments that play significant role in pricing decisions. CONCLUSION AND LIMITATION OF THE STUDY Conclusion 1. The implementation of MCP conceptis widely used in developed countries, especially by public companies in pricing electricity rates, water rates, trainfare, busfare, public transport fare, shiprates, and rates of public facilities provided by the government. 2. The MCP concept has not become the focus of national researches or studies, although it has been realized that this concept provides optimal solution or companies, especially state-owned enterprises. 3. The MCP concept can be used to improve the financial performance of stateowned enterprises, as well as reduce the amount of subsidies that burden the state budget. For instance, the case study of state electricity company showed that the company was subsidized for eachRp 103 trillion and Rp 101trillion in 2012 and 2013. 4. The difficulties faced by the implementation of this MCP concept can basically be overcome if the stake holders support its implementation. This is where the role ofthe company management is needed to promote this concept and convince all parties about the MCP concept to be implemented effectively. 5. The implementation of the MCP concept need preparation strategy, covers the preparation of the calculations model, the auditmechanism of the data used, effective communication between relevant institutions and technicall implementation of price discrimination system when needed. Book Three

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Limitation of the Study This studyis limitedby the availability ofsecondary data provided by the stateowned enterprises. Many state companies which are very relevant with the implementation of the MCP concept, but are facing difficulties in the aspects of the information system limitation which is presented in the form of public information. Therefore, this study is limited to the financial information and statistics of utilization presented by State Electricity Company via www.pln.co.id.If there quired information was available, then the calculation of rates based on the MCP could have been done by internal state companies. Therefore its implementation would be easier to conduct by each internal state company. REFERENCES Aminullah Assagaf. 2010. Ekonometrika Terapan –Aplikasi permintaan Tenaga Listrik. Penerbit Untag Press. Surabaya Aminullah Assagaf. 2011. Manajemen Keuangan – KonsepdanAplikasi. Cetakan Pertama. Media Cerdas.Surabaya. Aminullah Assagaf. 2013. Ekonometrika – Aplikasi SPSS. Penerbit Media Cerdas. Surabaya. Aminullah Assagaf. 2014. Manajemen Keuangan PLN Masa Kini dan Masa Depan. P6577 dan P106-117.Zifatama. Surabaya. Eugene F. Brigham & Phillip R. Daves. 2007. Intermediate Financial Management. Nineth Edition.Prentice Hall. New York Evan J. Douglas and Scott Callan. 1992. Managerial Economic – Analysis and Strategy. Prentice – Hall International, Inc. Englewood Cliffs. New Jersey. Jefrfry M. Perloff. 2001. Microeconomics. Second Edition.Penerbit Addison Wesley. New York. JeyHeizer and Barry Render. 2009. Operation Management. Perason Education. New Jersey. Kotler Keller. 2012. Marketing Management. Fourteenth Edition.Pearson Education. New York.

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Lawrence J. Gitman and Chad J. Zueter. 2012. Principles of Managerial Finance. Thirteenth Edition. Pearson Education. New York. Pauline Weetman. 1999. Financial Management and Accounting – An Introduction. 2nd Edition.Penerbit Financial Time - Prentice Hall. New York. RajanSaxena. 2009. Marketing Management. Fourth Edition. Mc Graw – Hill Offeces. New York Wooldridge. 2009. Introductory Econometrics – A Modern Approach. Fourth Edition. South – Western CengageLearning. USA. Spyros Makridakis, Steven C. Wheel wright, Rob J. Hyndman. 1998. Forecating – Method and Aplication. Third Edition.John Wiley & Sons, Inc. USA. www.pln.co.id Laporan Keuangan PLN tahun 2005 sampai dengan 2013 www.pln.co.id Statistik PLN tahun 2013 www.mcicam.net 2004. Implementation of Marginal Cost Pricing in Transport – Integrated Conceptual and Applied Model Analysis, yang dilaporkan melalui by: European Commission – DG TREN; Fifth Framework.oleh Esko Niskanen and Chris Nash. www.connection.abscohost.com. 1967. Marginal Cost Pricing in American Utulities, yang dilaporkan melalui Southern Economic Journal; Vol. 33 Issue 3, p421. www.mcicam.ne . 2002. Marginal Cost Pricing Implementation Path to Setting Rail, Air and Water Transportation charges. European Commission. www.transport-research.info . 2014. Marginal Cost Pricing Implementation Paths to Setting Urban and Interurban Road Transport Charges www.dii.uchile.cl .2007. Marginal Cost Pricing in Hydro – Thermal Power Industries : Is a Capacity Charge

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UNDERSTANDING THE STATE ORGAN AS A TOOL OF STATE EQUIPMENT BASED STATELESS THEORY (INDONESIAN PEOPLE) Lukman Hakim1 Widyagama University MALANG, INDONESIA E-mail: [email protected]

ABSTRACT State institution / state organ / state apparatus is a unit insperable from the state existence. The existence of the state organ is intended to fill and carry out the state. The establishment of state institution/organ/apparatus is a manifestation of the people representativeness mechanism in order to carry out the government. Also, the establishment of a country is for the sake of people’s interest so that such an establishment should represent people’s aspiration. The people’s aspiration is realised in the form of the state theory of the Indonesian Nation. Keywords: State Organ, State institution, The State Theory.

INTRODUCTION There is almost no exactly the same thing from the constitutional law of a nation than the constitutional law of other nations. The difference is caused by unequal history and background of a nation also by the personality of every nation. 1 Logemann distinguishes formal principle (formele stelselmatigheid) and the principle of material (materiele stelselmatigheid) in constitutional law.2

When considered theories of constitutional law, it will be found theories of constitutional law experts in constitutional law for the legal system of each country. Dutch constitutional law theory put forward by the Dutch expert in constitutional law, constitutional law theory put forward by the British constitutional law expert English, Russian constitutional law theory by the Russian constitutional law expert. And every constitutional law of a country or nation shows the nature or characteristics of the nations concerned. 2 H. J. A. Logemann, translator: Makkatutu and J.C. Pangkerego, A Theory About Positive Constitutional Law, New Ichtiar Publisher-Van Hoeve, Jakarta, 1975, p. 82-83.

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That law (including constitutional law) consists of two elements, 3 namely the element of spirituality that is both abstract and environmental elements that are real. Spiritual element is referred to as the ideal elements and rooted in the human mind. As the building law, this is known as the ideal elements notions. Because rooted in the human mind, the concepts are general (universal) and fixed.4 While the second element is the element that is the real nature and the environment anywhere in the world that humans live. Herman Heller called it as an element of nature and local culture. Because of the natural and human environment, including the values, personality, tradition in which human life is different, the results are different from one another. This element is referred to as the principles. That is why it is possible there is a difference in the principles, such as the principle of democracy of a nation is not the same as other nations. Western world in a more democratic freedom while giving weight to the East give more weight to the equation. So even though the same sense that democracy, but it is different, it depends on the principles which are considered democratic.5 This means that the notions (formele stelselmatigheid) can only be universal, for example, form a republic, but how it (the material) may be different. How can a nation of republics lifting President, covering what powers inherent in the office of President, more broadly how a nation set state life, it all depends on the people themselves, all of which are usually arranged in constitutional law (positive). While the state science is the science that addresses: a) basic understanding as well; b) basic joints on the state. 6 When connected with sistemik theoretical approach, a discussion of the definition and basic joints (principal) are included in the discussion of the state of science in general and is also called the 'theory of the state'. According to Jellinek, the state of scientific theory (teoretische staats¬wissenschaft) exists in the sense of a general nature applicable to all countries, the so-called of the General staatslehre. In addition, there are also states that are special science, bezondere staatslehre, the state's theory that apply to one particular country.

3

Azhary, Stateless Nation Theory Indonesia (An understanding of the concepts and principles in Constitutional Law, Speech at the inaugural ceremony of Acceptance of Office pronounced as professor of the Faculty of Law at the University of Indonesia in Jakarta on July 26, 1995, p. 2-3 . 4 For example, understanding the kind of country the "Republic" means the country is headed by the President, not by the King. 5 Problems in the principles of democracy; See: Aidul Fitriciada Azhari, Constitutional Interpretation and implications Formation of the constitutional system of Democracy Against Autocracy Or (Studies 1945 and the Struggle Interpretation Realizing Democracy in Indonesia), Dissertation Faculty of Law, University of Indonesia, 2005. 6 The definition comes from earlier Wahjono Padmo introduced with the term 'basic understanding of understanding' and 'principal joints' of the state. However, the term 'base' would be able to show the actual direction of the definition.

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State science is theoretical, abstract, and universal.7 The assumption that they are similar conditions in each country (in general) so it can not be directly applied in the practice of the state in particular. While the discussion of the object of constitutional law and administrative law is concrete (specific), the bound state at a particular time and place. Object constitutional law and administrative law are thus closer to the discussion of science specifically state the Republic of Indonesia which is applied the theory of the state of Indonesia. To gain knowledge about the philosophy comprehensive state and the basic theory of the state, it is necessary to serving the general state of science and the science of particular countries as well special state science complement (complementary) to the general state of science; of the order of the general theoretical towards more local order, specific, and practical.8 Meanwhile, in a practical sense (practische staatswissenschaft), theory of state (teoretische staats-wisenschaft) are applied in practice or state activities will be political science. So between the state science (teoretische staatswissenschaft) and political science (practische staatswissenschaft) there is a significant relationship pattern. Meanwhile, according to the tradition of Anglo-Saxon countries, political science has a different content with the state of science for political science is a discipline that stands alone. Sociological analysis of the state in the sense of seeing the country as a building society or a nation as a roundness / intact (ganzheit) include the nature of the nature of the state, the justification of the state, the country, the main types of countries, and destination countries.9 While the analysis of the state of the law or juridikal angle structure (substance), that analyzes the content of a substance or state organizations. Analysis include: how to shape, how its structure, what are the elements of the country, how the existence of the constitution, what country supplies the tools, how the system and its representative institutions, how the country functions regulated, what joints are also used for administration organization running the country. Both of these approaches will be discussed in the framework of the theory sistematic particular state of the Republic of Indonesia. Systematics have been made by Georg Jellinek will remain a relevant reference in discussing the specific terms of the theory of the state, namely the Indonesian nation state theory. The Nature of Theory Stateless. 7

In a more extensive explanation, the nature of the state of science is theoretical, abstract, general, and universal. In this case, the general nature no longer need to be disclosed because it is included in the word 'universal.' Something that normally direct universal general (general) also. However, something that is common is not necessarily universal. 8 Science is a particular state a concrete interpretation of (local) of global thinking in the general state of science. 9 Five sociological theory approach (the state as a social community) called Allgemeine soziale Staatslehre. See: Teuku Hamzah Amir et al (ed.), State Science: Lecture Padmo Wahjono, Faculty of Law, University of Indonesia, Indo Hill Co., Jakarta, 2003, p. 19.

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Must be distinguished between state theory with the theory of the state. If the theory that the state becomes the central point of the discussion is the authority, the power of the government, as a means to discuss the state power structure, why a person or group of people ruling over a group / community. For example, the theory of the justification of state power (rechtsvardigings Theorie), among them are, the theory of theocracy (theocratieshe Theorie), the theory of power (machten Theorie) and others. While the state's theory, it focuses on the self-organization of a container society / community of the nation. Countries considered as a container / embodiment where the peoples organize themselves (de staat in dit is een figuur volksgemenschap zichself organiseren van het gemeenschapwezen). Jellinek named the state's theory as staatbildung Theorie. When discussing the theory of the state, from the standpoint of the law, while at the time discussing the theory of the state, from the standpoint of social and philosophical.10 Jellinek in discussing the general state of science, introducing the theory of two terms (zweiseiten Theorie). This theory is reviewing the state of the two points of view, namely in terms of sociological and juridical terms. In terms of sociological look at the country as a building society or a nation as a sphericity (ganzheit), while judicial notice of the state in terms of its structure or the state as a legal building. Juridical (legal entity legal community) is often called the Allgemeine staats rechtlehre.11 In the study of constitutional law, both points of view it is not impossible to separate, because one component have a strong attachment. This means that the same object of study with a different viewpoint, certainly not likely to be separated. It is not possible to discuss the power of the state of the law alone without viewing angle as well as from a social-philosophical angle. 12 For example, the Constitution can not be understood only if the country reads a text and explanation only. Should be studied historical background, the circumstances at the time the Constitution was made, and the most important is to know the mind of the maker. Therefore, when assessed with other measures, is certain misconceptions or erroneous interpretations that are inconsistent with the intent and spirit of the Constitution. Constitution which were the work of a nation, of course made in order to formulate the will of the nation in question. Given that it has been stated above, it can be concluded that there will be no single Constitution similar to other state Constitution. If anything, it is just limited to understanding-understanding alone (formele stelsel matigheid), while the contents (materiele stelsel matigheid) may

10

Hendra Nurtjahjo, State Science: Development Theory and Supplements Stateless, Eagles, Jakarta, 2005, p. 6-7. 11 See: Teuku Amir Hamzah (ed.), State Science ..... Op. Cit., P. 21. 12 Azhary, Stateless Nation Theory Indonesia (An understanding of pengetian-definition and principles in Constitutional Law, Speech at the inaugural ceremony of Acceptance of Office pronounced as professor of the Faculty of Law at the University of Indonesia in Jakarta on July 26, 1995, p. 3-4 .

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differ according to the values approved by the nation in regulating bernegaranya life. The meaning of "understanding basic understanding" (formele stelsel matigheid) is the thing that is generally understood to have the same meaning. While the meaning of "basic joints" (materiele stelsel matigheid) is the same thing, but because of the influence of a view of life and the conditions of different societies, it becomes different. To understand that in this country the equipment, basic joints used (basic) life of the Indonesian nation state as the basis for analysis. For example, if an analysis of the existence of institutions state in the state system using the idea of democracy as a joint state, in this case will be used the idea of democracy in the constitution of the Republic of Indonesia, namely the idea of people as understood sovereignty the drafters of the constitution.13 The idea of people's power is commonly known as Pancasila democracy; democracy is based on the value of the five precepts; democratic Indonesia. For the Indonesian nation state theory of how and where is sought or found the Indonesian nation state theory. Indonesia has determined that life state regulated in the Constitution of 1945 therefore must be sought in the 1945 Constitution of the Indonesian nation state theory which of course is a typical view of Indonesia can not be separated from the influence of nature and culture of Indonesia, a way of looking which is based on the basic philosophy of the state. Although it should still be understood that the Indonesian nation state theory can not be separated completely from the theory of the state in general, it is only a specialization, namely a general theory that theoretical state associated with the real facts of life in a community group of the Indonesian nation, state and nation. Thus the analysis of the existence of state institutions in the state system refers to a theoretical understanding of the Indonesian nation state. Special theory of the Indonesian nation state is the result of reflection from the theory of the state in general (algemeine staatslehre). The theory of this state can be regarded as 'acculturation' theory of the state that comes from Western Europe with a view of life, history, nuances psikopolitic, and state constitutional law of the Republic of Indonesia.14 Essence Theory Based Tool Equipment Stateless State. State theory starting from the proposition (premisse) is meant by Bierens de Haan, that an association (gemeenschap) naturally has the will to organize. Understanding the organization (Organisatie) in contrast to the sense of order (Ordering). Organizations naturally occurring and is caused by the encouragement

13

In the language of the founding fathers, this idea is also known as 'the idea of democracy' The term 'acculturation' is used by Padmo Wahjono to describe the presence of a fusion or an adjustment in the field of scientific knowledge about the country, among others, were developed in Europe and in Indonesia itself. See Teuku Amir Hamzah, State Science ... Op. Cit., Hlm.1. 14

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that comes from within, is the regularity arises because the intent and will of the mind.15 Bierens de Haan state according Further, is a form which is where a community organizes itself (de staat in dit is een figuur zichzelf organiseren van het gemeenschapswezen). Society is a community of nations mentioned (volksgemeenschap). Affirmed that the state is a product of a community (nation) where she organized herself, not vice versa as stated by Hobbes in his doctrine of the agreement state that is outdated. 16 Detailed elaboration of state theory is a theory of the nature of the nature of the state (das Wesen des Staates). The most urgent question in the theory of the nature of the actual nature of the state is whether the nature of the country. Based on the historical development of the terminology of 'state' or 'state' in the literature, there are several terms that are often used as synonyms. Each equivalent word 'state' itself has its own character. 17 Etymological explanation can help how to interpret the nature of the nature of the state. Nevertheless, sociological and juridical explanation regarding the nature of the nature of the state is still required in a comprehensive understanding regarding the specific state theory. Theory community agreement (pactum unionist social contract) in the arena of constitutional law18 that put the state nature "as a protector of the rights of human rights" in which the state, as the executor of the will of the general (generale Volente). Meanwhile, Hans Kelsen stating the nature of the state as "the embodiment of national legal order" personificatie van het rechtorde because exsistens state building visible from the legal system in regulate the community life of the nation.19 "Padmo Wahjono On the other hand, the properties distinguish the nature of the country in three perspectives. individualistic perspective that promotes the more than a public community or nation. perspective class or classes which considers the state as a tool group / class for oppressing class / grade more than the individual. Whereas integrative perspective that prioritizes community although the community but the human dignity of a person still be appreciated.20 15

JD Bierens de Haan, staatsidee, in: ML Bodlaender Politiea, Grote mannen over staat en Maatschappij, Elsevier, fourth printing, Amsterdam / Brussels / London / New York, 1956, p. 8; as cited by A. Hamid S. Attamimi, Decree of the President of the Republic of Indonesia Role in the Implementation of the State Government, the Graduate School Dissertation, University of Indonesia, Jakarta, 1990, p. 85. 16 Ibid. 17 The term or terms that become the guardian of the country, among others: policy (city-state); country (country-state); community / civiteit; Rijk or reich; He stato; staat; state (nation state); kingdom (monarchy); sultanate (soulthan); country of residence / state / country; Desha, village, desh (such as Bangladesh); land (such as: England, Deutschland, and so forth). 18 See John Locke, published in Man and the State: The Political Philosophers, 1953, p. III cited by Moh. Kusnardi and Harmaily Ibrahim, Introduction to the Law of the State of Indonesia, Center for the Study of State Constitutional Law Faculty of Law, Jakarta, 1983, p 122. 19 See explanation in Padmo Wahjono: Republic Indo¬nesia, Eagle Press, Jakarta, 1986, p. 54. 20 Padmo Wahjono, Pancasila Ideology In Life As constitutional, in Seminar 'Pancasila Ideology In Various Fields As the social, civic, and Stateless', BP-7 center, Jakarta, 1989, p. 8; as quoted by A. Hamid S.

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Finally, the nature of the sociological nature of the state can be seen as: (1) bonding a nation; (2) as an organization authority; or (3) organization as a position (ambten Organisatie); and in the form of excess negative as well as (4) the organization of power. While the juridical nature of the state can be seen. as: (1) the owner or ruler of the land "(feudal patrimonial theory), and (2)" the party that controls or rule "(the result of a reciprocal agreement between the two parties dualistic). history of the theory of the state can be found the type of the modern state, 21 namely the representation democracy and is building a democratic constitutional state. Formation of a democratic constitutional state (rechtsstaat) be the end of all these future goals of modern nation states.22 By definition, a state tool fittings or commonly referred to as a state institution is an institution, the institution that was set up to carry out state functions.23 Based on the theory of the classical theory of the state at least there are some important functions such as policy-making functions of the laws (legislative function), the function or functions implementing regulations governance (executive function), and the function of judge (judicial function). The theory is often the reference 'theory of functions and organs of state' is the trias politica (tri civil). This theory made so that power is not concentrated on one hand or one particular institution. Power should be divided into three major functions to be mutually 'supervise' (check) and each 'offset' (balances) in the operation of real power. Thus, power can be limited according to function and can be controlled internally by other institutions equal, and externally by the people as real constituents are represented by the state institutions. Fittings for the state based on the theories of the state, including the executive power, in this case can be president or prime minister or king, legislative power, in this case be referred to the parliament or by other names such as the legislature, and judicial powers as the Court Supreme. Each country's fittings may have other organs organs to assist the implementation of its functions. Executive power, for example, assisted the deputy minister and the minister who led one particular department. However, in reality, these types of state agencies that applied each country will vary according to the political history of the development of the state and also in accordance with the needs of society in the countries concerned. In keeping with the times, the state functions again later elaborated into tasks detailed descriptions of the state so that the state becomes the purpose of these functions in the form of state duties, whose scope is so much. Then the more Attamimi, 1990, Decree of the President of the Republic of Indonesia Role in the Implementation of the State Government, the Graduate School Dissertation, University of Indonesia, Jakarta, p. 90. 21 In this type occurs blend modern state (convergence) between popular sovereignty and the rule of law. 22 View posts Yusril Ihza Mahendra in: Dynamics Tata Negara Indonesia; and also in the writings of Franz Magnis Suseno Political Ethics. They mention that the highest ideal state in this century is the 'Law of the Democratic State'. 23 Moh. Kusnardi and Bintan Saragih, State Science, Revised Edition, Style Media Primary, Jakarta, 2000, p. 241

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complex activities of the modern state, the more agencies or the equipment needed. Fittings or institution that is determined by the constitution are often no longer able to accommodate the specific tasks that generally require independence and professionalism in the implementation. Thus, the formation of the equipment or the organ of state (agency) has a condition sine qua non for the growth of the country. Similarly, the term evolved diverse equipment in the country, such as organs, institutions, forums, institutions, additional institutions (state auxiliaries), independent bodies (independent state bodies or self-regulatory bodies), state enterprise, and others. Conceptually, the purpose of the institution or state-tool fittings in addition to running the state is a state function, as well as to carry out the functions of government. In other words, the institutions must form a unity process are interconnected with each other within the framework of the implementation of state functions or terms used Sri Soemantri is the actual governmental process.24 Thus, although in practice the type of state institutions of every country is different, the concept of the institutions should work and have relationships in such a way so as to form a whole to realize the practical functions of the state and ideologically realize the goal state. Equipment Tool For Managing Function State State State To Reach Destination. The essence of this idea is the trias politica25 separation of powers is based on the country's main functions: executive, legislative, and judicial. Executive functioning government exercise power; legisative, the law makes provision for the exercise of power; judicial function prosecute violations of the legal provisions have been made. The doctrine of separation of powers function is called the horizontal separation of powers, while the vertical division of power is intended as federalism.26 Trias politica principle is implemented by a system of checks and balances that understanding as follows:27 “system that ensure that for every power in government there is an equal and opposite power placed in separate branch to restrain that force... checks and balances are the constitutional controls whereby separate branches of government have limiting powers over each others so that no branch will become supreme. 24

Sri Soemantri, 1986, on State Institutions According to the 1945 Constitution, Bandung, Alumni. Djoko Soetono translate this term with the term Tri Praja (Trias politica Montesquieu); Chess Praja Van Volenhioven for his theory; Dwi Praja (dichotomy) to Goodnow (Policy making and policy executing). 26 Federalism is called territorial division of powers. This opinion is called by B. Ananda Kusuma, Birth 1945, UI HTN Study Center, 2004, p. 24 26 Ananda also indicates Miriam Budiardjo error stating that Indonesia adheres to the Trias Politica in terms of division of powers (the division of power is not expressly functions) and not the separation of powers (separation of functions is expressly subject). 27 L. Berman and Bruce Allen Murphy, 1999, Approaching Democracy, Second Edition, New Jersey: Prentice Hall, 1999, p. 58 25

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Thus in determining the functions and tasks should refer to the objectives contained in the state constitution. From the basic objective function is then defined function; of these functions are further described in task assignment; of these tasks then shaped organ organ (agency) executing. Institutions of state and government in everyday situations can be set according to the destination country basis.28 In organization theory, its main target is effective, efficient, and equitable. Implementation of a function or a task does not necessarily have to be placed on only one institutional organ alone. Detailed study of the administration tasks that refers to a particular function needs to be done so that organizational structuring state institutions can walk towards the fulfillment of the basic objectives in an efficient state and do not overlap. First of all, in this case stems on the organs that have a specific function namely the state as gezagsorganisatie. This means that the organ will depend on the state function. If you take the state theory of functions of Montesquieu, then there are three functions of the three organs. Montesquieu's teachings are no longer tenable, because it does not distinguish between the functions and organs, as one organ may have more than one function. 29 According to Montesquieu's division of functions can not be used again, so still have to combine this with the distribution function of the state division of Goodnow, the organ which consists of policy making and policy executers. Thus the distribution is contained organs or political office and political organs or positions based on skill. And if it is connected with the views of other scholars of Rowse is the dividing of: (a) the political framework (political office) and; (b) administrative framework (administrative office). Similarly the equipment tools of this country, it has historically been linked to the purpose of each country. But legal experts are not satisfied with it, due to lack of historical theories explaining the real thing, so he menganalisir from a legal perspective, is reviewing how the structure of the state supplies tools legally, so this is all still originate in the state as an organization . If sensible at Jellinek, then there will obtain a settlement regarding the appropriate criteria for dividing the state organs. But if sensible on Hans Kelsen, Hans Kelsen then just look at the norm, according to Herman Heller state as an organ of certain people that seemed to represent the overall authority in carrying out the public interest, the organization which organizes certain tasks is the state. This means that the state is an organization of office, the country's juridical organ of the organization's office. Then the state organs seen from how the organization was formed position. In this case it is forced to look at in terms of history. Seen first that the state functions or duties in the field of state called the office, and this function can not be separated 28

29

Hendra Nurtjahjo. State Science ...... Op.Cit., P. 71 73. Teachings van Vollenhoven with chess praja.

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from the whole, due to the existence of a state function known of the destination country. This means that the function can not be separated from an organization, and the organization was formulated as a partnership based on the division of labor is fixed or lasting. Cooperation that still produce a state organization and the function is called position. Jellinek said that all positions and positions that are also owned or held by a person. So this guy representing the post. Therefore, the organization is a division of labor is fixed, the position also remains, although the person could be alternated. Consequently it is the representative, the representative of a position (ambtsdrager), people always distinguish two kinds of action, namely: (a) the action prive; (b) the action office. The purpose of this action distinction primarily for accountability. Size to hold is: a.) Implementing regulations regarding its function. b.) Must also implement the joints of the law, such as justice, equality, nondiscrimination and others. c.) Must carry out their duties with the best or the best way.

CONCLUSION. State institutions as a means of state equipment into an inseparable whole with the existence of the state. The existence of state organs to fill in and run the country. The formation of state institutions as a means of state equipment is a manifestation of the people's representation mechanisms to govern. Similarly, the establishment of no other country in the interests of the people so that the establishment of state institutions / organs of state / country fittings should represent the aspirations of the people. Aspirations of the people mentioned in the form of the joints and the state values embodied in the theory of the state (of Indonesia). Future changes in constitutional and structural institutional reforms, have also changed the meaning of state institutions. A number of new agencies, which are generally called 'commission' or any other name, either by the Constitution or laws called 'state agency', while these bodies are not the status of the equipment state acting for and on behalf of the state. When judging assignments of new agencies, the government basically does the job of an administrative nature, or as a supporting body. With reference to the theory of the state (of Indonesia) related to the study of equipment in this country, so to avoid confusion with the notion of state institutions due to a variety of new rules in the Constitution or the law, it is necessary to distinguish between state agencies in terms of constitutional and nonconstitutional. As previously mentioned, the state agency in the constitutional sense is confined to a state institution as an element of state organization acting for and on behalf of the state, while the state institutions are not acting for and on behalf of the state not including constitutional state institution. Any action of state institutions in this second sense can be classified and administrative nature only.

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To find out, whether a state agency as acting for and on behalf of the state or not, is determined by the substantive rules regarding the assignment of authority of state institutions concerned. With that knowledge, as well as well known, whether an entity is a state agency or political subdivision not a constitutional body. REFERENCES Assiddiqie Jimly, 2006, the State Development and Consolidation of Post-Reform Institute, Publisher Secretariat General and Registrar of the Constitutional Court of Indonesia, Jakarta. Attamimi A. Hamid S., 1990, Role of the Decree of the President of the Republic of Indonesia for the Operation of the State Government, the Graduate School Dissertation, University of Indonesia, Jakarta. Azhary, Stateless Nation Theory Indonesia (An understanding of the concepts and principles in Constitutional Law, Speech at the inaugural ceremony of Acceptance of Office pronounced as professor of the Faculty of Law at the University of Indonesia in Jakarta on July 26, 1995. L. Berman and Bruce Allen Murphy, 1999, Approaching Democracy, Second Edition, New Jersey: Prentice Hall. Budiarjo Miriam, 1993, Fundamentals of Political Science, PT. Gramedia, Jakarta. Fitriciada Azhari Aidul 2005, Interpretation of the Constitution and its implications Formation of the constitutional system of Democracy Against Autocracy Or (Studies 1945 and the Struggle Interpretation Realizing Democracy in Indonesia), Dissertation Faculty of Law, University of Indonesia. Teuku Hamzah Amir et al (ed.), 2003, the State Science: Lecture Padmo Wahjono, Faculty of Law, University of Indonesia, Indo Hill Co., Jakarta. Hans Kelsen, 1973, General Theory of Law and State, Russell & Russell, New York. Kusnardi Moh. and Harmaily Ibrahim, 1983, Introduction to the Law of the State of Indonesia, Center for the Study of State Constitutional Law Faculty of Law, Jakarta. ___________ And Bintan Saragih, 2000, the State Science, Revised Edition, Style Media Primary, Jakarta. Ananda Kusuma B., 2004, the birth of the 1945 Constitution, HTN Study Center UI. Logemann J.H.A., translator: Makkatutu and J.C. Pangkerego, 1975 A Theory About Positive Constitutional Law, New Ichtiar Publisher-Van Hoeve, Sri

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Jakarta.Soemantri, 1986, on State Institutions According to the 1945 Constitution, Bandung, Alumni. Yusril Ihza Mahendra, 1996, Dynamics Tata Negara Indonesia (Compilation of Actual Problems of the Constitution, the House of Representatives, and System Party), Gema Insani Press, Jakarta. Nurtjahjo Hendra, 2005, the State Science: Development Theory and Supplements Stateless, Eagles, Jakarta. Wahjono Padmo, 1984, Indonesia Today The constitutional problem, Ghalia Indonesia, Jakarta. _____________, 1986, the Republic of Indo¬nesia, Eagle Press, Jakarta. _____________, 1989, Pancasila Ideology In Life As constitutional, in Seminar 'Pancasila Ideology In Various Fields As the social, civic, and Stateless', BP-7 Center, Jakarta.

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CORPORATE ENTREPRENEURIAL CRIME AND CORPORATE CRIMINAL LIABILITY Zulkarnain1

Widyagama University MALANG, INDONESIA E-mail: [email protected] ABSTRACT Corporate crime is an extra ordinary crime that should be fought against with extra ordinary prevention. Such efforts, however, are inversely proportional to the policies in the criminal laws serving as a base for their law enforcement. The Criminal Code (KUHP) that becomes the main foundation of the law merely recognizes natural persons as the subjects of the criminal law. And, it doesn’t consider corporations as the subjects of the criminal law. Therefore, it is necessary to renew the criminal laws. Based on the condition, the penal policy on the system of corporate criminal responsibility in Indonesia will be examined. The research results showed that the criminalization in all forms of corporate crimes, according to the positive criminal law in Indonesia, was recognized as crimes. However, the arrangement between one criminal code and the others varies. The Criminal Code states that the modus of crimes the corporations often did was regarded as a form of criminal act, but it was supposed to be done by a natural person. In other words, it can be stated the Criminal Code did not consider corporations as the subjects of the criminal law. However, in some regulations in the criminal law out of the Criminal Code, corporations were treated as the subjects of the criminal law and they should be responsible for their actions. The system of the criminal responsibility adopted in the positive law in Indonesia tends towards the identification and delegation theories where those who do the mistakes and the source of authorities they possess would be examined. However, comprehensively, the stipulations in one criminal law and the others are different. For example, the one who commits a crime does not have to be the management, but anyone who does something under the name of or for the sake of corporation and the act is done under the scope of the corporate body. However in the draft of a law on the Criminal Code, it is not explicitly stated that the criminal would be condemned, so that it can be interpreted that the criminal should not be responsible for the crime he does since the criminal responsibility has been moved to the corporation.

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The draft of a law on the Criminal Code (RKUHP) as accommodated corporations as the subjects of the criminal law and arranged the mechanism of the criminal responsibility. In the concept of the renewal of the criminal law, it can be seen that the future criminal law will consider corporate crimes as criminal acts and the corporation can be given criminal sanctions. Viewed from the existing stipulations, it is clear that the model and concept adopted are vicarious liability doctrine, although in the model some weaknesses exist.

Keywords: Corporate, Entrepreneurial, Corporate Criminal Liability.

Corporate

Crime,

INTRODUCTION The development of crime along with the growth of corporate entrepreneurship, which grew rapidly in the fields of economic activity, there has been an evil corporation. Corporate crime is an extraordinary crime. In fact, the impact is not only a loss for a moment, but the impact in a very long time. Therefore, Soesanto(1998: 5) found the notion of punishment against the corporation through the criminal policy became stronger and important. Although some of the rules of criminal law outside the Criminal Code regulate corporate crime (recognizes corporations as subjects of a criminal offense), but the system is not set explicitly renponsible. Thus, it must be returned to the legal provisions of the Criminal Code, which clearly does not recognize the corporation as the subject of a criminal offense. Therefore, there needs to be an effort to renew the system of criminal law policy on corporate criminal liability is based on the theoretical-empirical studies in order to tackle corporate crime in Indonesia. One such effort is to conduct a series of research and scientific study of the ins and outs of corporate crime and accountability system, as the basis of academic papers for renewal of national criminal law policy formulation. Research conducted by this author author originated from a concern over the lack of criminal law policy on corporate crime in Indonesia. Various problems which later became the focus of the research is formulated in several ways, namely: How does corporate governance and corporate crime in a positive criminal law and how the effectiveness of law enforcement? How doctrines in corporate accountability system? And How did the concept of criminal policy in the prevention of corporate crime in Indonesia? These three problems are studied with comparated between criminal law policy (penal policy) current (ius constitutum) with the concept of criminal law policy in the future (ius constituendum) in the frame of normative legal studies.

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This research was conducted by combining two research models known in legal research, legal research is normative and empirical legal research. This research was conducted in several cities in East Java as the study sample. As key informants in this study certainly is some law enforcement officials, and some practitioners and academics / experts competent legal. In a study evaluating the operation of the criminal law in society and systematic interpretation of the law, then of course this research is directed as qualitative legal research. Theories of Corporate Crime and Criminal Accountability System The corporation is a term commonly used by the criminal law and criminology experts to refer to what in other fields of law (in particular in the field of civil law) is called a legal entity (recht persoon). Satjipto Rahardjo (1986: 110) provide a definition that the corporation is a legal entity creations. Board which consists of the creation of the "corpus", the physical structure and incorporate into it the law of "animus" that makes the body has a personality. Therefore it is a legal entity created by law, then unless its creation, death was also determined by law. While corporate crime, Simpson declared "corporate crime is a type of whitecollar crime". Simpson, then quoting John Braithwaite, who define corporate crime as "conduct of a corporation, or employees acting on Behalf of a corporation, the which is proscribed and punishable by law." Clinard and Yeager, gives the sense that "a corporate crime is any act committed by the corporation that is punished by the state, regadless of whether it is punished under administrative, civil, or criminal law" (Veda, 1993: 3). At first, the subject of criminal law only naturlijke persoon, while corporate / recht persoon not recognized as subjects of criminal law. This is because the implementation of the principle of non potest Universtas delinquere (Projodikoro, 1986: 193). However, the possibility of a criminal prosecution against a corporation based not only on considerations of utility, but also on the basis of theoretical as well justified (Setiyono, 2003: 11). By making corporations as subjects of criminal law is not new, according to Maine, because long ago, the corporation has been the subject of criminal law. Even in Indonesia as the first village corporation also subject to criminal penalties. Sahetapy (1994: 32) believe that those who reject the corporation as the subject of criminal law, because it held that the corporation was "persona ficta" (subject / human fiction), it can be justified. However, when considered in the socio-economic life, the movements of the corporation shall be controlled by law, and if it deviates, then corporations can be.

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Criminal responsibility born by the continuation of reproach (verwijbaarheid) objective of the act is declared as a criminal offense under the applicable law, and subjectively to meet the requirement for players who may be subject to criminal because of his actions (Priyanto, 2004: 30). This was based on the principle of "actus non facit reum nisi mens sit rea", that person will be convicted if he has a fault (Ramelan, 2004: 6). Long before that, Sudarto (1988: 85) states that: "Dipidananya someone is not enough if the person has committed acts contrary to law or is against the law. So even though such actions meet the formulation of the offense in the legislation, but for punishment is still necessary to drop the requirement for a criminal, that the person doing the act has a fault or guilt (subjective guilt). " Reid (1985: 7) are write:“the law requires criminal intent, or mens rea, the element required to establish culpability. This element is extremely important, for in many cases it will be the critical factor in determining whether and act was or was not a crime.” As above, criminal liability is very dependent on fault (liability based on fault). However, criminal liability for corporations little deviation from the theory of criminal responsibility in generally. The element of "fault" in the corporate crime was not absolutely enforced, despite the presence of faults should still be noted. In this case, known as the doctrine of strict liability, where if a person (corporation) run the types of activities that can be classified as extrahazardous or abnormally dangerous, he or she must be responsible even though he had to act cautiously (Santosa, 1998: 3). On this, many agree with Muladi and Priyatno (1991: 87) that: "On the issue of criminal responsibility, the principle of the error is still maintained, but the developments in the field of law, especially criminal law concerning corporate criminal liability, or fault principle" principle no crime without errors "absolutely not true. The fact that the victim used as a basis to prosecute the perpetrators of criminal responsibility in accordance with the adage "ipsa res loquitur", that the facts already speak for themselves. " In the theory of corporate criminal liability, originally known there are two kinds, namely the doctrine of strict liability doctrine and the doctrine of vicarious liability. However, because still have to consider the elements of the error, then as explained by Muladi (2004: 6), emerged a new theory introduced by Haldane that "Theory of the primary corporate criminal liability" is famous for its "Identification Theory"

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1. Doctrine of Identification Theory This doctrine considers that the act / offense and fault / inner attitude of senior officials seen as deeds and inner attitude of the company. The elements of a criminal offense can be gathered from the acts and mental attitudes of senior officials. On the basis of this identification theory, then all the actions carried out by people who can be identified with a corporation or those who are called "who will constitute its directing mind of the corporation", can be identified as acts or criminal acts committed by the corporation. Thus, corporate liability is not based on the concept of accountability substitute (vicarious liability). 2. Doctrine of Vicarious Liability Vicarious liability means that a person who has no personal fault, is responsible for others act (accountability substitute). Such accountability is almost entirely devoted to the offense in law (statutory Offenses). According to Arief (1996: 236), vicarious liability is the legal responsibility for the actions of any person committed by another person (the legal resposibility of one person for the wrongful acts of another). According to this doctrine, an employer (employer) is the main responsible of the actions of the workers / employees who perform the act within the scope of the task / job. This was based on "employment principle" which states "the servant's act is the master's act in law". 3. Doctrine of Strict Liability In the doctrine of strict liability, liability should not be considered an error. Because the responsibility of corporations, not absolute error applies. Person / corporation can already be accounted for in that person even though no errors. This doctrine does not require mens rea or fault of the manufacturer (Atmasasmita, 2000: 79). Model of corporate criminal liability answers can not be separated from the two subjects of criminal law in corporate crime, that person as a director and the corporation itself. So related to the position of the corporation and the nature of corporate criminal liability in corporate crime, there are three models of corporate criminal liability, namely: (1) The Board as a maker and board responsible; (2) The corporation as a maker, and board responsible; (3) Corporations as well as makers and responsible (Reksodiputro, 1994: 72). Corporate Setting the Indonesian Penal Positive Positive criminal law in the scholarly study of criminal law is meant any criminal laws were declared valid or enforced at this time. Therefore, it is a positive Indonesian criminal law is the Code of Penal (Penal Code) were enacted under Law No. 1 of 1946 and several amendments there to, and any criminal legislation specifically enforced in outside the Criminal Code. From the results of a normative study of the criminal justice system and subsystems, discovered the fact that the law of the Criminal Code which became Book Three

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the parent of any criminal legislation apparently does not regulate corporations as subjects of criminal law. The formulation of the articles that many use the phrase "He who ....", ".... Everyone", "A mother ...." and others indicate that the Criminal Code only recognizes naturlijke persoon or natural person (human) as the subject of criminal law. While the corporation or legal entity is not at all recognized as subjects of criminal law in the Criminal Code. Despite the provisions set forth in Article 59 which states that "In determining the penalty for a violation, then the board, one member of the board or the commissioner, the penalty imposed on the board or commissioner, if it is obvious that the violation has occurred outside of dependents. "Although this provision only applies to the crime of violation, but obviously it can be concluded that the Criminal Code does not recognize corporations as subjects that could be subject to criminal sanctions. However, when seen papa provisions of law outside the Criminal Code, then found some provisions governing the corporation. Of the many existing regulations, can be grouped in three models of regulation: 1. define the corporation as the subject of criminal law but his criminal responsibility remains charged to the person as the subject of criminal law; 2. define the corporation as the subject of criminal law and imposes criminal responsibility to the corporation; 3. define the corporation as the subject of criminal law and imposes criminal responsibility to corporations, as well as threaten the corporation with criminal deprivation of liberty. From other studies suggested that positive criminal law in force in Indonesia is still chaotic. This is related to the absence of consistency between the regulation set out in the Criminal Code with a setting outside of the Criminal Code. Where corporate settings outside the Criminal Code there are some who have recognized corporations as legal subjects. But setting it still tends to be in doubt, because of the recognition of the law of the corporation as a legal subject is still denying liability corporation in law enforcement (Zulkarnain, 2007: 37). What is presented above, is justified by several research resource persons who also had conducted a similar study that the system of corporate criminal liability in the Indonesian criminal justice system still refers to a paradigm that puts people as criminals (Sunardi & Tanuwijaya, 2002). So despite the obvious offender is a corporation, but that is the nature accountable.

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Corporate Crime and Criminal Responsibility System in Indonesia Positive Law Corporations are not recognized as subjects of criminal law in the Criminal Code. But in a positive criminal law outside the Criminal Code that regulates many corporations are recognized as subjects of criminal law. For example, Law No. 23 of 1997 on Environment, Law No. 20 Year 2001 on Eradication of Corruption, Law No. 8 of 1999 on Consumer Protection, Law on Money Laundering, Broadcasting Act , and so on. Even since the anti-regime economic crimes in 1955, has issued Emergency Law No. 7 of 1955 on the Investigation and Prosecution of Economics Crime (UUTPE) has been expressly acknowledges Legal Entity (in caso: Corporations) as the subject of criminal law and accountable . The experts who agreed to put the corporation as the subject of criminal law states the following reasons: 1. Punishment caretaker is not enough to hold the repression of offenses committed by or with a corporation. So it is also necessary corporate punishment, corporate and board, or the board alone. 2. In the social and economic life, corporations increasingly play an important role as well. 3. If the criminal law is only defined in terms of the individual, the community save goal was not effective, therefore there is no reason to keep pressing and can oppose corporate penalty. 4. Punishment corporation is an effort to avoid criminal prosecution action against the corporation's own employees. " In Sahuri dissertation research (2004) stated that for corporations criminally accountable, there are four main issues that need to be considered, namely (1), the problem formulation prohibited acts; (2), the determination of the corporation guilty problems; (3) issue sanctions against the corporation; and (4) the nature of corporate responsibility. For the formulation of prohibited acts and corporate responsibility is less clear in determining that anyone can commit criminal acts and corporate responsibility. Errors in the determination of the corporation, which is a criminal law veins, is very difficult because the error is not transferred to the corporation in private corporations, because who committed the crime is the person / committee. From the above results, then recommends that until now there is no case law on the corporation either as defendant or (especially) as a convict, so the need for a study of the law, whatever the law is causing it to be barren. In addition, there should be a study of sentencing policy and corporate accountability in

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the Indonesian criminal law policy perspective in the hope of uncovering the legal issues related to corporate responsibility. Sunardi’s research (2006: 139-140) also concluded that the regulation of corporations as subjects of a criminal act must be clear and unequivocal to authentically include the general provisions of the Criminal Code which is now being refurbished. So outside the provisions of the Criminal Code should be followed. However, Zulkarnain (2007: 38) considered that the setting of the system of corporate accountability in both the specific legislation outside the Criminal Code and the Criminal Code in the latest draft was, no clear and comprehensive. Empirical and juridical aspects as well as the public interest associated with the criminal prosecution of corporations in terms of social welfare policy has not been considered. From the research it was found that the Indonesian criminal justice system is still not fully acknowledge that the corporation is subject to legal manner. Although there are several products policies outside the Criminal Code criminal law governing corporate responsibility, corporate accountability but the system is still adopted the doctrine of vicarious liability used. It is the same as the corporation has not been acknowledged as the subject of criminal law. Therefore, the need to recommend that the reformulation of policy on corporate criminal liability system and enter the formula in the Book of the Law of Criminal Law. Related to criminal law reform on corporate crime prevention, it should be noted that in the design of the New Criminal Code (Criminal Code Concept) in the general description Book I declare that: "Given the progress made in the field of economy and trade, the subject of criminal law can no longer be restricted only to human nature (natural person) but also includes human law (Juridical Person), commonly called the corporation. With espoused understand that the corporation is subject to the law, means a corporation as a form of business entity is also possible liability should still be shared by corporations and trustees or administrators only. " Thus, it is necessary to remember that the policy reforms of criminal law, particularly in relation to corporate crime prevention by making the corporation as the subject of criminal law can be held accountable. In addition to reviewing the criminal laws applicable positive, researchers also examine the concept of the new Criminal Code (Bill-Criminal Code) which is ius constituendum. Where the Criminal Code Bill has been designed (with various amendments thereto) since 1964 and the last was composed concept of the Criminal Code in 2005 In the year 2004/2005 of the Penal Code concept mentioned in Article 47 that "The corporation is the subject of a criminal offense."

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And Article 48 determines that "The offenses committed by the corporation when it is done by people who act for and on behalf of the corporation or for the benefit of the corporation, based on employment or other relationship based, within the scope of the corporation's business, either individually or jointly." Given the positive provisions in criminal law and Indonesian Criminal Code Concept which have been described above, appeared that the corporation has been recognized as the subject of criminal law under Indonesian criminal justice system even though the Criminal Code is not set. The corporate accountability system adopted by the criminal justice systems is determining the corporation as well as the makers and corporate responsibility, with due regard to the perpetrator functional theory based on the doctrine identivication. This doctrine considers that the act / offense and fault / inner attitude of senior officials seen as deeds and inner attitude of the company. The elements of a criminal offense can collected from act of inner attitude of some senior officials. In this context, Sutan Remy Sjahdeiny (2006: 97) said delegation doctrine of justification that can be used as the basis for imposing criminal liability can be carried out by employees of the corporation. According to this doctrine, the reason to be able to impose criminal liability on corporations is the delegation of authority from one person to another to exercise its authority. It seems that the concept of the Criminal Code also makes this doctrine as a reference in applying for corporate criminal liability. CONCLUSION From some initial analysis related to Indonesian criminal law policy on corporate criminal liability system, it can be concluded some of the following: 1. Corporate crime is already recognized as a form of crime under Indonesian criminal law positive. However, the arrangement between the criminal law (Criminal Code) with other criminal law regulations vary. Criminal Code stipulates that the modus crimes often committed by a corporation as a form of criminal offense, but it was deemed to have been done by natural persona. In other words, it can be said that the Criminal Code does not recognize corporations as subjects of criminal law. While in some criminal laws outside the Penal Code recognizes the corporation as the subject of criminal law and criminal accountability imposes on corporations and therefore can be imprisoned. 2. The system adopted criminal liability in accordance with the positive Indonesian criminal law doctrine favors the theory of identification and delegation doctrine. Where in addition to look at the location of the fault of the manufacturer also pay attention to the source of the authority to act possessed. However, when viewed in a comprehensive manner, the provisions of the criminal law one with another criminal laws also vary. For example, about the perpetrator, where the person who committed the crime should not be administrators but whoever did it on behalf of or for the Book Three

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benefit of the company. It was committed within the scope of the legal entity. Moreover, in the Environmental Code confirmed that the creator remains a criminal sentenced although the corporation had forced responsible for the actions of the perpetrator. While in the Draft of Criminal Code, on fixed dipidananya the perpetrator, not confirmed, so it can be interpreted, the offender is no longer accountable for the perpetration of a criminal offense because of criminal responsibility has been transferred to the corporation. 3. Draft Criminal Code has accommodated the corporation as well as the subject of criminal law and regulate criminal accountability mechanisms. In the concept of criminal law reform, it seems that the future of the criminal law judge that corporate crime is a crime and against the corporation may be subject to criminal sanctions. If seen in some of the provisions that govern them, it appears that the model and the concept used is the doctrine of vicarious liablity.

REFERENCES Amrullah, Arief. 2003. Political Framework of Criminal Law in the Protection of Victims of Economic Crime in Banking, Bayumedia Publishing, Malang Arief, Barda Nawawi. 1996. Bunga Rampai Kebijakan Hukum Pidana, Citra Aditya Bakti, Bandung Atmasasmita, Romli. 2000. Comparative Criminal Law, Mandar Maju, Bandung Dirdjosisworo, Seodjono. 1991. Indonesian Penal Code and the Post- Industrial Society were indications Crime, Occupation Inauguration Speech Professor at the Faculty of Law. UNPAR, Bandung Gillies, Peter. 1990. Criminal Law, The Law Book Company Limited, Sidney Hofnagels, G.P. 1969. The Other Side of Criminology. Muladi dan Barda Nawawi Arief, 1992. Theories and Criminal Policy, Penerbit Alumni, Bandung Muladi dan Dwidja Priyatno. 1991. Corporate Responsibility in Criminal Law, Sekolah STHB, Bandung Muladi, 2002. Democratisation, Human Rights , and Legal Reform in Indonesia, The Habibie Center, Jakarta Muladi. 2004. Corporate accountability in the Criminal Law (Corporate Criminal Liability), Papers on National Seminar on Aspects of Criminal Liability in Public

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Policy of Corruption Act , the Attorney General and FH Diponegoro University, Semarang 6-7 Mei 2004 Priyatno, Dwidja. 2004. Legislation Policy on Corporate Criminal Liability System in Indonesia, CV. Utomo, Bandung Priyatno, Dwidja. 2005. Rancangan KUHP Tak Mengatur Sanksi Korporasi, dalam http://www.pikiran-rakyat.com/cetak/2005/1005/01/1102.htm tanggal 26 Oktober 2005 Priyatno, Dwija. 1991. An Overview Of Corporate Responsibility in Criminal Law and Prospects , Graduate Program Thesis Diponegoro, , Semarang Prodjodikoro, Wirjono. 1986. Principles of Criminal Law Indonesia, Eresco, Bandung Rahardjo, Stjipto. 1986. Ilmu Hukum, Alumni, Bandung Ramelan. 2004. Corporate Responsibility in Criminal Law, paper at the National Seminar on Aspects of Criminal Liability in Public Policy of Corruption Act , the Attorney General and FH Diponegoro University, Semarang 6-7 Mei 2004 Reid, S.T. 1985. Crime and Criminology, Hola, Reindard & Winston Reksodiputro, Mardjono. 1994. Hak Asasi Manusia dalam Sistem Peradilan Pidana, Pusat Pelayanan Keadilan dan Pengabdian Hukum, Universitas Indonesia, Jakarta Sahetapy, J.E. 1994. Corporate Crime, Eresco, Bandung Sahuri L. 2004. Corporate Responsibility in the Indonesian Criminal Policy Perspective , Dissertation Legal Studies , Airlangga University, Surabaya Santosa, Mas Ahmad. dkk. 1998. Application of Principle of Absolute Liability ( Strict Liablity ) in the Field of Environment, Indonesia Center for Environmental Law (ICEL), Jakarta Setiyono. 2003. Corporate Crime, Bayumedia Publishing, Malang Sjahdeini, Sutan Remy. 2006. Corporate Criminal Liability, Grafittipress. Jakarta Sudarto, 1983. Criminal Law and Community Development : An Analysis of the Reform of Criminal Law, Sinar Baru, Bandung Sudarto. 1988. Hukum Pidana 1, Badan Penyediaan Bahan-bahan Kuliah UNDIP, Semarang Sunardi dan Fanny Tanuwijaya. 2002. Criminal Deprivation of Freedom for Corporate , Islamic University of Malang, Malang

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Susanto, I.S. 1998. Review of Economic Crime criminological , Papers on Criminal Law and Criminology Upgrading , Diponegoro University, Semarang 23-30 Nopember 1998 Weda, Made Darma. 1993. Beberapa Catatan tentang Kejahatan Korporasi, Makalah pada Seminar Nasional Viktimologi III, Fakultas Hukum Universitas Airlangga Surabaya, 20-21 Desember 1993 Zulkarnain, 2007. Penal Reform of Criminal Law Policy on Corporate Criminal Liability and Punishment Model, Hasil Penelitian Hibah Bersaing. DP2M Dikti. Univ Widyagama. Malang.

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UNDERSTANDING SOCIALENTREPRENEURSHIP AND BUSINESSENTREPRENEURSHIP Rahmat Setiawan1 Airlangga University SURABAYA, INDONESIA E-mail: [email protected] ABSTRACT This paper aims to review and discuss social entrepreneurship and business entrepreneurship. To analyze the issues, this paper makes analysis of differences and similaritiesbetween social entrepreneurship and business entrepreneurship. Social entrepreneurship and business entrepreneurship have a main difference in mission run by social entrepreneurs and business entrepreneurs. Social entrepreneurs have mission tocreate and sustain social value.But, business entrepreneurs havemission to create and sustain private business value. On the other hand, social entrepreneurship and business entrepreneurship have similarities in four aspects: (1) Recognizing and relentlessly pursuing new opportunities to serve their mission, (2) Engaging in a process of continuous innovation, adaption, and learning, (3) Acting boldly without being limited by resources currently in hand, and (4) Exhibiting heightened accountability to the constituencies served and for the outcomes created. By analyzing differences and similarities between social entrepreneurship and business entrepreneurship, we can clearly understand what is social entrepreneurship and business entrepreneurship.

Keywords: Entrepreneurship, Social Entrepreneurship, Business Entrepreneurship, Social Value, Private Business Value

INTRODUCTION Entrepreneurship is one of the most popular issues now, both in empirical studies and in literature studies. Especially in literature studies, the issue of entrepreneurship has been reviewed and discussed in many literatures, not only in business literatures, but also in non-business literatures. It shows that the field of entrepreneurship has many dimensions, including business dimension and nonbusiness dimension (for example: social dimension). Therefore, in the literature studies of entrepreneurship, there are topic of business entrepreneurship(see:

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Rampini, 2000; Manuel, 2006) and topic of social entrepreneurship (see: Licht and Siegel, 2006; Dees, 2001, and Seelos and Mair, 2005). According to Seelos and Mair (2005), a growing number of initiatives all over the globe seem to be defying the obstacles that have prevented business from providing services to the poor. Collectively, those initiatives constitute a phenomenon that has been dubbed “social entrepreneurship”. Employing novel types of resources and combining the in new ways, social entrepreneur is a rich field for discovery of in spired models of value creation (Seelos and Mair, 2005). This paper addresses the issue of social entrepreneurship and business entrepreneurship. To develop the issues, this paper is arranged into five parts, including (1) introduction, (2) definition and characteristics of entrepreneurship in generally, (3) social entrepreneurship, (4) business entrepreneurship and (5) conclusion based on literature studies of these topics and making differences and similarities between social entrepreneurship and business entrepreneurship. ENTREPRENEURSHIP Term of entrepreneurship has many meanings. There are many definitions of entrepreneurship. According to Ahmad and Seymour (2008), definitions of entrepreneurship show in table 1. Table 1. A Superficial Review of Extant Definitions No Essence of definition Publication 1 Entrepreneurship buy et certain prices in the present and Cantillon, sell at uncertain prices in the future. The entrepreneur is a 1755/1931 bearer of uncertainty 2 Entrepreneurs are ‘pro-jectors’. Defoe, 1887/2001 3 Entrepreneurs attempt to predict and act upon change Knight, 1921, within markets. The entrepreneur bears the uncertainty of 1942 market dynamics. 4 The entrepreneur is the person who maintains immunity Weber, 1947 from control of rational bureaucratic knowledge. 5 The entrepreneur is the innovator who implements Schumpeter, change with in markets through the carrying out new 1934 combinations. These can take several forms:  the introduction of a new good or quality thereof,  the introduction of a new method of production,  the opening of a new market,  the conquest of a new source of supply of new materials or parts, and

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

6

7 8 9 10

11

12

13

14

the carrying out the new organization of any industry. The entrepreneur is always a speculator. He deals with Von Mises, the uncertain conditions of the future. His success or 1949/1996 failure depends on the correctness of his anticipation of uncertain events. If he fails in his understanding of things to come he is doomed... The entrepreneur is co-ordinator and arbitrageur. Walras, 1954 Entrepreneurial activity involves identifying Penrose, opportunities within the economic system. 1959/1980 The entrepreneur recognizes and acts upon profit Kirzner, 1973 opportunities, essentially an arbitrageur. Entrepreneurship is the act of innovation involving Drucker, 1985 endowing existing resources with new wealth-producing capacity. The essential act of entrepreneurship is new entry. New Lumpkin entry can be accomplished by entering new or established &Dess, 1996 markets with new or existing goods or services. New entry is the act of launching a new venture, either by a start-up firm, through an existing fir, or via ‘internal corporate venturing’ The field entrepreneurship involves the study of sources Shane of opportunities; the processes of discovery, evaluation, &Venkataraman, and exploitation of opportunities; and the set of 2000 individuals who discover, evaluate, and exploit them. Entrepreneurship is a context dependent social process Ireland, Hitt, through which individuals and teams create wealth by &Sirmon, 2003 bringing together unique packages of resources to exploit marketplace opportunities. Entrepreneurship is the mindset and process to create and Commission of develop economic activity by blending risk-taking, the European creativity and/or innovation with sound management, Communities, within a new or an existing organization. 2003 Sources: Ahmad, Nadim and Richard G. Seymour, 2008. Defining Entrepreneurship Activity: Definitions Supporting Frameworks for Data Collection.Working Paper.Organization for Economic Co-operation and Development.

Based on information in table 1, before Schumpeter proposed his definition of entrepreneurship in 1934, definitions of entrepreneurship were very simple. But, since 1934, definitions of entrepreneurship become very complicated. All definitions of entrepreneurship that summarized by Nadim andSeymour (2008),

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do not make differences between business entrepreneurship and social entrepreneurship definition. In other words, all definitions of entrepreneurship are still general. Therefore, in generally, the characteristics of entrepreneur include: high need for achievement, willingness to take risks, strong self-confidence, high ability to identify potential opportunities better than most people, high sense of urgency that makes them action oriented, high detailed of the keys to success in their work and their lives, and high access to outside help to supplement their skills, knowledge and abilities, high ability to create value, being able to make innovation and to become change agent (Nadim and Seymour, 2008; Manuel, 2006, and Dees, 2001).These characteristics of entrepreneurship above is general, so they are included in both businessentrepreneurship and social entrepreneurship.

SOCIAL ENTREPRENEURSHIP According to Dees (2001), social entrepreneurs play the role of change agents in the social sector, by:  Adopting a mission to create and sustain social value (not just private value),  Recognizing and relentlessly pursuing new opportunities to serve that mission in creating and sustaining social value,  Engaging in a process of continuous innovation, adaption, and learning to create and sustain social value,  Acting boldly without being limited by resources currently in hand to create and sustain social value, and  Exhibiting heightened accountability to the constituencies served and for the outcomes created in social mission. This is clearly an “idealized” definition. The closer a person gets to satisfying all these conditions, the more that person fits the model of social entrepreneur. Those who are more innovative in their social work and who create more significant social improvement will naturally be seen as more social entrepreneurial (Dees, 2001). The definition of social entrepreneurship is consistent with the definition of entrepreneurship proposed by Paredo (2006) and Seelos and Mair (2005). Social entrepreneurship doesn’t mean that the entrepreneur may not gain profit, but looking for profit is not a social entrepreneur mission. Focus of a social entrepreneur is creating and sustaining social value. Refer to Seelos and Mair (2005), social entrepreneur combines the resourcefulness of traditional entrepreneurship wit mission to change society. One social entrepreneur, Ibrahim Abouleish, received the “Alternative Nobel Prize” for his Sekem initiative. In 2004, e-Bay founder Jeff Skoll donated 4,4 million pounds to set up a social entrepreneurship research center. And, many social entrepreneurs have mingled with their business counterparts at the World Economic Forum in Davos.

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BUSINESS ENTREPRENEURSHIP On the other hand, based on notion stated by Dees (2001), business entrepreneurs play a role as change agents in the business sector, by:  Adopting a mission to create and sustain private business value,  Recognizing and pursuing new opportunities to implement that missionto create and sustain private business value,  Engaging in a continuous innovation, adaption, and learningprocess in creating and sustaining private business value,  Acting boldly without being limited by owned resources in creating and sustaining private business value,  Exhibiting high accountability to their constituencies and for the outcomes created in realizing their business mission. Based on the definition, a person who has more business entrepreneurial will have more power of innovation in doing the private business and will be able to make more significant improvement in the private business. So, the main key wordsattached to a business entrepreneur are “private business mission”. Thefocus of business entrepreneurmission is creating and sustainingprivate business value. Therefore, mission of business entrepreneurship do not focuses in social mission, for examples: alleviating poverty, empowering communities, promoting education, protecting environment, etc. Specifically, the mission of business entrepreneur is consistent with the goal of business in traditional economic literatures. The goal of business entrepreneur is to maximize profit or to maximize value of his business. Therefore, the main issue in business entrepreneurship is self-interest of the entrepreneur especially in maximizing profit by doing private business. CONCLUTION In this part, we conclude that there are differences andsimilarities between social entrepreneurship and business entrepreneurship. Differences between social entrepreneurship and business entrepreneurship are showed by difference mission between social entrepreneurship and business entrepreneurship. The mission of social entrepreneurship is creating and sustaining social value, and the other hand, the mission of business entrepreneurship is creating and sustaining private business value. The similarities between social entrepreneurship and business entrepreneurship include four aspects. First, both social entrepreneurship and business entrepreneurship recognize and relentlessly pursue new opportunities to implementtheir mission. Second, both social entrepreneurship and business entrepreneurship engage in a process of continuous innovation, adaption, and learning to realize their mission. Third, both social entrepreneurship and business entrepreneurship must act boldly without being limited by resources currently in hand to implement their mission. Forth, both social entrepreneurship and business

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entrepreneurship exhibit high accountability to the constituencies served and for the outcomes created in realizing their mission.By reviewing differences and similarities between social entrepreneurship and business entrepreneurship, we will deeply understand the meaning of social entrepreneurship and business entrepreneurship. REFRENCES Ahmad, Nadim and Richard G. Seymour, 2008.Defining Entrepreneurship Activity: Definitions Supporting Frameworks for Data Collection.Working Paper.Organization for Economic Co-operation and Development. Dees, J. Gregory, 2001.The Meaning of “Social Entrepreneurship”.Working Paper. Duke University’s Fuqua School of Business. Licht, Amir N., and Jordan I. Siegel, 2006.The Social Dimensions of Entrepreneurship. In Forthcoming in Mark casson and bernardYeung, eds., Oxford Hanbook of Entrepreneurship. Oxford University Press. Manuel, Eduardo G., 2006. Entrepreneurship and Economics.Working Paper.University Autonoma of Lisbon. Paredo, Ana Maria, 2006. Social Entrepreneurship.Working Paper.University of Victoria. Rampini, Adriano A., 2000. Entrepreneurial Activity, Risk and The Business Cycle. Working Paper.Northwestern University. Seelos, Christian, and Johanna Mair, 2005. Social Entrepreneurship: Creating New Business Models to Serve the Poor. Business Horizon, 48, 241-246. Schumpeter, J A. 1934. The theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Cambridge, MA.: Harvard University Press.

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SCIENCE AND TECHNOLOGY FOR ENTREPRENEURSHIP PROGRAM IN ECONOMIC FACULTY UNTAG SURABAYA Erwin Dyah Astawinetu1, Yulyar Kartika Wijayanti2, Rini Rahayu Sihmawati3 Universitas 17 Agustus 1945 Surabaya INDONESIA E-mails: [email protected], [email protected], [email protected]

ABSTRACT Unemployment in Indonesia has become a crucial problem until now.The big number of unemployment has also happened in the level of university graduates. The Indonesian government has done various programs to solve this problem, for example Science and Technology for interpreneurship (IbK) by giving fund for students who begin their businesses since they are still in the university. Economic Faculty Untag Surabaya allocates this material of entrepreneurship since the first semester until third semester. In the first semester students get 70% theory dan 30% practice. In the second semester they get 50% theory and 50% business creative. Then in the third semester they get 30% theory and 70% business practice by using limited fund. The problem of running this program is about fund and intensive couching. This IbK propgram is helpful for students who begin their businesses and they can also get couching from their lecturers during one or two years. Every year this program is necessary for IbK team to list 20 students as IbK tenants, and they should graduate minimally five students as new independent enterpreneur. In the second year we should be recruiting new tenant instead of students who had graduated from the first year and also in the third year. The IbK team in the economic faculty Untag Surabaya who had graduated 10 students as new independent entrepreneur with various item of products, and we plan to recruit 10 new tenants for the second year program.

Keywords : IbK, tenants, Students, graduate, new independent enterpreneurs

INTRODUCTION Entrepreneurship is the capacity and willingness to develop, organized and manage a business venture along with any of its risk in order to make a profit

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(www.business dictionary.com). The examples of entrepreneurship is the starting of new businesses. In economics entrepreneurship combined with land, labor and natural resources and capital can produce profit. Entrepreneur spirit is characterized by innovation , risk taking and is an essential part of a nation’s ability to success in an ever changing and increasingly competitive global market place. According to Julianto Eka Putra ( Becomming an Entrepreneur is Easy: 2008;9), entrepreneur is differenciated by the capital they used. By capital they used, entrepreneur can be divided in to three categories as follow : 1) 1 M entrepreneurs, are people who doing their business using 1M capital, which is the M is Me (her/his self), 2) 2M entrepreneurs are people who doing their business using 2M capital, which the two M are Me + Material, 3) 3M entrepreneurs are people who doing their business using three M capital, which the three M are Me + Material + Management. From those definition we can conclude that entrepreneur can be differenciated according to the capital they used to do business that can create profit. Entrepreneurship is one of the important subjects in schools and universities especially in Indonesia. Nowadays that subject is a trending topic in the world. Unemployment in the world has becoming worldwide crucial problems. It happens also in Indonesia. Today it becomes a very crucial problem especially from educated people from schools and also universities. We can see the unemployment data in Indonesia from this table as follow: Table 1 Unemployment in Indonesia year 2009-2012 Education No 1

3 4

Yunior High School

5

Senior High School

6

Senior High school Specialty Diploma I,II,III/Academy University Total

7 8

August

2011 February

August

2012 February

August

2013 February

59 066

157 586

92 142

190 370

123 213

82 411

109 865

547 164

600 221

552 939

686 895

590 719

503 379

513 534

1 275 890

1 120 090

1 415 111

1 449 508

1 421 653

1 803 009

1 890 755

1 716 450

1 701 294

1 822 395

2 264 376

2 042 629

1 983 591

1 832 109

1 841 545

1 082 101

1 032 317

990 325

1 041 265

847 052

Uneducated Elementary School( graduate/ not graduate Elementary School

2

2010 February

1 522 465 1 657 452 2 111 256 1 336 881

1 858 1 449 2 123 1 192

402 661 149 195

538 186

443 222

434 457

244 687

252 877

196 780

192 762

820 020

710 128 8 319 779

612 717

492 343

541 955

438 210

421 717

8 117 631

7 700 086

7 614 241

7 244 956

7 170 523

8 592 490

Source: Survey of National employment (Sakernas) 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, dan 2013

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From this data we can conclude that unemployment is still crucial problem that has to be solved. The government has done various giving funds for business capital with small installments to pay every month such as KUR (public business credit) then in the university they will give HIBAH program for public for reducing the unemployment program. This government step is already the right way. Because to make it become develop country 2.5% of the population have become entrepreneurs. The amount of the entrepreneurs in Indonesia 2013 only 1.9% from totally 250 millions people. That amount is very small compared to other Asian countries. Singapore, the amount of entreprenuers already 7% from the whole Singaporeans. While in Japan already got 10% from the amount of the population. (Tribunnews.com.Jakarta, 14 September 2013). From the data , if Indonesia wants to be a developped country, the amount of the entrepreneurs must be increased. Economic Faculty in Untag Surabaya has mission to make graduate entrepreneurs , so we give entrepreneurship program in 3 semesters . By arranging the program as follow: business motivation and open minds in theory in the first semester, creative industry training in the second semester and business practise in the third semester. So with the IbK program from the government DIKTI, as lecturers in entrepreneurship program in economic faculty is really helpfull program supporting our program also the students. They will get trainings of many business practitioners and also some expert lecturers in some lecturings such as business motivation, business online, marketing and blog making, business plan so the students can make the students to open on line shops which only needs a small amount of money to start. The other trainings for food is about PIRT (industry permit for home industry) all of these can develop the students knowledge . From the book of Anda ingin sukses , by keeping learning in various kinds of knowledge, understanding what you have to do and do what you have to do (Yulianto Eka Putra , 2007:171). With this IbK program , we hope that the students can get fund raising for business capital which is very usefull for their business. With the intensive guidance from the lecturers , almost everyday who are always ready starting from 7 o’clock to 3 o’ clock in the afternoon, we wish all will be running as we want. In the days coming they will become a real entrepreneur since in Campuss. The IbK program which is given by the government in DIKTI, that we should make 20 new entrepreneur students and also guide them ,the 20 students every year. Minimally 5 students every year become a real entrepreneur when they are still in the campuss. If it is happened in every university in Indonesia, there are 5 new entrepreneur students , we can count how many unemployment people will be decreased every year. If the new entrepreneurs can recruit 2 new workers in their business , the effect of unemployment from the business happened from university will support the IbK program. Moreover there are other kind of programs from the government also can decrease unemployment such as Bapemas, P3EL. The duty to make new entrepreneurs form the students will not be easy Book Three

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because many things have to be done concerning with Tri Darma university by lecturers. The Research Objectives The research objectives are: 1. To give a clear definition and description of entrepreneurship program to the student, 2. To encourage the students to do business from a very small scoupe in the university when they are still students so when they pass from university they have already become entrepreneuers, 3. To get new student entrepreneurs every year minimally 5 students, those 5 students have already done and can do business by themselves without guiding and criteria from IbK team and guidance lecturers. If there is problem they still can consult with their lecturers. Most of the lecturers are structural in the faculty also the guidance lecturers. The schedule for the guidance is from 7 o’clock in the morning until 3 o’clock in the afternoon. We wish to have more than 5 students every year and these (20) IbK students will be planned in E Club organization in Economic faculty and periodically will hold meetings for sharing and consulting also discussing ablout business in this IbK program. We hope The bK tim will share their successfull business and experiences to make the others success. If there are problems with the discussion it will help each other . The Research Method : The Recruitment pattern of IbK tenants For recruiting the IbK students, our IbK team made announcement by posters before to get the attention from all students who had program entrepreneurship 1, 2, or 3 in the year of 2011/2012 focusing to the students who have done business in economic faculty and also students from other faculties in Untag Surabaya who has done business for one month from February 2012. The students register and show the products that they had made and also photos and description to the IbK team. The selection process The Students Selection The students must make proposal of their business simple and propose to IbK team for the next selection. After selecting we choose 20 proposals of the students business which are chosen and fit with the IbK program. Later we made schedule for them to have matriculation program for entrepreneurship program such as, making business proposal, business online, conventional marketing, PIRT and packaging , business motivation and others. After they have already done the training and workshop about successfull business. The students must present the business proposal also made in blog if they will do in internet. The Guiding lecturers selection The guiding lecturers are chosen according to the business that the lecturers can guide for the students. Business visitation program Book Three

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Besides the students are given the training for business overview, the students do the visit to see some business retail such as Bakpao Telo Lawang, Handuk Kasri Pandaan , Kaboki bags and Tanggulangin bags and shoes. This visit is for making a broader view of business that they will be done later. The Business implementation and lecturers guiding After they have got the business training next after that they will get fund for business capital by the guiding lecturers. Graduate criteria as independent entrepreneur IbK program can pass as independent entrepreneur if the students make financial report and the bills for their business every month showing profit and also the omzet of the increasing sales. There are 2 aspects in this IbK program , the food and technology aspect and economic aspect. The team composed of 3 persons, there are one lecturer who is competent in food technology as practitioners and 2 persons of economic faculty lecturers who are competent in management , entrepreneurship and business. The students guiding have been done continually by the help of practitoners who have done business successfully. Result After selecting fourty five proposals, we choose twenty proposals of the students who has the criteria of our team. IbK tenant students data is as follow : Table.2 Data of students IbK Program in Untag Surabaya NO 1. 2. 3. 4.

REG 221208033 231202982 221216006 221208038

HP 085233000809 083830430257 083849642779 087755366638

BUSINESS Yubee leather slippers Ladies Shoes Digital Printing t.shirt Jasuke corn milk cheese

221208194 461003238 221107970 221107864 231002929 211207471

NAME Siti Nurfajriah Mohammad Yasin Septian Kriswinanto Hongki Andi Puspino Linda Amalia Fosi naufal Farisi Aisah Anggun Nur Aisyah Safitri Yasinta

5. 6. 7. 8. 9. 10.

083857232756 085784443433 085745044399 085646529247 085645140089 085730792657

510804239 221208142 511204588 22117960 221208085 231203042 211107284 231203001

C Sabilal Pussung Ratna Mega Ayu Yuliana Dedy Surahman Nurul Karunia Sari Mandasari Dwi Jayanthi Syarief Nur Siti Latifah

081329969193 081357069076 0856319144 085731879200 083851715718 087863501879 085853637379 085648515489

Jilbab and accesories snack store Fashions and Jeans store Moslem clothes Fit O’ Flanel Bogem mangrove liquid ,jenang snacks Brilliant English Course Beautiful collection “Endul” crackers Handycraft training Top Siomay snacks Kebab mini snacks Si”Cemplux” cookies Jamoo Muliasari

11. 12. 13. 14. 15. 16. 17. 18.

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19. 20.

221007808 221208042

Lingga Rohmatin

08563592165 081703400201

Pecel brown sauce Chicken collon crackers

From the target of entrepreneur students every year which are guided in IbK , we wish the IbK team can get minimally five students becoming entrepreneurs and in the next 2 or 3 years we can recruit more in the second year and the third year.

No 1 2 3

Table 3 Qualification data of IbK team. Name Education Field Dra.Erwin Dyah Astawinetu,MM S-2 Finance Management Dra.Yulyar Kartika Wijayanti, MM S-2 Marketing Management Ir. Rini Rahayu Sihwati. MP.MM S-2 Food Technology

The IbK team has related in this IbK program because 2 lecturers from economic faculty are also entrepreneurship lecturers in economic faculty Untag Surabaya who are also practitioners in some business fields such as mini cafe, dress painting , handycraft souvenir and so on. While 1 lecturer from food technology also the entrepreneuer lecturer of FISIP The Faculty of Social and Politics. The Organization Structure of The Team. THE ORGANIZATION STRUCTURE LEADER

LEADER MEMBER

STD.CRE.PROG PROGPROGYTY

STUDENT NEW BUSINESS

STUDENT NEW BUSINESS

STUDENT NEW BUSINESS

Source : Organisation Structure of The Implementation Team.

DISCUSSIONS The results in IbK implementation have already done in training of business plan making , making blog for on line marketing , conventional marketing, packaging and PIRT, and business motivation and also make a broad understanding of the students. For broading the view about entrepreneurship program there will be a business visit to learn about business from the successfull businessman such as bakpao telo , Kasri towel, and small business bag Tanggul Angin. Because of the lateness of fund coming from the government so that the visiting to kampung kidz Batu Malang had to be changed to the other places

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previously. All students have done the business proposal and presented the proposal to the guiding lecturers and IbK team. Students can make blog to do marketing online and training . This time the students has done the business with the fund given from IbK program, every month they are guided by the guiding lecturers and reported to the IbK team. Finally the IbK team can know that 10 students have done well in their business and can be new independent business students. The criteria of passing is according to the financial report to their guiding lecturers. Financial report shows the progress of the increasing sales which show the good report and the willingness to return back the fund to the IbK team. The table below shows the IbK implementation until November 2013. In the implementation program IbK 2013 has also problems. Besides the problems of fund lateness from the government from DIKTI, also there are other problems such as the students already in the VII semester . The student is Tias Handayani (221116008) from accounting department who has done scriptie and has difficulties to run the business , while the business in the handycraft is hard to do because the human resources are her family including her parents. Because of writing scriptie so Tias has to stop doing her business for a while and concentrate to do the scriptie. Fro changing Tias we recruit the student from Psychology for changing her, Yuliana (511204588) which already done business of “Kripik Endul” crackers from fruit and cassava . In this case Tias has also return the fund for capital to the IbK team 2013 and Ibk team gives to Yuliana as a changing tenant. The 10 students who has passed to become independent entreprenurs. Table. 4 Graduated Students list from IbK Program 2013 NO REG NAMES HP Business 1. 221208033 Siti Nurfajriah 085233000809 “Yubee” leather slippers 2. 231202982 Mohammad Yasin 083830430257 Ladies Shoes 3. 221208038 Hongki Andi 087755366638 Jasuke corn milk Puspino cheese 4. 221208194 Linda Amalia 083857232756 Jilbab and Accessories 5. 221107970 Aisah 085745044399 Fashions and Jeans 6. 221208142 Ratna Mega Ayu 081357069076 Beautiful collection 7. 511204588 Yuliana 085331872686 “Endul”crackers 8. 22117960 Dedy Surahman 085731879200 Handycraft and music training 9. 510804239 C Sabilal Pussung 081329969193 Brilliant English Course 10. 2211208042 Rohmatin 081703400201 Chicken Collon crackers

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The 10 students have done business before, so that the fund from IbK and training also guiding from the guiding lecturers , they are willing to become independent entrepreneurs. But we are the IbK team and the guiding lecturers still continue and give time energy for the new students who have passed from IbK to have consultation every time in the working hours. The 10 students have already done the finance report every month that showed their sales report starting from September until November 2013 and they also pay installment 0 percent interest. They should pay installment 10 times in 10 months which will be ended on August 2014. The 10 students have already paid the installment which is required. CONCLUSIONS Making new entrepreneurs from the students are not easy because as guiding lecturers and also IbK team with crowded activities in the university. We have to manage our time and also manage the students especially when the business run well. Especially Jasuke sell (corn milk and cheese ) which is very success in the business. In one day he can sell 12 kg of sweet corn in the plastic glasses. Also the students in the higher year who has to do the scriptie. But because of the spirit of helping the students and also help the government program in decreasing unemployment and also invent the workers field of jobs in our country insya Allah it will run well. The suggestions that we can give are as follow ; The fund from the the government should not come late. This will make us difficult to start doing the program. We are almost give up because the students keep asking to our team all the time . The students ask the fund for starting their businesses. Alhamdulilah because of the university help we can start earlier and run well. The next level in the implementation of IbK year 2014, we are IbK team have graduated 10 students as new entreepreneurs . In the year 2014 we will recruit 10 new students as tenant students changing of IbK program 2013, so that every year there will be 20 new IbK students who are guided and become new entrepreneurs from students . we have scheduled routine meetings with the students who have already joined in the E club IN the Economic Faculty to have good relationship among students of IbK and IbK team and also guiding lecturers . Otomatically the passing students will become new mentors and help continually in IbK team and becomes e club team . The limitations of the program is dealing with the fund to start the business and the management of the students to manage and separate their own money and business money. Eventhough they have the training in business management. Acknowledgement The Facilities Used in IbK Services Unit. Institution Resources : entrepreneurship Laboratory in economic faculty and the Laboratory of Food Technology Untag Surabaya as a supporting units.

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The resources tools which are used in the laboratoty of entrepreneurship in Untag are entreprenuership laboratory of Economic Faculty Untag Surabaya and laboratorium Food Technology laboratory . Telephone, HP , Fax, and internet from the faculty and university , printer, laptop and others for the activities. The marketing access of the students to the students family and campuss, also the public surroundings. The Business relation of the lecturers in the university who are doing their own business. The Technology uses machines and tools which are available in Economic Faculty and Food Technology in the University. Business program outside campuss which colaborate with IbK team, they are some catering businesses , mini cafes and practitioners. The program got fund from DIKTI , the amount is 80% and 20% from Untag Surabaya. From 100% fund 50% was shared to the students as capital for starting business or continuing business.

REFERENCES Ciputra.2009. Ciputra Quantum Leap “Entrepreneur Mengubah Masa Depan bangsa dan Masa Depan Anda”. Cetakan Ke 6.PT Gramedia Jakarta. Carnegie.Dale.1995.Bagaimana Mencari Kawan dan Mempengaruhi Orang Lain. Binarupa Aksara. Carnegie Dale.1996. Pemimpin Dalam Diri Anda. Mitra Utama. Jakarta. Eka Putra.Julianto.2008. Becoming An Entrepreneur Is Easy. MIC Publishing.Surabaya Eka Putra.Julianto.2007. Anda Ingin Sukses, Selama Tidak Berdosa Lakukan. MIC Publishing.Surabaya Ester.Lidia.2011.Aksesori Kain Flanel.Tiara Aksa.Jakarta. Elshinta.Majalah.3 Agustus 2011. Maxwell John.C. 2010.Team Work 101. MIC Publishing.Surabaya Maxwell John.C. 2009. Self Improvement. MIC Publishing.Surabaya Purwoko.Agus.2011. Sampah Jadi Emas. BIP.Kelompok Gramedia. Sartika.Yopi.2008. Trampil Dengan Jamur. Regina .Bogor Tribunnews.com.Jakarta, 14 September 2013 Vedaswari.2002.Kresasi Wadah Fungsional Dari Kertas. Tiara Aksa.Bogor

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www.business dictionary.com Yulianto Eka Putra, 2007. Anda Ingin Sukses? Selama Tidak Berdosa Lakukan. MIC Publishing.

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THE INFLUENCE OF PUBLISHER’S PROMOTION THROUGH SOCIAL MEDIA TOWARDS THE CONSUMER AWARENESS OF FANTASY NOVELS: A CASE STUDY OF THER MELIAN NOVELS Shienny Megawati Sutanto1, Denny Bernardus2 Universitas Ciputra INDONESIA E-mail: [email protected] ABSTRACT The continuous annual growth of the book industry has resulted in the increase of competition among publishers. Inevitably, publishers are required to execute a range of marketing efforts to increase consumer awareness. Over the last decade, media landscape has undergone significant changes. Various new media forms, especially social media such as Facebook or Twitter, emerge and are utilized as promotional tools. The purpose of this study is to determine whether the publisher’s effort to promote books through social media has influenced consumer awareness, or in this case, the consumers of Ther Melian’s fantasy novels. The theoretical basis of this research is the promotion and consumer awareness theory. The results of the linear regression analysis indicate that social media promotion influences consumer awareness. Additionally, social media enables consumers to connect with publishers and authors.

Keywords: Promotion, Social Media, Book, Publishing, Consumer Awareness INTRODUCTION Book industry in Indonesia continues to grow every year. Datafrom IKAPIindicate that as many as 33.199.557 copies of book were sold in Indonesia during 2013. Novel or fictional books was one of the most widely sold books, along with religion book and textbooks. As the results, a good number Indonesian publisher choose to publish novels compare to other types of books.

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Table 1. Book sales in Indonesia 2013 Children book Fictional Books Religion Textbooks Reference and Dictionary Others

23% 13% 13% 13% 9% 31%

Source: Ikatan Penerbit Indonesia (IKAPI) Based on Table 1it safe to assume that the book industry in Indonesia is growing quite rapidly, especially novels intended for teen to young adult female reader. This phenomenon has caused a fierce competition between publishers; in the face of competition publishers must carry out various promotional efforts to build consumer awareness. Awareness is the first stage from a series of decision making steps that consumer undergo before they decide to purchase a product. (Kotler and Armstrong, 2012: 156) Awareness happens when the consumer is aware of the existence of a product. The success of a published book are highly depends with whether or not the consumer aware about the books existence. Schiffman and Kanuk in Consumer Behavior (2009: 10) stated that in order for goods or services to be accepted by consumer, the company must able to convince the consumer that the goods or service they are offering could meet the consumer’s need and desire. In this digital age, publisher’s promotions effort continues to evolve as technology advances. Now it’s not enough only to promote through conventional media such as radio, newspaper, and magazines. Publishers have begun to utilize social media for promotional purposes. Through social media, not only that the publishers can promote their products, but they can also communicate and interact with their consumers, this is referred as social media promotion. In this digital era, it is very important for companies to have representations in multiple social media in order to have better understanding of their consumer perceptions toward the company. (Stokes, 2011: 166) Currently there are numerous social media are available in the World Wide Web, which can be seen in Table 2. Table 2. Varioussocial media

Source: Barker, Barker, Bohman,and Neher 2013

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Out of all the social media, Facebook andTwitterdeserve special attention because these two are the most widely used social media in Indonesia. There are more than 38 million Facebook user in Indonesia (second compared to USA as the country with the most Facebook user worldwide) and 6.2 million Twitter user in Indonesia, third compared to Japan and India as the country with the most Twitter user in Asia. (Wulandari, 2013) Given that simultaneous promotion through social media has become a part of Indonesian publisher’s promotion strategy to build their consumer awareness, this subject deserves closer attention for further research and development. However in this study, the scope will be limited only to two most popular social media in Indonesia (Facebook and Twitter) by doing case studies on the Fantasy novel “Ther Melian” which was published by Elex Media Komputindo. Ther Melian is a fantasy novel published by Elex Media Komputindo. Novel or fictional books are divided into several genres for distribution and sales purposes. Some fictional categories that are common in the bookstores include: detective, horror, fantasy, and romance. (Gill, 2013) The fantasy genre can be defined as fictional works that contains magic or things that cannot be explained using real world laws and logics. (Burcher et al., 2009) THEORETICAL DEVELOPMENT Publisher Book publishers are companies that have resources and funds to develop, produce, promote, and sell books to consumers. (Germano, 2008: 7)Book publisher are not printing company, printing company gains their revenue by producing books based on orders, while book publishers are capital owner who invested on a writer’s creative work, they finance the cost of printing, distribution, promotion, and author’s royalty. (Sutanto, 2010: 142) Therefore each manuscript submitted to a book publisher will undergo rigorous selection process before it can be published. Book publishers have editors, marketing, and management team to decide whether or not a manuscript is appropriate for publication. Editor assesses the contents of the manuscript, while marketing assess its marketability, and based on their consideration the management team will give the final decision. (Sutanto, 2010: 149).So it can be concluded that publishers have begin the process of marketing, even before a book is published. Promotion by Publisher The intense competition amongst publishers has caused shorter product life spanat the bookstore. (Squires, 2009: 26) The book industry is driven by market behavior, as a result publicity and promotion efforts are absolutely necessary if a published book wants to reach a wider market. By performing publicity and promotion, publisher has actually carried out the marketing mix. The variables of the marketing mix consists of 4P or Product, Price, Promotion, Place (Distribution).(Kotler and Armstrong, 2012: 48-53) Book Three

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In order for goods or services to be received by consumers, a company should be able to form a perception that the goods or service they offer would meet the consumers desire and needs. (Schiffman and Kanuk, 2009: 10) One-Way to shape consumer’s perception is marketing activity. Marketing is social processes in which an institution create, communicate, and offers a product or service that has value for their consumers, client,partner, or society at large. (Kotler and Keller, 2012: 14) Consumer Awareness Before consumer decided to purchase a product they involve in a decision making process, especially before they decide to buy a book. Book is a high-risk purchase product, so consumer would hesitate to purchase before they acquire comprehensive information about the book’s content. (Lis and Berz, 2011). Usually, consumers tend to choose a product that they considered to meet their needs or desires. (Peter and Olson, 2008) There are five stages of adoption (also known as traditional sales funnel) that every consumer goes through before they decided to purchase a product. (Kotler and Armstrong, 2012: 156) That is: 1. Awareness:consumer knows about a product but didn't have enough information about the product. 2. Interest:consumer are searching for more information about the product and considering purchasing a product. 3. Evaluation:consumers are considering whether to try the product or not. 4. Trial: consumer decided to try to product before making their decisions. 5. Adoption:consumer decided to purchase the product. Awarenessis consumer first step before deciding whether to purchase a product or not. (Kotler, 2012: 182) External influence in the form of information about products has major influence towards consumer’s awareness, and the most important external influence is promotion or direct attempt to persuade consumer to purchase. (Schiffman and Kanuk, 2009: 449) To know which media are appropriate to build consumer awareness, there are few indicators that book publishers could use to measure their consumer awareness. (Kotler, 2012: 420) That is to ask consumer whether they understand the product being promoted, if they know where to get that product, whether they are interested to purchase the product after receiving the information, whetherthey are looking for more information about the product, and if they talk about the product with others. Promotion through social media Digital marketing is a promotion attempt, done in an environment interconnected by Internet. (Stokes, 2011: 21)Many Indonesian publishers realized the power of Internet and begin utilizing it for promotion purposes.Publishers’decision to promote their product through Internet islargely based on their market segment. Elex Media,the publishers of Ther Melian, whom mostly publish fiction book Book Three

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chooses internet as their promotion media based on a consideration that the vast majority of their consumer are adolescents and young adults, i.e.: those born between the mid-1990-s to 2000 or known as the Z-generation or digital natives who spends much time on the internet. (Grail Research Analysis, 2011). Unfortunately more and more publishers are promoting on the Internet, that led to the overcrowding of digital promotion. This has caused digital promotion becoming less effective. (Kerpen, 2011: 39-40)The success of digital marketing lies in the marketer’s ability to design a consumer based approach. (Stokes, 2011: 468). Along with the consumer weariness with digital marketing, many publishers began to switch to marketing 2.0 strategies. Marketing 2.0 is a consumer based promotion, where the focus is not to convince consumers to buy a certain products or to sell as much products as possible, but to satisfy and treat consumers as individuals who have unique thoughts and feelings. (Kotler et al., 2010) Before marketing 2.0, internet like any other conventional media, are one directional publications media, where consumers are passive receivers of information’s broadcasted by marketers without given any chance to respond or interact. With the advance of technology, many consumers based social media such as Facebook, Twitter, Blog, Forum, andYou Tubeemerges.Social media has become a new channel for marketers and companies to communicate and interact with their consumers. Social Media is aninternet based social apps that was build based on the ideology and technology of web 2.0. (Kaplan & Andreas, 2010) Social media, has changed the way people uses the internet, infact since November 2011 its been recorded that 25% of the time people uses internet to visit Facebook. Nowadays it’s very rare for people to use the Internetto look for information, they prefer to use Facebook or Twitter andother social media to look for information amongst their social networks. (Kerpen, 2011: 52). Through social mediapublisherscouldcommunicate with their consumers, something that they cannot do with conventional media. (Thackeray, et al, 2008) Other than that, social media has enabled publisher to interact with their consumers personally. (Kotler and Armstrong, 2012: 18)Social media also becomes new opportunity for publishers to engage their consumers in discussion, whether with the publisher’s representative (B to C and C to B), or with other consumers who share the same interest and passion (C to C). This has lead to the forming of a community.Community is a valuable asset for publisher, since it can be empowered to collaborate in many ways, ranging from product development to promotion. Mangold and Faulds (2009) found in their research that social media has three roles in promotions, which are:

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Table 3. Social media roles in promotion Social media asinformation Social media are influential toward consumers, from source building awareness, information source, opinion forming, determining attitude towarda product, purchasing decision, and after sale evaluation. (Mangold and Faulds, 2009) Social media Publishers, who communicate with their consumers in ascommunication media. social media during a productdevelopment or promotion process, are more likely to build their consumers awareness compared with publishers who do not. (Lis and Berz, 2011) Social media as word-of- Social media adds more strength to word-of-mouth mouth promotion media promotions. Consumers who are satisfied with a product will share their positive experience with their social networks. (Kerpen, 2011: 8)

Source: Mangold and Faulds 2009 Promotionthroughsocial media: Facebook Facebook promotions begin by establishing a community who understandand needs the product or service offered by marketers. As a social media intended for sharing thought and communicate, Facebook is the right place to start a community.Starting from content sharing communities eventually formed and then evolved into an organic social entitythat kept growing. (Evans, 2010: 32) As the largest social media in the world,Facebook offers unique way for company to interact with their community. By providing an option for company to create their own ‘business pages’ or commonly known as ’fan-page’. Fan-page acts as a company’s representative in Facebook, through fan-page consumers could get the latest information about a product and interact directly with the company (B to C and C to B) consumers could also interact with other consumers (C to C). Another advantage of a fan-page that when a consumer decide to ‘Like’ a company’s fanpage almost everyone in the consumer’s social network would know about it. Though it may look simple, but it isone form of word-of-mouth promotion. (Kerpen, 2011: 5). Promotion through social media: Twitter Functionally, Twitter is not much different from Facebook, where a company could create a Twitter profile that later will become the company’s representative in Twitter. But since Twitterhas simpler system, public could easily access almost every conversation happening in Twitter. Every Informationavailable in Twitter are easily shared, so it’s much more convenient for company to promote and collaborate with their consumers. (Kerpen, 2011: 235).Many companies have used Twitter to connect with their consumers. (Evans, 2010: 9) Twitter’s main content is‘tweets’ or real conversations posted by the users. Information and news in Twitter circulate faster if compared to other social media. (Evan, 2010: 148)

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METHODOLOGY The framework of this research is to study the effects of social media promotion toward consumer awareness. The social media promotion variable is adopted form Mangold and Faulds (2009) research. While consumer awarenessvariableare using definition from Kotler and Armstrong (2012: 156).

Figure 1. Research frameworks

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The framework above can be explained into a hypothetical model as follows:

Publishers promotion through social media Facebook (X1)

Fantasy Novel Ther Melian Consumer’s Awareness (Y)

Publishers promotion through social media Twitter (X2)

Figure 2. Research Hypothesis Model

Based on the hypothesis models, the proposed hypothesis is as follows:  

Publisher’s promotion through social media: Facebook (X1) has significant effect toward consumer’s awareness of Ther Melianfantasy novel(Y). Publisher’s promotion through social media: Twitter (X2) has significant effect toward consumer’s awareness Ther Melianfantasy novel (Y).

Sample Demographics This research approach is quantitative research methods, by collecting numerical data that would later be processed and analyzed to obtain information.(Martono, 2011: 20) The research will be conducted ina limited population, this is because the researcher wants to select a sample based on some specific characterization, namely: Ther Melian’s social media followers (both on Facebook and Twitter) who are still using both social media until May 2014. After initial selection 269 populations is selected. Theamounts of sample used in this research were based on a calculations using Slovin’s formula. (Sevilla et. al., 2007:182) Based on the calculation using the formula, the numbers of sample to be taken in this research is 73. Questionnaire In this research, researcher will sendquestionnaire to the research subject.Questionnaire is a data collection method that is done by providing a list of statements to the research subjects. How the researchsubject respond toward the statements are then used to measure research variables by using Likert scale, where research subject will expressed their level of agreement on statements about

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their attitudes regarding the effect of social media promotion toward their awareness of Ther Melian fantasy novel. (Kuncoro, 2013: 185) Results F test are conducted to test whether the independent variables significantly influenced dependent variables simultaneously. Results of the test performed using SPSS software are as follows: Table 4. F test results Model 1

Sum of Squares

Regression Residual Total

5.108 3.139 8.247

df 2 70 72

Mean Square 2.554 .045

F

Sig

56.952

.000b

a. Dependent Variable: Awareness b. Predictors: (Constant) Facebook as information source, Facebook as communication media Facebook as word-of-mouth promotion media, Twitter as information source, Twitter as communication media Twitter as word-of-mouth promotion media

Table 4 shows that the significance of the F value is 0.0 (smaller than α= 0.05). Therefore it can be concluded that all the independent variables (promotion throughsocial media FacebookandTwitter) have significanteffect toward dependentvariable (consumer awareness) simultaneously. Table 5. t test result

Table 5 shows that the significance of the t value for both variables is smaller than(α= 0.05). Therefore it can be concluded that all the independent variables (promotion throughsocial media FacebookandTwitter) have significant effect toward dependent variable (consumer awareness) partially. Table 6. Multiple Linier RegressionAnalysis R 1

.787a

R Square .619

Adjusted R Square .608

Std. Error of the Estimate .21176

DurbinWatson 1.886

a. Dependent Variable: Awareness b. Predictors: (Constant) Facebook as information source, Facebook as communication media Facebook as word-of-mouth promotion media, Twitter as information source, Twitter as communication media Twitter as word-of-mouth promotion media

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Table 6 shows that the Coefficient Determination or R2value is 0,619. This means that 61,9% of consumer’s awarenessis affected by independent variables.This finding is consistent with Mangold and Faulds (2009) research that stated social media is only one element of an integrated and coordinated promotional activities. Table 7. Regression Coefficient Model

Unstandardized Coefficients

B Std. Error Constant 1.068 .202 Promotionthroughsocial media Facebook .262 .118 (X1) Promotionthroughsocial media Twitter .410 .129 (X2) a. Dependent Variable: Consumer Awareness

Standardized Coefficients Beta .335 .477

Table 7 indicates that the regression coefficient value for independent variable promotion through social media Facebook (X1) is 0.262. Thepositivevalue on the regression coefficient represents a unidirectional relationship between promotions through social media Facebook with Ther Melian consumers’ awareness. If social media promotion through Facebook increases one unit, then the consumer awareness will increase by 0.262. Meanwhile,the regression coefficient value for independent variable promotion through social media Twitter (X2) is 0.410. The positive value on the regression coefficient represents the unidirectional relationship between promotions through social media Twitter with Ther Melian consumers’ awareness. If social media promotion through Twitter increases one unit, then the consumer awareness will increase by 0.410. From the interpretation of the results it can be concluded that if the publisher’s promotion though social media (Facebook and Twitter) are done with more intense then consumer awareness would increase as well. Descriptive Analysis Promotionthrough social media Facebook The descriptive analysis results shows that the indicator with the highest mean value of 3.45 is X1.2, whichshows research subject tendency to use Facebook as communication media with book publishers and authors. This is consistent with Kerpen’s finding that Facebook as social media that offers fan page facility is a suitable media for companies to interact and connect with their consumers. (Kerpen, 2011: 5). Promotionthrough social media Twitter The descriptive analysis results shows that the indicator with the highest mean value of 3.45 is X2.1, which shows research subject tendency to purchase a novel after they receive information about the novel from Twitter. This finding is consistent with Kerpen who stated that Twitter has a simpler system; therefore

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almost every information’s available in Twitter are accessible by public. (Kerpen, 2011: 235). Ther Melian Fantasy Novel Consumer Awareness The descriptive analysis result shows that the indicator with the highest mean value of 3.30 is Y1, which shows that the research subject understands about the product being promoted (Ther Melian fantasy novel). This is consistent with Schiffman and Kanuk (2009: 449) who stated that promotion is a company’s effort to build consumer’s awareness by providing as many information about their product/ service. Conclusion 1. Both independent variable, promotion through social media Facebook (X1) and promotion through social media Twitter (X2) could explain consumer awareness in this research as much as 61.9% while the rest was influenced by other variables. 2. Both independent variables, significantly affect dependent variable (consumer awareness). However the independent variable promotion through social media Twitter (X2) has more influence toward the dependent variable if compared to promotion through social media Facebook (X1). This can be seen in Table 7 where the Standardized Coefficient value for X2promotion throughsocial media Twitteris 0.477 bigger than X1promotion throughsocial media Facebook(0.335). 3. Descriptive analysis results show that the research subjects tend to use Facebook as communication media than as information source. Descriptive analysis also shows that research subjects prefer to use Twitter as information source and tend not to use Twitter as communication media. This can be observed from the highest and lowest mean value of each variable indicator Suggestion 1. In the creative industries, particularly in the book publishing sub-sector, social media promotion through Facebook and Twitter have significant effect toward consumer’s awareness. Therefore writer and entrepreneurs who whish to enter the book publishing industry need to pay more attention and keep themselves updated with social media so they can utilize it as promotional media in addition to the other conventional media. 2. This research shows that social media promotion only explain 61.9% of consumer awareness. This is consistent with Mangold and Faulds (2009) research that stated social media is only an element of promotional activities. So aside from the social media, book publishers must carry out other promotional activities. 3. While promoting in social media, publishers need to know the advantages and limitation of every social media in order to maximize the social media Book Three

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potential and reach their consumers. Publishers also need to master the ability to interact with consumers and creating interesting content in order to encourage their consumers to collaborate in a social media conversation. This topic is certainly interesting to be used as future research material, so publishers and writer are able to formulate better strategies for their social media promotion. 4. Throughsocial media, consumercould connect directly and get to know book publishers and writers from the novels they read, this couldn’t be achieved if publishers only use conventional mass media to promote.So publishers and writers should be able to recognize the potential of social media, not only as a media to build consumer’s awareness, but also as means to build relationship and consumers loyalty. In the book industry that grows more and more competitive, social media is as an alternative to promote with relatively affordable cost. REFERENCES Barker, Barker, Bormann. 2012 “Neher Social Media Marketing A Strategic Approach 1st edition.” ,Kentucky: Cengage Learning. Germano, W. 2008 “Getting It Published, 2nd Edition: A Guide for Scholars and Anyone Else Serious about Serious Books.”, Chicago: University of Chicago Press. Evans, Dave. 2010 “Social media marketing : the next generation of business engagement.” Indianapolis: Wiley Publishing, Inc. Grail Research Analysis 2011 “Consumers of Tomorrow: Insights and Observations About Generation Z.”, New York: Grail Research—a division of Integreon. Kaplan, A. M., Haenlein, M. 2010 “Users of the world, unite! The challenges and opportunities of Social Media.”, Business Horizons, Vol. 53, Issue: 1, pp. 59-68. Kuncoro, M. 2013 “MetodeRisetuntukBisnis&EkonomiEdisi PenerbitErlangga.

4.”,

Jakarta.

Kerpen, D. 2011 “Likeable social media”. New York: McGaw-Hill. Kotler, P &Kartajaya, H. &Setiawan, I. 2010 "From Products To Customers To The Human Spirit; Marketing 3.0.", John Wiley & Sons Inc Lis, B. & Berz, J. 2011 “Using Social Media for Branding in Publishing”, Online Journal of Communication and Media Technologies, Vol.1, Issue: 4, 2011 Mangold, W.G., Faulds, D.J., 2009 “Social media: The new hybrid element of the promotion mix.” , Business Horizons Vol. 52, 2009, pp. 357—365.

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Martono, N. 2011 “MetodePenelitianKuantitatif.” Jakarta: PT. RajagrafindoPersada. R B Gill, 2013 “The Uses of Genre and the Classification of Speculative Fiction.”, Mosaic: a Journal for the Interdisciplinary Study of Literature, Vol. 46, Iss. 2, pg. 71 Schiffman, L. & Kanuk, L. 2009 “Consumer Behavior (10th Edition).”, New York: Prentice Hall. Sevilla, Consuelo G. et. al 2007 “Research Methods.”, Quezon City: Rex Printing Company. Stokes, R. 2011 “eMarketing: The essential guide to digital marketing”. Cape Town: Quirk eMarketing (Pty) Ltd. Squires, C. 2009 “Marketing Literature. The Making of Contemporary Writing in Britain.” Basingstoke: Palgrave Macmillian Sutanto, L. 2010, “Kiatjitumenulisdanmenerbitkanbuku”. Jakarta: PenerbitErlangga Thackeray, R., Neiger, B.I., Hanson, C.L. and McKenzie, J.F. 2008, “Enhancing promotional strategies within social marketing programs: use of Web 2.0 social media”, Health Promotion Practice, Vol. 9 No. 4, 2008, pp. 338-43. Wulandari, Theresia D. 2013 “The Need of Internet Literacy in An Ongoing Process of Economic Stability”, JurnalIlmuKomunikasi, Vol .10, Nomor 1, 2013, hal. 49-62

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THE EFFECTS OF WORK RELATED ATTITUDES ON TURNOVER INTENTION AMONG EMPLOYEES IN UD LIBRA Melinda Gunawan1, J.E. Sutanto2 Universitas Ciputra SURABAYA, INDONESIA E-mail: [email protected]

ABSTRACT The objective of this study is to determine the effects of various workrelated attitudes on turnover intention among the employees in UD Libra, Surabaya, Indonesia. This study applied census method or total sampling method in which all members of the population are taken as respondents or samples. As many as 34 employees working at UD Libra at the time the study was conducted were involved in this study. The data collected from the questionnaires were analyzed using multiple regression analysis in SPSS 20.0. The statistical results obtained in this study showed that job satisfaction, organizational commitment, and job involvement have a significant simultaneous effect on employee turnover intention. Partially, job satisfaction has a negative and significant effect on employee turnover intention at UD Libra, whereas organizational commitment and job involvement has no significant partial effect on employee turnover intention.

Keywords: Work Related Attitudes, Turnover Intention, Job Satisfaction, Organizational commitment, Job Involvement.

INTRODUCTION Human resource is viewed as an important company asset because it is adynamic resourceand always needed in the production of both goods and services (Ridlo, 2012). Moreover, human resource has a major role in determining the development of a company or organization (Mangkunegara, 2013).During the period of 2013 to 2014, there was a decline in productivity of human resources at UD Libra, a family company engaged in the field of food and beverage. The ratio between the average production and average working hour in 2013 was 0.17 and decreased to 0.16 in 2014. According to Perez (2008), one of the major causes of the decreasing of human resource productivity is employee turnover. Turnover is defined as the number of employees where employees enter and quit in a company Book Three

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in a given period (Mondy, 2012). Employee turnover often becomes a major concern in the preparation of the organization's strategy. Turnover, especially voluntary turnover would cost the company as in the form of employeereplacement costs or expenses for advertising for a new employee search. In addition to the loss in the form of fee, the company can also get other losses, such as pressure or a heavier burden on other employees (Perez, 2008).Based on employee turnover data from UD Libra, it can be interpreted that UD Libra has a number of employees that is gradually increased from year to year, but it is also followed by an increase in employee turnover. As for the increase in company turnover, the problems that need to be considered are not only the employee turnover, but also some other underlying factors. However, before deciding to quit from a company, an employee will go through a phase or stage where he has an intention to exit from the company and trying to find a new job. This stage is called turnover intention (Ridlo, 2012). Turnover intention is shown to be associated with actual turnover (Mobley in Perez, 2008). Company data shows that there are a variety of reasons why employees left the company. Reasons such as fighting with another worker, underpaid,and scolded by employerresemble employee dissatisfaction to their work or the work environment as described by Kreitner and Kinicky (2014).The problems of lacking commitment to the company are also apparent in some of the reason for the discharge of employees. Employee commitment to the company is the degree to which an employee is in favor of the company and strived faithfully in it (Ardana et al.,2009). Some employees stated that they had a secondary job, or have received an offer from another company. Those reasons illustrate that they are less committed to the company, which can also be supported by the acquisition of other job opportunities so that the employee intends to come out and work somewhere else.Besides the issue of job satisfaction and organizational commitment, some of the reasons are associated with job involvement. Employees who are less tied or involved to their jobs, means having jobs or other activities that causes them to not consider their work as the main thing in their life, or can be called not work-oriented (Widow, 2013). As can be interpreted from the reasons of employee who quit from the company, number of reasons such as should take care of children/ grandchildren, got a second job/ want to continue the sideline, indicates that they are less focused on their work, and tend to do other things outside work.Those three aspects aboveare part of the work related attitudes thatareassociated with turnover intention. This is supported by research conducted by Shukla et al (2013). This study summarized some previous studies on the causes of turnover intention. The result explained that the work-related attitudes including job satisfaction, organizational commitment, and job involvement significantly associated with turnover intention. Thus, the purpose of this study is to determine the effects of various work related attitudes on turnover intention among the employees of UD Libra.The various

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work related attitudes analyzed in this study are job satisfaction, organizational commitment, and job involvement. Job Satisfaction (X1) H1

Organizational Commitment (X2)

H2

Turnover Intention (Y)

H3

Job Involvement (X3) Figure 1.Conceptual Model Source: Shukla, et al.(2013)

Refering to Figure 1, the conceptual model were adapted and modified from Shukla et al.(2013). The independent variables in this research are job satisfaction, organizational commitment, and job involvment, whereas the dependent variable is turnover intention. CONTEXT AND REVIEW OF LITERATURE Turnover Intention Turnover intention is defined as a person's desire to get out of a job and / or switch to another job within a certain period , and is a precursor to the actual turnover (Perez, 2008; Aydogdu and Asikgil, 2011) The researchers use turnover intention as a variable to measure the discharge of employees rather than using the turnover itself, because of some reasons. First, there has been evidence that employees generally have conscious desire to leave their job before they actually quit. This theory is supported by research on attitudes and behavior, such as by Fishbein and Ajzen. Secondly, it is more convenient and practical to conduct cross-sectional study by conducting the interview in a certain moment rather than doing a longitudinal study in which researchers have to observe and follow the events or changes in employees who left the company in a given period (Mahdi et al., 2012) Work Related Attitudes According to Robbins and Judge (2013), there are three main working attitudes which become the focus of of research in the field of organizational behavior. All

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three main work related attitudes are job satisfaction, organizational commitment, and job involvement. Job Satisfaction Job satisfaction is an affective or emotional response toward various facets of job (Kreitner and Kinicki, 2014). Researchers at Cornell University developed the Job Descriptive Index (JDI) to assess a person's satisfaction about work in several dimensions as follows: employment, salary, promotion, coworkers, and supervision. Meanwhile, researchers at the University of Minnesota concluded that there are 20 different underlying dimensions of job satisfaction. Those dimensions are activity, independence, variety, social status, supervision-human relation, supervision-technical, moral value, security, authority, social service, ability utilization, company policies and practices, compensation, advancement, responsibility, creativity, working condition, co-worker, recognition, accomplishment. Job satisfaction had a role in determining a person survive or leave a job . If someone was not satisfied with his work , it is certain that he want to leave the job. Conversely, if a person gets satisfaction from the job then that person will be reluctant to leave his job. Several studies (Aydogdu and Asikgil, 2011; Medina, 2012; Mahdi et al., 2012; Shukla et al., 2013; Subawa and Utama, 2013) have shown that there is a negative relationship between job satisfaction and turnover intention or desire to get out. It can be interpreted that the higher the job satisfaction, the lower a person's desire to leave the job. Organizational Commitment Organizational commitment is an attempt of an employee to define and involve himself in the organization and there is no desire to left (Sari, 2013). According to Kreitner and Kinicki (2014), organizational commitment reflects the degree to which a person recognizes an organization and tied to the goals. Meyer and Allen in Kreitner and Kinicki (2014) divides organizational commitment into three components: affective commitment, normative commitment, and continuance commitment. Affective Commitment reflects commitment based on emotional ties the employee develops with the organization primarily via positive work experiences. Normative Commitment reflects commitment based on perceived obligation towards the organization, for example rooted in the norms of reciprocity. Continuance Commitment reflects commitment based on the perceived costs, both economic and social, of leaving the organization. Employees who have committed orhave strong ties to the company would prefer to stay in the company (Aydogdu and Asikgil, 2011). Research conducted by Shukla, et al. (2013) clarifed previous studies stating that organizational commitment significantly and negatively associated with turnover intention.

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Similar results were also obtained from studies conducted by Aydogdu and Asikgil (2011). Job Involvement Kreitner and Kinicki (2014) defines job involvement as the degree to which a person is cognitively engaged with, tied in, and related to his job. Employee who has a high job involvement will consider his job as a big part of his identity. This will make a strong bound with his work and decrease the desire to quit. This relation has been proven in empirical research conducted by Shukla, et al. (2013), which stated that job involvement had a significant and negative relationship with turnover intention. This means that the higher the level of involvement of one's job, the lower the turnover intention or intention to leave the company.

METHOD Population and Sample The population of this research is all the employees who are still actively working on UD Libra based on company data per July 2014. This study used a census sampling manner, where all members of the population is taken as respondents or samples. Such sampling technique can also be refered as total sampling. Thus, as many as 34 employees working at UD Libra at the time study was conducted were involved in this study. Hypotheses

 H1 : Job satisfaction has a significant and negative effect on employee turnover intention at UD Libra  H2 : Organizational commitment has a significant and negative effect on employee turnover intention at UD Libra  H3 : Involvement of work has a significant and negative effect on employee turnover intention at UD Libra  H4 : Job satisfaction, organizational commitment, and job involvement have a simultaneous effect on employee turnover intention at UD Libra

Measures This research adapted and modified commonly used questionnaires for acessing the data.The questionnaire consisted of 4 independent sections and Likert Scale is used for measuring and acessing the data from the questionnaire. Measurement of Job Satisfaction: The Minnesota Job Satisfaction Questionnaire (MSQ) was adapted and modified to be used in this reasearch. In accordance with the conditions of the employees at UD Libra, only 6 indicators of job satisfaction used in this study, which are co-worker, compensation, supervision-human relation, variety, working condition, and ability utilization.

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Measurement of Organizational Commitment: The Organizational Commitment Questionnaire by Meyer and Allen was adapted and modified to be used in this reasearch. The questionnaire consists of 18 statements that include 3 indicators of organizational commitment, which are affective commitment, normative commitment, and continuance commitment. Measurement of Job Involvement : The Job Involvement Questionnaire by Kanungo was adapted and modified to be used in this reasearch. The questionnaire consists of 10 statements that include 2 indicators of job involvement, which are centrality of work in daily life and affective identification. Measurement of Turnover Intention: Rosin and Korabik’s Turnover Intention Questionnaire was adapted and modified to be used in this reasearch. The questionnaire consists of 3 statements that include 3 indicators of turnover intention. Before use, validity and reliability tests have been undergoneon the research instrument. Validity and reliability tests were conducted by distributing instruments (questionnaires) to the employees of a company which is not the research object. In this case, the researcher distributedthe instrumentsto 30 employees (production and administration) ofa similar company located in Surabaya. The data collected were analyzed using SPSS 20.0 for analyzing the validity and the reliability. FINDINGS The data was processed using Statistical Package for Social Science (SPSS) version 20.0 for Mac. In order to investigate the hypotheses of the study, multiple regression analysis are performed and the results are given below. Table 1.Regression Analysis Model

Unstandardized Coefficients B

1

Standardized Coefficients

Std. Error

(Constant)

7.630

.646

Job Satisfaction

-.920

.284

Organizational Commitment

-.020

t

Sig.

Beta 11.808

.000

-.569

-3.236

.003

.340

-.012

-.057

.955

Job Involvement -.545 .370 a. Dependent Variable: Turnover Intention

-.306

-1.473

.151

H1 argues that job satisfaction has a significant and negative effect on employee turnover intention at UD Libra. As seen in Table 1, the result shows that job

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satisfaction has a significant and negative effecton employee turnover intention (t = -3,236;Sig. = 0,003; andα=0,05). Therefore, H1 is accepted. H2 argues that organizational commitment has a significant and negative effect on employee turnover intention at UD Libra. As seen in Table 1, the result shows that organizational commitment has no significant effect on employee turnover intention (t= -0,057; Sig.= 0,955; and α=0,05). Therefore, H2 is rejected H3 argues that Job involvement has a significant and negative effect on employee turnover intention at UD Libra. As seen in Table 1, the result shows that job involvement has no significant effect on employee turnover intention (t= 1,473;Sig.= 0,151; and α=0,05). Therefore, H3 is rejected. Based on the results of the questionnaire data processing using SPSS 20.0, F test results (ANOVA) showed in Table 1 below. Table 2.ANOVA ANOVAa Model

1

Sum of Squares

df

Mean Square

Regression

29.172

3

9.724

Residual

11.664

30

.389

Total

40.837

33

F

Sig.

25.010

.000b

H4 argues that job satisfaction, organizational commitment, and job involvement have a significant simultaneous effect on employee turnover intention at UD Libra. Based on Table 2, can be seen that the F value is 25,010 with Sig.= 0.000 ( F table (2.316), so Ho is rejected and Ha accepted, meaning that the linear model of service quality variables simultaneously has a significant influence on consumer satisfaction variables. Therefore it can be concluded that based on the statistical theory and the results of research based on the F test, service quality has a significant impact on customer satisfaction.

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Result of t Test Coefficientsa Unstandardized Coefficients Model 1

B

Std. Error

(Constant)

2.612

.738

X1 X2 X3 X4 X5

-.002 .256 -.019 -.158 .318

.001 .126 .102 .093 .116

Standardized Coefficients Beta

t

-.189 .204 -.018 -.160 .276

Sig. 3.540

.001

-2.028 2.025 -.190 -1.695 2.749

.045 .046 .850 .093 .007

a. Dependent Variable: Y

1. Variable Physical Evidence (Tangible), t (2,028)> t table (90; 0.025) is 1.987, so Ho is rejected, Ha is accepted. Tangible variable partially has significant effect on customer satisfaction. 2. Variable Reliability, t (2,025)> t table (90; 0.025) is 1.987, so Ho is rejected, Ha is accepted. Variable reliability partially has significant effect on customer satisfaction. 3. Variable responsiveness, t (0.190)