Governance of Village Enterprise
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1251 Int. J Sup. Chain. Mgt Vol. 9, No. 3, June 2020 Community Development through Supply Chain Strategy: Governance of Village Enterprise Yohanes Yakobus Werang Kean1, Intiyas Utami2, Aprina Nugrahesty Sulistyo Hapsari3 1Universitas Flores, Nusa Tenggara Timur, Indonesia 2,3Universitas Kristen Satya Wacana Salatiga, Indonesia [email protected] [email protected] Abstract— Managing the supply chain has become a through the inclusion of separated village assets of way of improving competitiveness by reducing which this entity shall manage assets, services, and uncertainty and improving service. This paper will seek others businesses for the maximum welfare of villagers to highlight the importance of managing the Supply [1, 2]. The village enterprise is established with the aim Chain and logistics in Indonesia rural markets to to encourage and accommodate all beneficial activities delivers goods and services in a cost effective manner. for increasing communities’ income through jointly The village enterprise has become the Indonesian managed businesses to improve the welfare of village government's program to develop the economy of villages through the supply chain. The management of communities [3]. Data that was taken from the Ministry village enterprise in traditional villages encounters two of Villages, Disadvantaged Regions, and situations. On the one hand, the village enterprise is Transmigration of the Republic of Indonesia noted that required to have good governance, while on the other as of December 2018, 61 percent or 45,549 villages have hand it deals with the conditions of supply chain had village enterprises [4]. strategy. The mutual influence between supply chain The Village Ministerial Regulation states that the and communities offers opportunities to integrate establishment of village enterprise is intended to sustainability initiatives into the chain. So the objective accommodate all economic activities and public of this research is to explore the understanding of services managed by the village or through inter-village stakeholders about the supply chain of enterprise at the village of Wologai. This research also explores the cooperation. Ponggok Village in Klaten Regency and supply chain that supports the governance of village Panggung Harjo Village in Sleman, Yogyakarta are enterprises. Village of Wologai as a traditional village, examples of successful tourism village management it has high supply chain strategy, for example, there is a through a tourism village enterprise which succeeded in traditional leader i.e. “musalaki” who is a respected bringing the villages out of their poor conditions. figure in the village community. Supply chain strategy Tourism villages are being targeted by the Ministry of that has the potential to hamper governance Tourism, which has the support from the Ministry of implementation, among others, is in terms of meeting Villages for their development by establishing village the demands of indigenous peoples who want enterprise enterprises. The Ministry of Tourism's target in 2019 is activities to prioritize culture ceremonies rather than discipline in preparing good governance. 20 million foreign tourists and 275 million domestic tourists. Among the tourism products that have been Keywords— Governance, Enterprise, Supply chain strategy, community development relied upon by the Ministry of Tourism, 60% of them are cultural tourism, 35% are natural tourism and 5% are 1. Introduction tourism of man-made products. Although East Nusa Tenggara is the second poorest One form of the implementations made by the province in Indonesia, it has a lot of tourism wealth both Indonesian government in terms of supporting natural and cultural tourisms which is supported by sustainable development is through the forming of supply chain strategy. Flores Island as one of the largest village enterprises. Regulation of the Minister of islands in East Nusa Tenggara, it has an advantage on Villages, Development of Disadvantaged Regions, supply chain strategy as indicated by the presence of the and Transmigration Number 4 of 2015 defines that village head who is usually also as the custom leader the village enterprise is a business entity that the (mosalaki). Any governmental programs will gain capital is wholly or largely owned by the village support from the local communities when mosalaki is involved. For example, the annual tourism program – ______________________________________________________________ International Journal of Supply Chain Management the Pati ka Du'a Bapu Ata Mata Festival – in the Lake IJSCM, ISSN: 2050-7399 (Online), 2051-3771 (Print) Kelimutu National Park Hall (TNK) area, it is a Copyright © ExcelingTech Pub, UK (http://excelingtech.co.uk/) traditional ritual to provide food offerings to the 1252 Int. J Sup. Chain. Mgt Vol. 9, No. 3, June 2020 ancestors of the Lio tribe on the slope of Lake Indonesian government has established and Kelimutu. The impact of tourism activities in BTNK implemented several strategies in the management and Kelimutu is the increase of tourists for the buffering utilization of the economic and sector resources of this villages, including the traditional village of Central country to support the goals of sustainable development. Wologai. One of forms in the governmental empowerment to Wologai Village is a 800 years old traditional village support sustainable development nationally is through which is one of the buffer villages in Kelimutu village enterprises by creating empowerment and National Park. This village has formed a village special training for all village communities involved as enterprise, but its implementation for tourism is not managers of village enterprises. yet optimal. The village enterprise is not optimized The implementation of regional government due to the lack of good governance so that it exists development through village enterprises must be only as a symbol of the implementation of the village improved through aspects of relation among regional government program. governments and the proper implementation of village Several studies [5-8] indicate that there was a lack in enterprise governance. In general, the implementation the optimization of village enterprises because the of governance for the directors who are responsible in human resources of village enterprise managers did the enterprise has similarities with the directors of not optimally perform the implementation of village village enterprises as "the Operational Executives" who enterprise especially in management and have full responsibility for losses or bankruptcy of accountability. This is supported by the statement of village enterprises [12]. Government Regulation the Minister of Villages and Disadvantaged Regions, Number 54 of 2017 concerning Regionally Owned Eko Putro Sandjojo, stating that so far the successful Enterprises related to governance principles consists of village enterprises are the ones that have good 1) Transparency 2) Accountability 3) Responsibility 4) human resources, while village enterprises that have Independence and 5) Fairness [13]. not been qualified, are lagging behind [9]. So, more The village enterprise is one of the government specific research is needed to answer the problem programs to improve the income of village communities based on the findings of previous researches related through sustainable development programs, for the to the mechanism of accountability of managers in universal economic growth and equity [14]. The village managing the village enterprises. enterprise can be used as an alternative village resource This research aims to explore stakeholders’ for regional development to provide additional income understanding of village enterprise governance and to the village finances. The Indonesian government explore the supply chain strategy’s in developing the issues a regional government regulation which contains village enterprise governance. The results of this government’s policies and programs to support the research should be able to increase knowledge about realization of communities’ welfare by increasing and the governance of village enterprise by involving empowering the communities which is reflected through supply chain strategy’s and stakeholders. This regional potential and diversity. research is useful for villages for the right policies in Village Regulation defines that the village enterprise is the management of the village enterprises. one of forms of village economy development, human resources empowerment of rural communities and 2. Literature Review assistance for the rural communities through grants Governance of Village Enterprise contained in the Regional Revenue and Expenditure Governance is one of interests of an organization to Budget (Republic of Indonesia, 2014). The village improve the oversight of accountability carried out enterprises are established through the initiation of by the unit to suppress deviant behaviors in village communities which adheres to 6 main principles, sustainable development that is in line with namely, cooperative, participatory, transparency, applicable laws and norms and integrated as a whole emancipatory, accountability and sustainability with in the organization [10]. The efforts of the member-based mechanism in village communities and Indonesian government in supporting sustainable business development according to the village's development are realized through improving the potential independently [15]. This relates to standard of living of rural