The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
Products, Prices, Locations, and Promotions and Their Effects on Auction Purchase Decisions
Hendra Sugestriawan, S.E. STIE Mandala Jember, Jalan Sumatera No.120, Jember, East Java, Indonesia
ARTICLE INFO ABSTRAC T Article history: This study aims to determine the effect of marketing mix factors, namely varia- Received ble product, prices, place, and promotions simultaneously and partially influ- Revised ence the decisions in purchasing by auction. Population is all auction buyers Accepted who participate in and register in the auction at KPKNL Jember. The number of samples studied was 50 people. The sampling technique that used in the JEL Classification: study was using the Nonprobability Sampling technique with the Quota Sam- pling technique. The method of data analysis uses multiple linear regression analysis. Based on the results of the analysis, it can be concluded that the mar- Key words: keting mix variables simultaneously have a significant effect on purchasing Marketing Mix, Product, Price, Place, decisions by auction. While partially the price and location variables signifi- Promotion, Auction Decision cantly influence the purchase decision by auction.
DOI: 10.6084/m9.figshare.9810686 ABSTRAK
Penelitian ini bertujuan untuk mengetahui pengaruh faktor bauran pemasaran yaitu variabel barang, harga, lokasi, dan promosi secara simultan dan parsial mempengaruhi keputusan dalam pembelian secara lelang. Populasi adalah se- luruh pembeli lelang yang mengikuti dan mendaftar dalam pelaksanaan lelang di wilayah kerja KPKNL Jember. Jumlah sampel yang diteliti sebanyak 50 orang. Teknik pengambilan sampel yang digunakan dalam penelitian adalah menggunakan teknik Nonprobability Sampling dengan teknik Quota Sampling. Metode analisis data menggunakan analisis regresi linier berganda. Berdasarkan hasil analisis dapat disimpulkan bahwa variabel bauran pemasaran (4P) secara simultan berpengaruh signifikan terhadap keputusan pembelian secara lelang. Sedangkan secara parsial variabel harga dan lokasi berpengaruh secara signifikan terhadap keputusan pembelian secara lelang.
1. INTRODUCTION mine the effect of marketing mix factors in the Currently we often hear sales transactions form of products, prices, place, and promotions through auctions. Sales with an auction mecha- simultaneously and partially affect the purchase nism are actually nothing new in Indonesia, the decisions in auction. auction was officially entered into legislation since 1908. KPKNL Jember is one of the Opera- 2. THEORETICAL FRAMEWORK AND HY- tions Offices under the auspices of the DJKN in POTHESES the East Java region which also carries out the Sumarmi and Soeprihanto (2010: 274) ex- duties and functions of carrying out auction ser- plain, Marketing Mix is a combination of varia- vices. Since 2014 until 2018, the target of the bles or activities that are the core of the market- main achievement of the Jember KPKNL auction ing system, namely products, prices, promotions, has never been calcified and the number of auc- and place. In other words, the Marketing Mix is a tion frequencies is smaller than the TAP auction. collection of variables that can be used by com- Based on the above, the author really wants to panies to influence consumer responses. So the do research related to "Products, Prices, Place, elements of the marketing mix consist of prod- and Promotions and Their Effects on Auction ucts, prices, promotions, and place. Purchase Decisions (Case Study at the KPKNL Many previous studies have been carried Jember)". The purpose of this study is to deter- out by researchers using the same variables as
* Corresponding author, email address: [email protected]
1 this study. Novitasari, Kantun, Umar, in 2014, Sugiyono (2015: 90). The sampling method used conducted their research with the title "The In- in the study was using the Nonprobability Sam- fluence of Marketing Mix on Decisions on the pling technique with the Quota Sampling tech- Purchase of Type 36 Simple Houses in Taman nique. The method of data analysis uses multiple Gading Jember Housing Through Bank Muama- linear regression analysis. This study uses a type lat KPR Facility" where the results showed that of descriptive research. the marketing mix had a significant influence on The variables to be analyzed in this study decisions the purchase of type 36 simple houses are the independent variables namely products is 79.8%, while the remaining 20.2% is influenced (X1), price (X2), place (X3), promotion (X4) and the by other independent variables which are not dependent variable is the purchase decision by examined, namely physical evidence and income auction (Y). The method of data collection in this level. While the research from Algrina Agnes study in the form of questionnaires, interviews, Ulus (2013), with the title "Marketing Mix Influ- observations (observations), documentation, and ence on Daihatsu Car Purchase Decisions at PT literature. The analytical tool used in this study Astra Internasional Manado" with the results of is in the form of multiple linear regression using simultaneous product, price, place, and promo- the SPSS 24 program. tion significantly influence purchasing decisions at PT. Astra Manado, and partially products, 4. DATA ANALYSIS AND DISCUSSION prices, places and promotions also have a signifi- Based on the results of the study the re- cant effect on purchasing decisions. spondents' characteristics dominated male as The conceptual framework in this study is as much as 78%. Based on age as much as 32% is follows: dominated by respondents aged 31-40 years. Based on work dominated by civil serv- Product (X1) ants/military/police as much as 34%. Based on the type of object auction in the form of land Price (X2) Auction Purchase and/or building dominating as much as 68%. Decisions (Y) 4.1. Instruments Data Test Place (X3) 4.1.1. Validity Test
Promotion (X4) Validity test is done by correlating between the questions in the total score (Sanusi, 2014: 77). The validity test used to find the correlation value is the Pearson Product Moment correlation for- Information: mula. The value of r obtained is compared with Relationship of Simultaneous : the value of r table with free degrees (n-2). If the r Relationship of Partial : value of the calculation results is greater than the r In this study, X1 variables are products, X2 table value then it means significant and it can be namely price, X3 namely place, X4 which is concluded that the question item is valid. promotion, while variable Y is a purchase Based on the results of the overall statement decision by auction. To find out the purchasing in each variable, the value of rcount > rtable, it can be decision by auction, there is no standard that has stated that the whole variable is declared valid. been used as a guideline, because purchasing 4.1.2. Reliability Test decisions are relative and the expectations of Reliability is a measuring device that shows each buyer of the auction object are different. But the consistency of measurement results (Sanusi, empirically, purchasing decisions by auction can 2014: 80). Calculation of reliability is carried out be understood using 4P in the marketing mix, on valid questions where the method used to namely, product, price, place, and promotion. calculate the reliability of the instrument is by measuring the halves. The total score of the two 3. RESEARCH METHOD halves is correlated with product moment The research was conducted at KPKNL correlation. Furthermore, with the product Jember which was held from February to March moment correlation coefficient generated, it is 2019. The population was all auction buyers who entered into the Spearmen-Brown formula. The had participated in the auction in the Jember correlation coefficient results from the calculation KPKNL working area. The number of samples are then compared with the r value in the table. studied was 50 people obtained from the number Where if the correlation coefficient is calculated of sample members at least 10 times the number than the r value in the table, then the reliability of variables studied According to Roscoe in test is significant in other words the research
2
instrument is reliable. 4.3. Analysis of Multiple Linear Regression Based on the results of the overall study of To find out how much influence the variables, the correlation coefficient calculated> independent variables namely product (X1), price rtable, then the reliability test of each variable is (X2), place (X3), and promotion (X4) on the significant in other words a reliable research dependent variable is the purchase decision instrument. through auction (Y). 4.2. Classical Assumption Test Analysis Based on the results of the study obtained the 4.2.1. Normality Test results of multiple linear equations are as follows: The normality test conducted by researchers Y = -0,011+0,042X1+0,388X2+0,376X3+0,212X4 + e using graph analysis can be done by looking at a From the regression equation above can be normal plot / scatterplot graph. Where if the data explained as follows: spreads around the diagonal line and follows the a) Constants of -0,011 means that if there is no direction of the diagonal line or the histogram item variable products (X1), price (X2), place graph shows a normal distribution pattern, then (X3), and promotion (X4), the decision on the regression model meets the assumption of purchase by auction (Y) will decrease. normality (Ghozali, 2016; 156). b) The independent variable has a positive value, Based on the results of the study with a this means that each of the independent normal plot / scatterplot graph that the point variables even though in the absence of other spreads around the diagonal line and follows the independent variables (4P) still has an direction of the diagonal line on the histogram influence on the dependent variable, namely graph, this indicates that the pattern is normally the purchase decision by auction (Y). distributed. So it can be concluded that based on 4.4. Coefficient of Determination (R2) the P-P chart plot, the data is normally The coefficient of determination R2 is used to distributed. measure how far the ability of the model in 4.2.2. Multicolinierity Test explaining the variation of the dependent A good regression model should not have a variable. The coefficient of determination is correlation between the independent variables. To between zero and one. The closer R2 is to number test multicollinearity is done by looking at the one, the more suitable the regression line is to Variance Inflation Factor (VIF) value of each predict Y (Firdaus, 2019: 123) variable from the analysis results. If the tolerance Based on the Determination Coefficient Test value is greater than 0.10 and VIF is smaller or Result (R2), the Adjusted R Square value of 0.707 less than 10, it can be concluded that the data is is obtained where the R2 value close to one thing free from symptoms of multicollinearity (Ghozali, means that the product (X1), price (X2), place (X3), 2016; 104). and promotion (X4) influence the purchase Based on the results of the study that the decision by auction. (Y) of 70.7% and the tolerance value for each independent variable is remaining 29.3% is explained by other variables. greater than 0.10 and the VIF value is less than 10, 4.5. Hipotesis Test it can be concluded that the data is free from the 4.5.1. Simultaneous Significance Test symptoms of multicollinearity. The F statistic test is used to find out whether 4.2.3. Heteroscedastycity Test all the independent variables included in the Heterokedacity test is used to determine model affect together (simultaneously) the whether or not there is a classic assumption of dependent variable (Ghozali, 2016; 96). In this test heteroscedasticity deviation, namely the existence using a significance level (α) of 5% or 0.05, the of variance of residual inequality for all testing criteria for the F statistical test are if the observations in the regression model (Firdaus, value of Fcount>Ftable value, then all independent 2019: 224). The test in this study uses the graph variables (4P) simultaneously affect the plot method between the predictive value of the dependent variable. dependent variable, ZPRED and the residual Based on the results of the study, it was SRESID. Heteroscedasticity does not occur if there found that the Fcount value was 30,523. based on is no clear pattern, and the points spread above table F for the value of Ftable with a significance and below the number 0 (zero) on the Y axis. level (α) of 5% is 2.56. Because Fcount>Ftable, it can Based on the results of the study with a plot / be concluded that all marketing mix independent scatterplot graph, showing no clear pattern, and variables (4P) simultaneously have a significant the points spread above and below the number 0 effect on the dependent variable (purchase (zero) on the Y axis, it can be concluded that decision). heteroscedasticity does not occur. 3 4.5.2. Individual Parameter Significance Test because the selling value of product is below the The purpose of the partial test (t test) is to market value. find out how far the influence of one independent variable individually (partial) in explaining the 5. CONCLUSION, IMPLICATION, SUG- variation of the dependent variable (Ghozali, GESTION, AND LIMITATIONS 2016; 97). With a significance level (α) of 5% or a 5.1. Conclusion confidence level of 95%, the test criteria for t test The conclusions of this study indicate that are if the significance level is ≤ 5% or tcount<-ttable or simultaneous purchasing decisions by auction tcount>ttable, then an independent variable are influenced by variables of products, price, partially/each influences the dependent variable. place, and promotion. While partially only the Based on the results of calculations obtained price and location variables that have a that the independent variables in the form of significant effect on purchasing decisions by products and promotions produce sig values of auction. 0.703 and 0.245 and tcount
4
Arikunto, S. 2002. Metodologi Penelitian Suatu Peraturan Menteri Keuangan Republik Indonesia Pendekatan Proposal. Jakarta: PT. Rineka Nomor 106/PMK.06/2013 Tentang Cipta Perubahan Atas Peraturan Menteri Keuangan Nomor 93/PMK.06/2010 Creswell, John W. 2010. Research Design : Tentang Petunjuk Pelaksanaan lelang. Pendekatan Kualitatif, Kuantitatif, dan Mixed. Yogyakarta: Edisi Ketiga. Pustaka P, Canno Joseph, D Perreault William, dan E Pelajar. Jerome McCarthy. 2008. Pemasaran Dasar Dengan Pendekatan Manajerial Global. Ferdinand, Augusty. 2014. Metode Penelitian Jakarta: Salemba Empat. Manajemen. Edisi 5. Universitas Diponegoro. Rutoto, Sabar. 2007. Pengantar Metedologi Penelitian. FKIP: Universitas Muria Kudus Firdaus, Muhammad. 2019. Ekonometrika Suatu Pendekatan Aplikatif. Edisi Ketiga. Jakarta: Sanusi, Anwar. 2014. Metodologi Penelitian Bumi Aksara. Bisnis. Cetakan Keempat. Jakarta: Salemba Empat. Ghozali, Imam. 2016. Aplikasi Analisis Multivariate Dengan Program IBM SPSS 23. Sugiyono. 2015. Metode Penelitian Kuantitatif, Semarang: Badan Penerbit Universitas Kualitatif, dan R&D. Bandung: Cetakan ke- Diponegoro. 22. Alfabeta.
Kotler, Philip. dan Gary Amstrong. 2001. Dasar- Sumarni, Murti dan John Soeprihanto. 2010. Dasar Pemasaran. Edisi Bahasa Indonesia Pengantar Bisnis (Dasar-dasar Ekonomi Jilid 1 dan 2, Alih Bahasa Damos Sihombing. Perusahaan). Edisi ke 5. Yogyakarta: Liberty. Jakarta: PT Gelora Aksara Pratama. Surat Edaran Direktur Jenderal Kekayaan Kotler, Philip. 2005. Manajemen Pemasaran Negara Nomor : SE-10/KN/2017 Tentang Indonesia. Edisi Bahasa Indonesia. Buku Penyebarluasan Informasi Lelang Pada Kedua. Salemba. KPKNL Melalui Laman DJKN.
Kotler, Philip. 2009. Manajemen Pemasaran. Swastha, Basu, DH, Irawan. 2005. Manajemen Terjemahan Penerbit Erlangga, Pemasaran Modern. Cetakan ke dua belas. Northwestern. Yogyakarta: Liberty Offset.
Kotler, P., & Armstrong G. 2012. Priciples of Swastha, Basu. 2009. Manajemen Penjualan. Marketing. New Jersey:Pearson Education Yogyakarta: BPFE Limited. Tashakkori, Abbas dan Charles Teddlie. 2010. Laksana, Fajar. 2008. Manajemen pemasaran Mixed Methodology. Yogyakarta: Cetakan I. pendekatan praktis. Yogyakarta: Graha Pustaka Pelajar. Ilmu. Tjiptono, Fandy. 2008. Strategi Pemasaran. Edisi Novitasari, Dian. Sri Kantun. dan Umar. 2014. ke 3. Yogyakarta: Andi Pengaruh Bauran Pemasaran Terhadap Keputusan Pembelian Rumah Sederhana Ulus, Algrina Agnes. 2013. Bauran Pemasaran Tipe 36 Pada Perumahan Taman Gading Pengaruhnya Terhadap Keputusan Jember Melalui Fasilitas KPR Bank. Artikel Pembelian Mobil Daihatsu Pada PT Astra Ilmiah Mahasiswa. viewed 2 Oktober Internasional Manado. viewed 2 Oktober 2018
5 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
Strategic Role of Service Quality to Donor Satisfaction
Yuliatin Azizah STIE Mandala Jember, Jl. Sumatra No. 120 Jember 68136, Est Java, Indonesia
A R T I C L E I N F O A B S T R A C T
Artikel History: This research was conducted with the aim of analyzing simultaneous Received and partial quality of services related to tangible (X1), reliability (X2), Revised responsiveness (X3), assurance (X4), emphaty (X5) to donor Accepted satisfaction (case study in Blood Donor Unit PMI of Jember Regency). JEL CLASSIFICATION The type of research used is descriptive research using quantitative. Descriptive analysis techniques and using multiple linear regression with SPSS 20 calculation. The sample technique used is nonprobability sampling with purposive sampling technique. Key Word : Consideration of sampling is: the sample is a voluntary donor who has Service quality, blood donor, 5 donors, gets a card for 5 donors or has a donor charter. Sample of research 60 respondents. The method of data analysis used the F and customer, satisfaction T test statistics. Calculated F Test is Significant for related simultaneous quality of service to donor satisfaction. Partially the X1 (Tangible) variable is not significant, Variable X2 (reliability) DOI: significance, X3 variable (responsiveness) has no significant effect, X4 10.6084/m9.figshare.9810812 variable (assurance) has a significant effect, the variable X5 (empathy) has a significant to donar satisfaction . Implication this research is blood donor unit must improve the quality of service in all sector to donor satisfaction increases.
Keyword : Service quality, blood donor, customer, satisfaction
A B S T R A K
Penelitian ini dilakukan dengan tujuan untuk menganalisis pengaruh simultan dan partial kualitas pelayanan yang diukur dengan tangible (X1), reliability (X2), responsiveness (X3), assurance (X4), emphaty (X5) terhadap kepuasan pendonor studi kasus di Unit Donor Darah PMI Kabupaten Jember. Jenis penelitian yang digunakan adalah penelitian deskriptif dengan pendekatan kuantitatif. Teknik analisa deskriptif dan menggunakan regresi linear berganda dengan penghitungan SPSS 20. Teknik sampel yang digunakan nonprobability sampling dengan teknik sampling purposive. Pertimbangan pengambilan sample adalah : sampel adalah pendonor sukarela yang telah 5 kali donor, mendapatkan kartu untuk 5 kali donor atau piagam donor. Jumlah sampel yang digunakan sebanyak 60 responden. Metode analisa data dengan koefisien determinasi, Uji statistik uji F dan T. Hasil penelitian adalah kualitas pelayanan memiliki pengaruh secara simultan
* Corresponding author, email address: [email protected]
terhadap kepuasan pendonor. Secara partial variabel X1 (Tangible) berpengaruh tidak signifikan terhadap kepuasan pendonor, variabel X2 (reliability) berpengaruh secara significant, variabel X3 (responsiveness) berpengaruh tidak signifikan, variabel X4 (assurance) berpengaruh signifikan, dan variabel X5 (empathy) berpengaruh secara significant terhadap kepuasan pendonor. Implikasi dari penelitian ini adalah unit donor darah harus meningkatkan kualitas pelayanan disemua sektor agar kepuasan pendonor dapat meningkat untuk mencapai ketercukupan kebutuhan darah.
Kata Kunci : Kualitas pelayanan, donor darah, pelanggan, kepuasan
1. INTRODUCTION always increasing. Service quality must begin Good service quality in a company with the needs of service users and end in the will create satisfaction for consumers. If perception of service users (Algifari, 2016: 6). consumers feel satisfied they will do the This must be fulfilled not only for the needs reprocessing process and recommended to of service users but also for the security others to do the same process (Hardono, requirements and for donors (Permenkes 91, 2014). Customer satisfaction cannot be 2015). Satisfaction of donors is important in instant, it is necessary to collaborate with addition to socializing well can also make a parties related to donor satisfaction (Rizan healthy community. The benefits of a donor and Andika, 2011). Good service quality in an are healthy because it can improve heart effort to satisfy customers must also be health, increase red blood cells, support owned by a business entity engaged in the weight loss. Because by removing 450 ml of blood service sector to achieve the goal of blood there will be a freezing of body calories blood sufficiency for the community. Blood by 650 kilograms of calories, thus reducing service business is an effort that guarantees the risk of harm. Reducing the risk of diseases safe, high quality and adequate amounts of caused by blood viscosity such as cholesterol, blood services (Permenkes 91, 2015). gout, and diabetes. And the concentrated Fulfilling the target of blood sufficiency for benefits of health are for the satisfaction of the community requires hard work to make it others. (www.donordarahsehat.com). happen. Community needs for blood every A preliminary survey was conducted year always increase, this can be seen from on donors to find out the reason for their the tabulation of blood distribution in UDD blood donation. From interviews conducted PMI Jember Regency which always increases with 20 donors who have donated more than significantly in each year. once, answers were received that 13 people answered because they wanted to donate BLOOD DONOR blood for humanity to help those in need, 5 DISTRIBUTION people answered because they wanted to be 26425 29417 33529 34846 healthy, and the remaining 2 people were 35720 accustomed to donors. A noble desire to help humans must be balanced with good service 2013 2014 2015 2016 2017 to donors. From the pre survey above 100% Data source : Blood Donor Unit Jember Red Cross have not answered about the quality of the Blood Donor Unit service to donors. The need From the graph we can see that the for donors in response to ideal blood needs community needs in Jember Regency are according to Sidikah and Nur (5: 2013)
7 available donors at least 4% of the population simultaneously influencing donor of a region is very difficult to achieve. If satisfaction. donors do not have sufficient numbers to make patients unable to get the blood they Partially the influence of service quality on need, they will have to look for donors from donor satisfaction can be described as family, friends or spread their information follows: through social media such as whatsapp, Service Quality of Tangible facebook, and others. Often also the urgent The tangible quality waiter hypothesis will need for patients at midnight for patients affect customer satisfaction. This is in who are critically in need of blood from accordance with the results of research by donors. Syahri and Rahmah (2017), Silvia and Kartika The blood donor unit is very (2017), Ali and Ali (2015), Julios and Suhartini dependent on the business cycle running for (2015) Wayan and Ketut (2015), Hardono donors because this unit is a government- (2014), Utama (2012). The quality of physical appointed unit to carry out blood services in evidence in blood services must be in the community. Therefore researchers are accordance with quality blood service interested in conducting research on the standards (PP No. 7 of 2011) by prioritizing effect of service quality on donor satisfaction donor safety and the quality of blood with a case study at the PMI Regency Blood products produced (Minister of Health Donor Unit in Jember Regency. Based on the Regulation 83 of 2014) Qualified and background above, the formulation of the liquidated facilities, equipment and buildings problem in this study is: Is service quality (BPOM 2017). measured by tangible, reliability, Quality of service for physical evidence of responsiveness, assurance, empathy blood services according to Permenkes simultaneously and partially influencing A. Place of Implementation of Blood donor satisfaction (Case Study in the PMI Donation Activities District Blood Donor Unit of Jember Must meet the following conditions: Regency)? With the aim of research: to • Safe for donors and officers. A safe place to analyze the simultaneous and partial guarantee the safety of donors as well as influence of service quality as measured by officers. tangible, reliability, responsiveness, • Extensive enough for activities that meet assurance, empathy towards donor the standards of having ventilation, satisfaction (Case Study in PMI District Blood electricity supply, lighting, arm washing Donor Unit in Jember Regency). facilities, communication networks, areas for blood storage and blood transportation and 2. THEORETICAL FRAMEWORK AND shelter for the donor interview area so that HYPOTHESES the donor's confidentiality is maintained. The effect of service quality measured by B. Equipment tangible, reliability, responsiveness, • Has been qualified and approved for use assurance, and empathy has a significant • Must meet the quality management system influence on service quality, which is for blood supply units consistent with the research of Syahri and • A set of blood collection equipment Rahmah (2017), Silvia and Kartika (2017), including waste facilities is used for one Efendi and Lili (2016), Ali and Ali (2015), donor bed Julios and Suhartini (2015) Wayan and Ketut • Blood weighing devices must be (2015), Hardono (2014), Marismiati and periodically qualified, calibrated and Hadiwijaya (2013), Nur and Dwi (2013), validated and approved for use Utama (2012). From the results of the research C. Implementing staff (Human Resources) the service quality hypothesis can be taken officers who are friendly and competent in measured by tangible, reliability, carrying out activities. Human Resources responsiveness, assurance, and empathy may not be assigned to a job, unless they have
8 been trained and are considered competent Assurance is a dimension that relates to the for the work to be done. company's ability and front-line behavior of staff in instilling trust and confidence in their Reliability customers. Guarantees include the ability, Reliability dimensions are dimensions that politeness, and trustworthiness of the staff, measure the reliability of a company in free from danger, risk, or doubt. This providing services to its customers. There are dimension influences customer satisfaction two aspects to this dimension, first is the can be seen in the research of Syahri and company's ability to provide services as Rahmah (2017), Silvia and Kartika (2017), Ali promised. Second is how far a company is and Ali (2015), Julios and Suhartini (2015) able to provide accurate services or no errors. Wayan and Ketut (2015), Hardono (2014), Hypothesis The quality of servants measured Main (2012), Marismiati and Hadiwijaya by reliability influences donor satisfaction (2013), Supartiningsih (2017). according to the results of research by Syahri The company's ability to convince donors and Rahmah (2017), Silvia and Kartika (2017), about the reputation of PMI guaranteed in Ali and Ali (2015), Julios and Suhartini (2015) Law No. 1 of 2018 concerning Wayan and Ketut (2015), Hardono (2014 ), kepalangmerahan and known to the Utama (2012), Supartiningsih (2017). international community because it has Reliability in implementing blood donation international rules through the Geneva starts from donor selection to post blood convention in 1949. PMI also explains the donor activities. The accuracy process starts benefits for blood donors. PMI's ability to from the beginning, the donor data is then carry out services has been ISO 9001: 2015 followed by the blood collection process to certified and has standard procedures which post donor with data on the history of donor are all regulated through the applicable blood examination results. Minister of Health Regulation. A. Validate the donor serial number for donor documents, sample tubes, and blood bags Emphaty (Concern) B. Data Accuracy and Examination Empathy in donors starts from the donor C. Reliability of puncture in the process of selection process. Health questions about taking blood. how health is today, what are the activities today, whether sleeping enough, is a must do Responsiveness thing. Attention to the donor's physical The dimension of responsiveness is the most condition is also important, such as whether dynamic dimension of service quality. The the donor has a pale face or an unhealthy face, customer's expectations for the speed of the body movements must be healthy, not service will almost certainly change with the weak. The communication process with upward trend over time. In donor services it donors must also be woven when the blood is measured through donor queue justice, collection of donors takes place. A small donor service speed and speed in handling question that also entertains empathy by donor complaints. The service quality asking whether it's dizzy, nauseous when hypothesis measured responsiveness to donating. Based on the research of Syahri and donor satisfaction. The role of this dimension Rahmah (2017), Silvia and Kartika (2017), Ali can be seen in its suitability from the research and Ali (2015), Julios and Suhartini (2015) of Syahri and Rahmah (2017), Silvia and Wayan and Ketut (2015), Hardono (2014), Kartika (2017), Ali and Ali (2015), Julios and Utama (2012), Efendy and Lili ( 2016) Suhartini (2015) Wayan and Ketut (2015), Hardono (2014), Utama (2012 ), Marismiati Concept of Donor Satisfaction and Hadiwijaya (2013). Customer satisfaction is the only center of true profit. A business is called success if you Assurance succeed in getting, maintaining and growing customers (Kotler and Killer,2009) .As
9 explained above measuring satisfaction is to 6) Implementing Competencies see the suitability of service with the Implementing competence is the ability expectations of donors. Measuring donor that must be possessed by the executor satisfaction can be measured by the including knowledge, expertise, skills, formulation of community satisfaction and experience. according to the ministerial regulation on the 7) Implementing Behavior utilization of state apparatus and Implementing behavior is the attitude of bureaucratic reform of the Republic of officers in providing services. Indonesia Number 14 of 2017 concerning Guidelines for the preparation of community 8) Handling Complaints, Suggestions and satisfaction surveys for public service Feedback providers. This regulation aims to measure Complaint handling, suggestions and the level of community satisfaction as users of input are procedures for handling services and improve the quality of public complaints and following up. service delivery. 9) Facilities and infrastructure 1) Requirements Means are anything that can be used as a Requirements are conditions that must be tool in achieving goals and objectives. met in the management of a type of Infrastructure is anything that is the main service, both technical and administrative support for the implementation of a requirements. process (business, development, project). 2) Systems, Mechanisms, and Procedures Facilities used for moving objects Procedure is the procedure of service that (computers, machines) and infrastructure is standardized for the giver and recipient for immovable objects (buildings). of the service. The donor procedure is: • Administration selection: Complete 3. RESEARCH METHODS administrative data Samples and Sampling Techniques • Health selection is simple: a health This research was conducted at the Blood check is carried out by the officer Reduction Unit (UDD) of the Indonesian Red • Taking blood: the process of taking Cross (PMI) in Jember Regency on Jalan Dr. blood Soebandi No. 293 Patrang Jember. Then in the 3) Time of Settlement new office on Jalan Srikoyo 115 Patrang Completion Time is the period of time Jember and also one of the blood donor needed to complete the entire service outlets at the PMI Headquarters in Jember process of each type of service. Regency, Jalan No.57, Sumbersari Jember, 4) Fees / Rates held on November 1, 2018 to February 2019. Fees / Tariffs are fees charged to service The study population was 2500 donors each recipients in managing and / or obtaining month with a sample of 60 people obtained services from the organizer, the amount from the calculation of 10 x the number of of which is determined based on an variables specified (Sekaran, 2006: 252). The agreement between the organizer and the sampling method used is non probability community. Fees are not charged in the sampling with purposive sampling donor process, so fees / tariffs are technique. Consideration of the sampling replaced with awards given to donors. criteria are: Samples are voluntary donors, 5) Product Type of Service Specifications donors who voluntarily donate blood for the Product specifications of the type of safety of patients in need, are donors who service are the results of services have been donors 5 times in the UDD PMI of provided and received in accordance with Jember Regency because donors with this predetermined provisions. This service amount can assess donor services, get a card product is the result of each type of for 5 times the donor or charter for donors 10 service specification. The type of service times and above because the donor has gone received is a blood donor. through the full service stage from
10 registration to getting an award to the donor by looking at the tolerance value and the as a voluntary donor. Methods of collecting opponent's VIF. The commonly used coffoff data by observation, questionnaires, value is a tolerance value below 0.10 or equal interviews, and literature. The analytical tool to the VIF value above 10. The tolerable level used in this study is in the form of multiple of kolineratitas is a tolerance value of 0.10 linear regression using the SPSS 20 program. equal to the level of mulitkolinieritas 0.95 (Ghozali, 2005) 4. DATA ANALYSIS AND DISCUSSION Before the results of the analysis are Multicollinearity Measurement Table carried out, the instrument is tested using validation and reliability tests. The test Model Collin Collinea Information results stated that all instruments used were earity rity valid. This is indicated by correlating the item Statist Statistics scores with the total score (Sugiyono, 2017: ics 125). The value of r obtained is compared Tolera VIF with the r value of the table with free degrees nce (n-2) resulting in the r value of the calculation Tangibl Free ,297 3,367 results greater than the r table value. While e multicollinearity the results of the reliability test were carried Reliabili Free ,429 2,333 out with the help of the SPSS release 20 ty multicollinearity program where the results of the results Respons Free ,376 2,660 obtained were greater than the Alpha iveness multicollinearity reliability> 0.6, then the variable items were Assuran Free ,408 2,452 declared reliable. The higher the coefficient ce multicollinearity the better the measurement instrument Empath Free ,530 1,888 (Sekaran, 42: 2006). y multicollinearity Data Source : processed data SPSS 20 a. Classic assumption test The normality test is used to view From the table above, it can be seen that all normal distribution data with a probability variables are free from multicollinearity. plot on distributed scatter plots. 1) Heterocastricity Test That is a test to find out whether the regression model occurs in the variance from the residual inequality an observation to other observations.
Data Source : processed data SPSS 20
The graph above shows all data are normally distributed, because all data spreads following a diagonal straight line.
Multicollinearity Test Data Source : processed data SPSS 20 The regression model should not have a correlation between independent variables
11
Based on the graph above, it can be seen that 3) Regression coefficient of reliability the distribution of data is irregular and does variable (X2) of 1.655 means that if the not form a specific pattern, and is spread reliability variable (X2) increases while above and below the number 0 on the Y axis, the other independent variables are so it can be concluded that in this regression constant, the donor's satisfaction will model there is no problem of increase. heteroscedasticity. 4) The responsiveness variable coefficient (X3) is 1.142 meaning that if the b. Multiple Linear Regression Analysis responsiveness variable (X3) increases Multiple linear regression analysis was used while the other independent variables are to measure the magnitude of the independent constant, the donor's satisfaction will influence (service quality) on the dependent increase. variable (donor satisfaction). The results of 5) Assurance variable (X4) coefficient of the analysis are as follows: 2.779 means that the assurance variable (X4) increases while the other independent variables are constant, Recapitulation of Results of Multiple Linear donor satisfaction will increase. Regression 6) variable coefficient empathy (X5) of 2.051 Results of Multiple Linear Regression means that if the variable empathy (X5) Analysis and T Test. increases while the other independent Model Unstandardize t Sig. variables are constant, donor satisfaction d Coefficients will increase. B Std. Error c. Coefficient of Termination (R2) Coefficient of Determination (R2) (Constant) 1,963 2,658 ,738 ,463
Tangible ,908 1,044 ,869 ,388 Model R R Adjust Std. Durb Reliability 1,655 ,795 2,081 ,042 Square ed R Error in- 1 Responsiv 1,142 ,834 1,370 ,176 Square of the Wats eness Estima on Assurance 2,779 ,753 3,690 ,001 te Empathy 2,051 ,623 3,290 ,002 1,8480 1 ,894a ,800 ,782 1,957 4 From the table above, it can be seen that the a. Predictors: (Constant), Empathy, Reliability, regression equation formed is: Assurance, Responsiveness, Tangible Y = 1,963 + 0,908 X1 + 1,655X2 + 1,142X3 + b. Dependent Variable: Donor Satisfaction 2,779X4 + 2,051X5 Source: SPSS 20 processed data
1) The constant / intercept of 1.963 From the display of SPSS output the amount mathematically states that if the value of of R2 is 0.782. This means that service quality the independent variable service quality can be explained by five independent is zero then the donor satisfaction of the Y variables, namely tangible, reliability, value is 1.963. In other words, donor responsiveness, assurance, and empathy at satisfaction is positive even without the 78.2%. While the remaining 21.8% (100% - quality of service. 78.2% = 21.8%) are explained by other reasons 2) Tangible variable coefficient (X1) of 0.908 outside the model. means that if the tangible variable (X1) increases while the other independent d. Simultaneous Significance Test (Test variables are constant, the donor's Statistic F) satisfaction will increase.
12
The F test is intended to determine the effect reability, responsiveness, assurance, of joint (simultaneous) independent variables empathy) on the dependent variable (donor (tangible, reability, responsiveness, satisfaction). In this test also uses a level of assurance, empathy) on the dependent significance or a significance level (α) of 5% variable (donor satisfaction). In this test also or 0.05, the test criteria for the F statistic test uses a level of significance or a significance is if the significance value (Sig) is put out of level (α) of 5% or 0.05, the test criteria for the anova if the value of Sig. <0.05, then all F statistic test is if the significance value (Sig) independent variables namely tangible (X1), is put out of anova if the value of Sig. <0.05, realiability (X2), responsiveness (X3), then all independent variables are tangible assurance (X4), empathy (X5) partially (X1), realiability (X2), responsiveness (X3), influence the dependent variable, namely assurance (X4), empathy (X5) simultaneously donor satisfaction (Y), and vice versa . affect the dependent variable, namely donor Individual Test Result Tables (t Test) satisfaction (Y), and also vice versa. Results of Multiple Linear Regression Analysis and T Test. Table: Simultaneous Test Results (Test F) ANOVAa Model Unstandardi Stand t Sig. Model Sum of Df Mea F Sig. zed ardiz Square n Coefficients ed s Squ Coeff are icient 147, s Regression 737,910 5 43,213 ,000b 5 B Std. Beta 1 3,41 Error Residual 184,423 54 5 (Consta 1,963 2,658 ,738 ,463 Total 922,333 59 nt) a. Dependent Variable: donor satisfaction Tangible ,908 1,044 ,097 ,869 ,388 b. Predictors: (Constant), Empathy, Reliabili 2,08 1,655 ,795 ,193 ,042 Reliability, Assurance, Responsiveness, ty 1 Tangible 1 Respons 1,37 1,142 ,834 ,136 ,176 iveness 0 From the results of the ANOVA test or F test Assuran 3,69 in Table 4.29, the calculated F value of 43.213 2,779 ,753 ,352 ,001 is greater than F Table 3.15 and the ce 0 Empath 3,29 significance level of 0.000 is smaller than the 2,051 ,623 ,275 ,002 value of 0.05. Because the significance y 0 probability is less than 0.05 and F count is greater than F table, the regression model can The results of the analysis are based on the be used to predict donor satisfaction (Y) or table. The individual test results obtained are said that the tangible variable (X1), as follows: realiability (X2), responsiveness (X3), 1) Variable X1 (Tangible) produces a value assurance ( X4), empathy (X5) together have of t arithmetic of 0.869 smaller than t table a significant effect on the donor satisfaction of 2,000 and a significance probability of variable (Y). 0.388 more than 0.05, thus it can be concluded that individually X1 (tangible) e. Test of Partial Parameter Significance (Test has no significant effect on variable Y Statistics t) (donor satisfaction). The t test is intended to determine the effect 2) X2 variable (reliability) produces a value partially or individually of independent of t count 2.081 greater than t table which variables of independent variables (tangible, is 2,000 with a significance probability
13
value of 0.042 smaller than 0.05, thus it can be concluded that individually X2 Partial discussion of service quality towards variables (reliability) have a significant donor satisfaction effect on variable Y ( donor satisfaction). 1) The results of the T Test result that 3) X3 variable (responsiveness) produces a individually X1 (tangible) has no value of t count of 1.370 smaller than t significant effect on variable Y (donor table of 2,000 and a significant probability satisfaction). The donor did not see the value of 0.176 is greater than 0.05, thus it place and equipment when donating. can be concluded that individually X3 With experience of more than 5 times variable (responsiveness) has no donors, donors have felt a variety of significant effect on the variable Y (donor donor sites, namely in the PMI District satisfaction). Blood Donor Unit in Jember Regency and 4) X4 variable (assurance) produces a value in several other donors. Satisfaction is felt of t count of 3.690 greater than t table of not because the place where the donor 2,000 and a significance probability value takes place or what equipment is used but of 0.001 smaller than 0.05, thus it can be because the donor has inner satisfaction concluded that individually the X4 of donating blood to humanity and variable (assurance) has a significant Donors want to get healthy benefits after effect on variable Y (donor satisfaction). donating 5) Variable X5 (empathy) produces a t table value of 3.290 greater than the value of t 2) X2 variable (reliability) produces table which is equal to 2,000 with a individually the variable X2 (reliability) significance probability value of 0.002 has a significant effect on variable Y smaller than 0.05, thus it can be concluded (donor satisfaction). Indicator of that individually the variable X5 reliability used is the accuracy of donor (empathy) has a significant effect on data, accuracy of inspection, reliability of variable Y (donor satisfaction). donation in donors which has a significant effect on donor satisfaction. DISCUSSION The effect of illness during the donation The purpose of this study was to determine process remains a frightening thing the effect of service quality on donor because the level of reliability influences satisfaction with a case study at the PMI the donor so that the donor can be Regency Blood Donor Unit in Jember satisfied and do donor activities Regency. From the results of the test repeatedly. calculations can be discussed: 3) X3 variable (responsiveness) has no Simultaneous discussion of service quality significant effect on variable Y (donor on donor satisfaction satisfaction). The responsiveness variable Based on the results of the F Test analysis, it is measured by indicators of justice in was found that service quality had a service according to the queue, speed of significant simultaneous effect on donor donor services, and speed of addressing satisfaction. The discussion from the donor donor complaints. Responsiveness has an interview also explained that donors were insignificant effect because donors who satisfied with the implementation of donors have intended to help humans so that all at the PMI Regency Blood Donor Unit in processes remain underway as long as the Jember Regency. As Mr. Didik Hariadi said, donor process can be carried out and the donors' donation after 60 days is a routine donors can help humans. activity carried out. Donor activities carried 4) X4 variables (assurance) obtain out by donors on a recurring basis after 60 significant results on donor satisfaction days from the donor day as evidence of donor thus it can be concluded that individually satisfaction with the quality of PMI services the X4 variable (assurance) has a in Jember Regency. significant effect on variable Y (donor
14
satisfaction). The Indonesian Red Cross as service quality is partially insignificant, from an international humanitarian institution the results of interviews and observations of has the trust of the Indonesian people so donors having a unique behavior that is that the implementation of donor donating psychologically because they want activities in various places held by the to contribute to humanity and donors have blood donor unit under the auspices of become habits to benefit their health so it is the PMI has a strong influence on the recommended to add variables donor community to donate. behavior is intervening. 5) Variable X5 (empathy) has a significant effect on donor satisfaction. Concern for REFERENCES donors, good communication and empathy for donors have a significant Ali, Syed, Raza., dan Ali Muhammad., 2015, effect. Because the donating process that Service Quality Perception and Customer puts needles into the body and takes more Satisfaction in Islamic Banks of Pakistan: than 5 minutes in the blood collection The Modified SERVQUAL model, Total process is still a separate fear for the quality manajemen,and business community so empathy at the time of excellence donor service has a significant effect on
donors. Algifari, 2016, Mengukur Kualitas Layanan dengan Indeks Kepuasan Metode 5. CONCLUSIONS, IMPLICATIONS, Importance-Performace Analysis (IPA) dan SUGGESTIONS AND LIMITATIONS Model Kano, BPFE, Yogyakarta The conclusion of this study shows that simultaneously service quality measured Badan Pengawasan Obat dan Makanan, by tangible, reliability, responsiveness, Peraturan Kepala Badan Pengawas Obat assurance, and empathy simultaneously Dan Makanan Republik Indonesia Nomor influences the satisfaction of donors. While 10 tahun 2017 Tentang Penerapan partially the service quality has a significant Pedoman Cara Pembuatan Obat Yang Baik effect except service quality measured Di Unit Transfusi Darah Dan Pusat through tangible, and partial responsiveness Plasmaferesis has no significant effect on donor satisfaction. The implication of the results of this Efendi, Januar, Panjaitan., dan Lili, Ai, study is that service quality has an effect on Yuliati., 2016, Pengaruh kualitas donor satisfaction. So that the Blood Donor pelayanan terhadap kepuasan pelanggan Unit as a unit that handles donors must pada JNE Cabang Bandung, Derema always improve the quality of services so that donor satisfaction increases. 2. Furthermore, Jurnal Manajemen Vol. 11 No.2 the quality of service measured through tangible, and responsiveness partially has Ghozali, Imam. 2016, Aplikasi analisis insignificant effect on donor satisfaction so multivariate dengan program IBM SPSS that the Jember Regency PMI through the 23, Semarang: Badan Penerbit Blood Donation Unit must improve service Universitas Diponegoro quality as measured through tangible, and responsiveness. At present it is not influential Hardono, 2014 Pengaruh Kualitas Pelayanan enough because PMI as a monopoly Terhadap Kepuasan Konsumen (Study institution organizes blood donations so that Kasus di Bossanova Billiar Yogyakarta, wherever blood donor activities remain JBMA-Vol.11, No.2 attractive to the public. The results of the research that have been achieved by the authors state that
15
Julios, Alexie, Caesar, dan Suhartini, 2015, Perspektif Dokter Rumah Sakit Hermina Analisis pengaruh kualitas pelayanan Bogor, Jurnal Riset Manajemen dan terhadap kepuasan Konsumen (PT. Gaido Bisnis Vol.2, No.1 Cito Ekakurindo Cabang Surabaya) , Spektrum Industri, Vo. 13 No.1, 1-114 Sugiyono, 2017, Metode Penelitian (Kuantitatif, Kualitatif, dan R & D, Bandung Marismiati dan Hadiwijaya, 2013, Effect of service quality on customer satisfaction Syahri, Ali dan Rahmah, Nur., 2017, Pengaruh service BRT Transmusi Palembang, Jurnal Kualitas Pelayanan (Service Quality) Ekonomi dan Informasi Akuntansi terhadap Kepuasan Pelanggan PT. (Jenius), Vol.3 No.3 September 2013 Sucofindo Batam, Journal of Business Administrasi Vol.1, NO.2 Nur, Restiana, Indahsari., dan Dwi,Agung, Ario Wibowo., 2013, The Influence the Undang-Undang Republik Indonesia Nomor quality service against satisfaction patient 36 Tahun 2009 Tentang Kesehatan inpatient Jamkesmas In Hospital Banyumas, Psycho Idea, Tahun 11, No.2 Wayan, I, Widya, Suryadharma., Ketut, I, Nurcahya, Pengaruh kualitas pelayanan Peraturan Menteri Kesehatan Republik pada kepuasan pelanggan hotel bintang Indonesia Nomor 91 tahun 2015 pesona di Denpasar Timur, E-Junal Tentang Standar pelayanan Transfusi Manajemen Unud, Vol.4, No.4 Darah www. donordarahsehat.com, 18 Agustus Peraturan Menteri Pendayagunaan Aparatur 2018 Negara Dan Reformasi Birokrasi Republik Indonesia Nomor 14 Tahun Kotler, Philip., dan Keller, Keven, Lane., 2009, 2017 Tentang Pedoman penyusunan Manajemen Pemasaran Edisi 13 Jilid I, survei kepuasan masyarakat Unit Erlangga, Jakarta Penyelenggara Pelayanan Publik
Supartiningsih, Solichah., 2017, Kualitas Peraturan Pemerintah Republik Indonesia Pelayanan dan Kepuasan Pasien Rumah Nomor 7 tahun 2011 Tentang Sakit: Kasus Pada Pasien Rawat Jalan, Pelayanan darah
Rizan dan Andika, 2011, Pengaruh kualitas produk dan kualitas pelayanan terhadap kepuasan pelanggan (Survei pelanggan Suzuki, Dealer Fatmawati, Jakarta Selatan) Jurnal Riset Manajemen Sains Indonesia (JRSMI), 2
Sakaran, Uma., 2006, Research methods for Business (Metodologi Penelitian untuk Bisnis) Edisi 4, Salemba Empat
Silvia, Baby dan Kartika, Lindarwati., 2017, Pengaruh Kualitas Pelayanan BPJS Kesehatan terhadap Kepuasan Pengguna
16
The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
ENHANCING THE AWARENESS OF FARMERS’ TOWARDS THEIR ROLE THROUGH GAMIFICATION Himawan Nur Ardhito1, Yuanita Handayati2, Nur Arief Rahmatsyah Putranto3
1 School of Business and Management, Institut Teknologi Bandung, Indonesia 2 School of Business and Management, Institut Teknologi Bandung, Indonesia 3 School of Business and Management, Institut Teknologi Bandung, Indonesia
ARTICLE INFO ABSTRACT Article history: Rice is the most popular commodities in Indonesia. 90% of rice producers are small- Received holder farmers which mainly live in rural area with lack of awareness towards their Revised supply chain. The problem was arisen from a group of farmers in district Kongsija- Accepted ya, Widasari, Indramayu, where there are two techniques applied (mechanism and conventional) within the group and it results differently and affects the capability to JEL Classification: fulfill the demand of unhulled-rice and they are also not aware of the effect. To en- hance the awareness of the farmers’ role, gamification is the method that will be used as the treatment. Gamification is the application of game features for the purpose of Key words: enhancement in learning which has many types; one of them is instructional board- agriculture, awareness, rice supply game. This research aims to propose a suitable game for the farmers. This study used chain, gamification, board-game observation and interview to obtain information. From the data obtained, the re- searchers were able to design the suitable game, which is a board-game. It was made DOI: 10.6084/m9.figshare.9810827 with simple rules so the farmers’ could understand the simulation that relates to the real life situation. The result is expected to suit the farmers’ situation that will en- hance the awareness of their role towards the rice supply chain.
ABSTRAK Beras adalah komoditas paling populer di Indonesia. 90% dari produsen beras adalah petani kecil yang sebagian besar tinggal di daerah pedesaan dengan kurangnya kesadaran terhadap rantai pasokan mereka. Permasalahan muncul dari sekelompok petani di distrik Kongsijaya, Widasari, Indramayu, di mana ada dua teknik yang dit- erapkan (mekanisme dan konvensional) dalam kelompok dan hasilnya berbeda, juga mempengaruhi kemampuan untuk memenuhi permintaan gabah dan mereka juga tidak menyadari efeknya. Untuk meningkatkan kesadaran akan peran petani, gamifi- kasi adalah metode yang akan digunakan sebagai pembelajaran. Gamifikasi adalah aplikasi fitur permainan bertujuan untuk meningkatkan pembelajaran yang memiliki banyak jenis; salah satunya adalah papan permainan instruksional. Penelitian ini bertujuan untuk mengusulkan game yang cocok untuk para petani. Penelitian ini menggunakan observasi dan wawancara untuk mendapatkan informasi. Dari data yang diperoleh, para peneliti mampu merancang game yang cocok, yaitu board-game. Board-game tersebut dibuat dengan aturan sederhana sehingga petani bisa memahami simulasi yang berkaitan dengan situasi kehidupan nyata. Hasil dari penelitian ini diharapkan bahwa gim tersebut sesuai dengan situasi petani yang akan meningkatkan kesadaran akan peran mereka terhadap rantai pasokan beras.
1. INTRODUCTION definition of agriculture is stated in (merriam- Indonesia is the 4th most populated country in webster.com, 2019), agriculture is the science, art, the world and almost half of the population lives in or practice of cultivating the soil, producing crops, rural areas. Based on (BPS, 2014), there are 74,093 and raising livestock and in varying degrees the rural areas and 20,432 of them are underdeveloped preparation and marketing of the resulting prod- districts. One of the popular livelihoods in the un- ucts. derdeveloped districts is agricultural sector. Referring to Indonesian Agriculture, BPS Chief Agriculture is a process for producing food, said that agricultural, forestry and fishery sectors livestock, and industrial products by utilizing plant are in the amount of 30,46% from the total of jobs in and animal resources (Sungkawa, n.d.). Another Indonesia (Sicca, 2018). Relating to the GDP of In-
* Corresponding author, email address: 1 [email protected], 2 [email protected], 3 [email protected] donesia, agricultural sector contributes for more-or- er the farmers are using non-optimal production less 14% as it can be seen on the figure below. techniques, the production results could not be abundant. Figure 1.1. GDP by Sectors and Its Distribution On the other hand, this problem affects to its Source: Badan Pusat Statistik, 2014 agricultural supply chain; mostly to the milling factory. For almost 90% of Indonesia’s rice is pro- duced by small-scale farmers and these farmers usually produce low quality rice (rikolto.org, 2019). However, the demand for premium rice quality is growing and the consumers are no longer satisfied with low or medium quality rice and yet they are happy to pay up to three times more for premium quality rice that is certified “healthy” (rikolto.org, 2019). The study also added that the sale of premi- There are several important products that pro- um rice increased 20-25% per year in Indonesia. duced from the agricultural sector in Indonesia To at least reduce the problem occurs and to which are Palm oil, Rubber, Cocoa, Coffee, Tea, have an optimal production or a success produc- Cassava, Rice and Tropical Spice. In this paper, the tion of rice, farmers supposed to use advanced researcher is focusing on Rice product from Indo- technologies. Most modern agricultural systems nesian agriculture. have developed as a result of technological advanc- Indonesia is among the top five rice producer es and related developments, for example: agricul- countries in the world. Moreover, Indonesia is one tural equipment, fertilizers, pesticides, new crop of the following countries－Bangladesh, Vietnam, varieties and livestock with enhanced genetic po- China, India, Myanmar, Thailand, the Philippines, tential (Jaslam, 2017). Stimulating technological Japan, Pakistan, Cambodia, the Republic of Korea, innovation and providing fertilizers has been done － Nepal, and Sri Lanka to contribute 90% of the by the government’s approach to encourage farm- world's total rice production (Muthayya, S., J. Hall, ers to increase their production and to reach self- J. Bagriansky, et al., 2012). sufficiency (Indonesia Investments, 2017). Based on a research conducted by Indonesia In- In the paper, the researchers found such prob- vestment (2017): lem in a district in Indramayu Regency, West Java, Rice production in Indonesia is dominated by Indonesia. The most livelihoods in Indramayu smallholder farmers, not by big private or state-owned come from rice harvesting. Agricultural products in enterprises. Smallholder farmers account for around 90 percent of Indonesia's rice production, each farmer hold- Indramayu district are rice, although it is not the ing an average land area of less than 0.8 hectares. largest rice producer, but the people of Indramayu Ironically, even though that Indonesia is one of generally have livelihoods as farmers, because most the world’s largest rice producers, it still has to im- of the Indramayu region is agricultural land (in- port rice almost every year to keep the reserves at a foindramayu.com, 2016). safe level because of farmers' use of non-optimal The researchers conducted an observation and production techniques in combination with large interview to analyze and to obtain information to- per capita rice consumption (Indonesia Invest- wards its problem. Meanwhile, the farmers in In- ments, 2017). dramayu are dominantly using non mechanized To accentuate, Indonesia rice farmers are most- technique in cultivating. This affects the rice sup- ly held by the smallholder. Staple crops such as ply-chain in the district where the group of farmers corn, sugar and rice alongside vegetables for do- cannot produce premium unhulled rice quality due mestic consumption are mainly carried out by to the lack of awareness from the method that they smallholding farmers (gbgindonesia.com, 2011). used. Thus, the researchers are intended to use Smallholder crop–livestock systems are character- gamification as the media to minimize the problem ized by the interdependence of crop production occurs. and livestock husbandry and form the basis of the Some researchers believe that gamification can livelihood of two-thirds of the population in devel- solve problems regarding pedagogical. Gamifica- oping countries (Klapwijk et al., 2014). On the pa- tion is seen as the process of game-thinking and per of (Panuju, et al. 2013), agricultural mechaniza- game mechanics to encourage users and solve tion has never been fully deployed to a small-scale problems (Zichermann and Cunningham’s, 2011). farming system, especially in Java. Hence, whenev- This research is aiming to create a suitable yet use-
18 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
ful game for a group of smallholder farmers in In- elements to be applied to non-game activities (Nis- dramayu. To help in designing the game, in this tor & Iacob 2018). According to the book of Kapp study the researchers will also design post- (2012), learning professionals are finding success gamification interview to get feedbacks from the applying game-based sentience to the development involving farmers. The researchers use qualitative of instruction. Encouraging motivation and en- method by observing and interviewing the in- gagement in learning can be done by applying volved group of farmers’ members. This statement game features into non-game context, by means of is supported by the book of Kapp (2012) on how to gamification (Alsawaier, 2018). Gamification is uti- match different game strategies to types of learning lizing mechanics, aesthetics, and fun atmosphere in content for the right learning outcome and discuss- games elements to engage, promote, and inspire es how gamification techniques can be used in a people to learn and solve any particular problems variety of settings to improve learning, retention in real activities and productive ways (Zichermann and application of knowledge. Therefore, through & Cunningham, 2011). Gamification solutions ap- gamification, the game is intended to results better ply the concepts of games and challenges to moti- farmers’ awareness towards its chain and what vate, engage and reward employees and customers game design that the researchers can propose to (NASDAQ OMX Corporate Solutions, Inc., 2017). enhance the farmers’ awareness towards their role The use of gamification in the context of education in rice supply-chain? is believed to increase the motivation and engage- The scope and limitation in this study will be a ment of users in learning, shape learner’s behavior, group of smallholder farmers in Kongsijaya, Wida- and increase the desire to compete and cooperate sari, Indramayu called “Sri Rahayu 3 Kongsijaya”. (Dicheva & Dichev, 2015). Gamification can give provoke and stimulus for change behaviour (Hu- 2. THEORETICAL FRAMEWORK AND HY- otari & Hamari, 2012). POTHESES Gamification’s function is seen to make daily Agriculture work more fun, enjoyable, meaningful, and engag- Agriculture defined as many ways in which ing (Bringham, 2015). The study of Squire and Jen- crop plants and domestic animals sustain the kins (2003) shows that another function of gamifica- global human population by providing food tion is to improve skills and ability besides for en- and other products (Harris & Fuller, 2014). Anoth- tertain. Gamification is widely known and used in er definition stated by Harris et. al (2014) that agri- many sectors: management sector such as innova- culture words have their own descriptive terms tion management, marketing, security, information such as, cultivation, horticulture, arboriculture, and technology management, change management, vegeculture, also as forms of livestock management human resources management (Walz & Deterding, such as mixed crop-livestock farming, pastoralism, 2015). and transhumance. Agriculture continues to be a Based on Khan and Pearce (2015), there are fundamental instrument for sustainable develop- several types of gamification to relieve and engage ment and poverty reduction (Pal et al., 2018). Dis- subjects: blended learning, games include computer cussing the agriculture supply chain, most Indone- games, role-playing games, business simulation sian small-holding to medium-sized farmers sell games, and instructional board games. Resulting their produce directly to the local mills other than from a research of a subject, 67% of the involved keeping it for their own use (Muthayya et. al, 2014). subject chose board games as number one game Another study of Muttaya et al. (2014) is while me- amongst the other types (Taspinar, et al., 2016). dium- and large-scale rice milling factory can be From this fact, it can be concluded that board game found in the large rice-producing regions and plays is one of the methods that is popular. two main roles: (1) cleaning, dehusking, and polish- Conceptual Framework ing rice and (2) supplying rice through wholesale Based on the previous literature review, the traders to markets where there is demand and researchers develop the conceptual framework only where rice can be sold at better prices. discussing from gamification to post-gamification Gamification interview to obtain feedbacks from involving farm- Gamification is the application of game fea- ers. The following figure will be shown below. tures, mostly video game elements, into non-game context for the purpose of encouraging motivation Figure 2. Conceptual Framework and engagement in learning (Alsawaier, 2018). Gamification is defined as tools that create game
19 researchers explain regarding the place, the prob- lem’s background and who is involved in the dis- cussed problems. Another thing to be discussed in this stage is the gamification method and what will
3. RESEARCH METHOD the design of the game be. 3.1. Research Design 3.3. Theoretical Framework In this part, it will explain about the flow that In this stage, the researchers look for theories the researcher did to do the research until it finish- that support this research that have been used in es. The flow will be described on the following fig- this research about gamification. In addition, previ- ure: ous research also needed to support data and to develop a conceptual framework. Figure 3.1 Research Design/Flow 3.4. Data Collection 3.4.1. Representatives (Sampling) The object of this research will be 6 farmers that represented Sri Rahayu 3 Kongsijaya group of farmers that are the interviewees and will test the game also to give feedbacks to the researchers about the intended game. 3.4.2. Observation The researchers conducted a field-study by do- ing an observation. The researchers explore In- dramayu to know the exact location and to get deeper information about the occurring problem. 3.4.3. In-depth Interview To validate the data obtained from exploratory research, the researchers conducted an in-depth interview to the involved parties in the rice supply- chain. In this case, the interviewees are the chief of Sri Rahayu 3 Kongsijaya group of farmers and the owner of milling factory that buys the unhulled rices from the farmers. 3.4.4. Developing Game Design The study is an exploratory research that used 3.4.4.1. Findings qualitative approach. Started from problem identi- In this stage, the researchers did the observa- fication that was received from preliminary re- tion to Kongsijaya District, Widasari, Indramayu. search which are observation and interview. Fol- During the observation, the researchers conducted lowed by theoretical review and designing the con- two interviews: to the milling factory’s owner and ceptual framework. To obtain the data, the re- the head of Sri Rahayu 3 Kongsijaya group. searchers finalized the sampling with the involving Regarding to the Pak Haji Fuad as the owner of group of farmers and used observation and in- medium-scale milling factory in Kongsijaya Dis- depth interview with the involving farmers to vali- trict, the related questions are: If any programs date. The observation and interview is conducted conducted for the farmers to enhance their produc- directly in place. Yet these data will be useful in tivity, distribution of unhulled rice qualities and its designing and developing the intended game for prices, purchasing mechanism of the unhulled rice, Sri Rahayu 3 Kongsijaya group of farmers. After- what factors or cases that could interfere the pro- wards, the analysis and discussion, conclusion, duction, additional process to produce premium implication, suggestions and limitations will be quality rice, and the ratio of the market demand on written. rice qualities. 3.2. Problem Identification Another interview was given to the Head of Sri One of the most important parts of this paper Rahayu 3 Kongsijaya group, Pak Tomi. The intend- is to identify the problem first. The researchers ed questions are regarding to: the farmers’ method found the arising problem by doing a field-study in or technique in cultivating, operational cost and Indramayu. In this stage, the researchers also ex- what are the effects to the results, ratio of good and plain about the problem that will be studied and bad unhulled rice, advantages and disadvantages explains the importance of doing the research. The
20 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
of each techniques, post-harvest, unhulled rice du- gather the data, preliminary research was done rability, selling price per kg, factors that could af- earlier by an observation and interview. Designing fect lost, where to sold, profit dividend. the game is made afterwards. While designing the game, the researchers look up to the obtained data The related questions can be seen in appendix 1. from the observation and interview. Hence, the results will be analyzed in the end. Be- 3.4.4.2. Gamification Conceptualization fore moving forward to game design, the research- In this part, the researchers try to conceptual- ers must have the data first. The data are as shown ize the game design for purposing to enhance the in the table below. farmers’ awareness towards their role in rice sup- ply-chain. Table 3.1. Data from observation and interview Farmers in a group 82 farmers Figure 3.2. Gamification Concept Operational Cost Conventional is higher Mechanized: fast-drying, mostly Advantages on each better quality techniques Conventional: quantity but no guarantee for better quality Premium: Rp6.500 - Rp6.900 Price for farmers Medium to low: Rp4.500 - Rp5.500 Factors that caused Unfriendly weather farmers' suffering Keep: when harvested in summer to wait for inclining standard price for rice by the The figure above created from the given in- Post-harvesting government formation on the data before. It started from the Sell: harvested when the facts of Sri Rahayu 3 Kongsijaya group farmers that weather is unfriendly most of them are still using non-mechanized meth- Durability of od in cultivating paddy. It affects the quantities Up to 4 months unhulled rice produced that hence, could not meet the required demand. Another given information is that after Good quality: 75-80kg Production of the paddy has been harvested, farmers have the choice to keep before selling or to sell after harvest. unhulled rice Bad quality: 100kg, can be This conceptualization will leads to the proposed unhusked into 50kg game-design to solve the farmers’ awareness prob- Where to sell Most cases: 1 milling factory lem to its supply chain. Profit dividend Individual 3.4.4.3. Farmer’s feedback Premium After the game has been created, the research- Quality for ers want to validate if the game is suitable enough unhulled rice Medium and useful for the farmers to enhance the farmers’ Low (sayur) awareness through interviewing. The indicators are Premium: based on the satisfaction and reliable, also additional feedbacks Prices for milling government's pricing standard. from the farmers. factory Highest= Rp12.500 3.5. Data Analysis and Discussion The data that collected from in-depth inter- Unexpected incident i.e. Factors that view and observation will be analyzed using de- electrical power interfere the scriptive approach. Subsequently, it will discuss the production Bad quality of unhulled rice that game form and the results that are obtained from the farmers produce the feedbacks of the involved farmers. The ques- Demand for rice tions for interviewing the involving farmers cover: Premium: approximately 70% from the market Satisfaction & Reliability/Suitability to the real-life situation. The researchers are using primary data and 3.6. Conclusion, Implication, Suggestions, and Lim- additional data to support the information. To itations
21 After conducting all research design from enhance the awareness to their knowledge, while problem identification until designing the game collaboration is the external event that comfort the and getting feedbacks, the researchers generate players to do something actively. These two terms conclusion as overall answer of the research ques- are intended to stimulate the players’ extrinsic moti- tion and research objectives. The researchers then vation. Rewards, grades, “performance and competi- will create a better and improved game after direct tion or evaluation by others” are the relevant ele- feedbacks from the farmers. ments of extrinsic motivation that is not related to the task value (Alsawaier, 2018). 4. DATA ANALYSIS AND DISCUSSION 4.2. In-depth Interview Results In this section, the researchers discuss the re- After the form of the game was created, the re- sults that they proceed from the data and findings searchers tested a quick round to get some results earlier using the method that has been mentioned and feedbacks from the players which are the farm- in the previous sections which is by gamification. ers. The concept is expected to answer the related prob- Table 4.1. Feedbacks lem. No Question Type Feedback Descrip- 4.1. Game Form tion Gamification is not just about creating a game 1 Satisfaction 6/6 farmers judge which gives a lesson; it is more applying the game that the game is thinking to how the players get the lesson and con- simple, satisfying tinue to develop by getting the feedbacks Based on and fun Taspinar, et al. (2016), game design essentially bases 2 Reliable 6/6 farmers consid- on these aspects: player types as stereotypes, devel- ered that the game oped to characterize players and game mechanics as is reliable enough to instruments to appeal players. From the previous simulate the situa- study of Taspinar, et al. (2016), board games are tion, but there are seen to be more popular than other type of gamifi- some added notes cation design. Thus, to give an ease to the objects for it (farmers), a board game is made to simulate the 3 The event should events happened in real life. The design of the game have added more will be shown in the figure below. complex situations Figure 4.1.Finalized board-game design Recommendation It should have had written direction where to go after harvest
From the results, 6/6 farmers that played the quick-game are quite satisfied with the game. They said that it is understandable and fun to have played the game. In addition, 6/6 farmers also said that the game is reliable enough to simulate the real-life situ- ation, but there are some points that need to be add- ed on the game. The board game made for the players is yet simple but educating. The players itself are farmers 5. CONCLUSION, IMPLICATION, SUGGES- within Sri Rahayu 3 Kongsijaya group that will di- TION, AND LIMITATIONS vided into another two groups. To gain the farmers’ Conclusion intrinsic motivation, the game should be made as After the researchers’ studied about rice farm- understandable as it could. This gamification proce- ing condition in agricultural supply chain of a dis- dure have some rules (see on appendix 2) to guide trict in Kongsijaya, Widasari, Indramayu, they are the players and to describe the game. striving to increase the knowledge and awareness Furthermore, the gamification process is done of the farmers towards their roles. Gamification is a by competition and collaboration amongst the play- method that the researchers’ believe to solve such ers. Competition is a term to motivate players to problem. Gamification is considered as an easy way compete until they got the rewards, hence it will
22 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
to enhance people’s knowledge by applying game production, supply, trade, and consumption. features into non-game context with a fun learning. Annals Of The New York Academy Of Scienc- Therefore, the researchers were striving to create a es, 1324(1), 7-14. doi: 10.1111/nyas.12540 game-based design for farmers that they could find Food and Agricultural Organisation. 2013. FAO- no difficulties in learning something. STAT Database. Rome: Food and Agricultural In conclusion, gamification has many types to Organization apply until the researchers chose to make a board Muthayya, S., J. Hall, J. Bagriansky, et al. 2012. Rice game to simulate the real-life situation that hap- Fortification—an emerging opportunity to con- pens in rice supply chain of district Kongsijaya, tribute to the elimination of vitamin and min- Widasari, Indramayu. This board game has a rule eral deficiency worldwide. Food Nutr. Bull. 33: to play and it is as easy as it can to attract the will- 296–307 ingness of the intended farmers to play. Therefore, Suryaningrat, I.B., Salokhe, V.M., Hicks, P.A., 2003. the board game is the gamification type that is most Fruit Processing in East Java: Challenges and suitable that the researcher can propose although Constrains. Food and Beverage. Asia there are some points that need to be added and Suryaningrat, I. (2016). Raw Material Procurement improved. on Agroindustrial Supply Chain Management: Implication, Suggestion and Limitation A Case Survey of Fruit Processing Industries in The object of this research is a group of farmers Indonesia. Agriculture And Agricultural Sci- in district Kongsijaya, Widasari, Indramayu, which ence Procedia, 9, 253-257. doi: in further it will be divided into several farmers to 10.1016/j.aaspro.2016.02.143 play. This research is only to answer what the game Dickson, G.W., 1966. An analysis of vendor selec- design will be without testing the effectiveness of it. tion systems and decisions. Journal of Purchas- Therefore, in further research the researchers ing 2(1), 5-17. should test whether the game is effective enough Merriam-webster.com (2019). Definition of AGRI- for the farmers, also after the board-simulation CULTURE Retrieved from game whether the farmers or the players that did https://www.merriam- the gamification test are understood with the real- webster.com/dictionary/agriculture life situation and will they change their method to Sungkawa, D. Mata Pencaharian Penduduk Indo- adapt the current event to improve the rice produc- nesia [Ebook]. Bandung: Universitas Pendidi- tion quality. kan Indonesia. Retrieved from http://file.upi.edu/Direktori/FPIPS/JUR._PE REFERENCES ND._GEOGRAFI/195502101980021- Badan Pusat Statistik. (2014). Retrieved from DADANG_SUNGKAWA/Power_Point.pdf https://www.bps.go.id/dynamictable/2018/0 infoindramayu.com. (2016). Perekonomian di Ka- 5/21/1356/jumlah-desa-tertinggal-2014.html bupaten Indramayu - Info Indramayu. Re- Sicca, S. (2018). BPS: Jumlah Penduduk Bekerja trieved from Triwulan I 2018 Sebanyak 127,07 Juta- Tirto.ID. http://www.infoindramayu.com/perekonomi Retrieved from https://tirto.id/bps-jumlah- an-di-kabupaten-indramayu/ penduduk-bekerja-triwulan-i-2018-sebanyak- Jaslam. (2017). Role of Optimization Techniques in 12707-juta-cJ5D Agriculture [Ebook]. GRIN. Investments, Indonesia. Agriculture Sector of Indo- factsofindonesia.com. (2017). Agriculture of Indo- nesia - Indonesian Agriculture Products | In- nesia - Food Production - Development - Facts donesia Investments. Retrieved from of Indonesia. Retrieved from https://www.indonesia- https://factsofindonesia.com/agriculture-of- investments.com/culture/economy/general- indonesia economic-outline/agriculture/item378 gbgindonesia.com. (2011). Indonesia Agriculture Investments, Indonesia. (2017). Rice Production Sector | GBG. Retrieved from Indonesia | Indonesia Investments. Retrieved http://www.gbgindonesia.com/en/agricultur from https://www.indonesia- e/article/2011/agriculture_overview_of_indo invest- nesia.php ments.com/business/commodities/rice/item1 Klapwijk, C., van Wijk, M., Rosenstock, T., van As- 83 ten, P., Thornton, P., & Giller, K. (2014). Analy- Muthayya, S., Sugimoto, J., Montgomery, S., & Ma- sis of trade-offs in agricultural systems: current berly, G. (2014). An overview of global rice status and way forward. Current Opinion In
23 Environmental Sustainability, 6, 110-115. doi: Alsawaier, R. (2018). The effect of gamification on 10.1016/j.cosust.2013.11.012 motivation and engagement. International Panuju, D., Mizuno, K., & Trisasongko, B. (2013). Journal Of Information And Learning Tech- The dynamics of rice production in Indonesia nology, 35(1), 56-79. doi: 10.1108/ijilt-02-2017- 1961–2009. Journal Of The Saudi Society Of 0009 Agricultural Sciences, 12(1), 27-37. doi: Rathbun, AH, West, J & Hausken, EG 2003, Young 10.1016/j.jssas.2012.05.002 children's access to computers in the home and at rikolto.org. (2019). Premium quality rice for urban school in 1999 and 2000, NCES-2003-036, Na- consumers in Indonesia and beyond | Rikolto tional Center for Education Statistics, Washing- (International). Retrieved 16 July 2019, from ton, DC, viewed 4 November 2003, https://www.rikolto.org/en/project/premiu
APPENDICES 1) Rekapan pertanyaan dari Poktan dan RMU Karang Anyar, Kongsijaya, Widasari, Indramayu: Pertanyaan untuk petani 1. Bagaimana metode tanam yg diterapkan oleh petani muda dan petani tua? Proses yang dilakukan oleh petani tua dan yang muda sebenarnya sama. Namun, cara mereka melakukannya ada yang berbeda. Kurang lebih baru 10% dari satu kelompok petani bapak Tomi yang dianggotakan 82 petani menggunakan teknologi yang lebih maju (mekanisasi) dibandingkan petani- petani tua yang masih melakukan bercocok tanam dengan cara konvensional (manual). Teknologi yang
24 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
dipakai ada 3 macam, yaitu traktor roda 4 (untuk membajak), mesin tanam, dan mesin panen (combine harvester).
2. Berapa cost untuk masing masing metode dan bagaimana pengaruhnya terhadap hasil panen? Be- rapa kuantitas minimum maksimum dan paling sering? Bagaimana rasio gabah bagus dan kurang bagus yg dihasilkan dari masing2 metode? Cost untuk metode konvensional (manual) ternyata lebih mahal. Operational cost yang ditanggung oleh petani yang bertanam dengan cara tersebut banyak kearah biaya obat-obat perawatan sawah karena ber- tanam masih dengan cara manual. Sedangkan dengan menggunakan teknologi, untuk mencapai kualitas yang bagus tidak banyak perawatannya, namun tetap dijaga. Mesin-mesin yang dipakai juga diberi ok- num dinas atau pemerintah. Untuk hasil panen sebenarnya sama-sama bagus, sebenarnya sangat tergan- tung cuaca.
3. Apa kelebihan dan kekurangan masing2 metode tanam? Ada pengaruhnya sama kualitas gabah yg dihasilkan? Kalau panen dengan cara manual, pada saat dijemur dan tiba-tiba hujan, kualitas akan lebih rendah, se- dangkan dengan memakai teknologi combine harvester, gabah akan langsung kering. Dari segi kuantitas, memang cara manual lebih banyak, akan tetapi tidak menjaminkan bahwa yang dihasilkan lebih bagus.
4. Berapa harga jual gabah minimum maksimum paling sering? Selain patokan dari pemerintah (HET), sisi petani dan sisi pabrik (penggiling) negosiasi. Harga ditetap- kan oleh pabrik. Biasanya per kilo 5500-6500 rupiah untuk gabah PK (Pecah Kulit).
5. Pernah rugi? Gara gara apa? Faktor apa saja yg mempengaruhi? Dari kelompok pak Tomi, kerugian yang paling besar adalah karena faktor cuaca, dimana pada saat proses mengeringkan (menjemur gabah), jika hujan datang maka akan mempengaruhi kualitas gabah. Kualitas gabah terendah dihargai rendah juga.
6. Hasil panen biasanya langsung dijual atau suka disimpan dulu? Kenapa disimpan? Kapan dijual? Tergantung musim. Jika panen disaat musim hujan, hasil akan langsung dijual ke pabrik baik hasil dari metode manual maupun mekanisasi. Jika panen pada saat musim panas/kemarau, hasil kebanyakan disimpan, ditunggu pada saat HET dari pemerintah naik.
7. Gabah bisa disimpan berapa lama? Sampai berapa musim panen berikutnya? Sekitar 3 bulan, paling lama 4 bulan.
8. Apakah info demand dr penggilingan sudah diinfokan sebelumnya? Apa ada konsekuensi klo petani tdk bs penuhi demand? Gmana klo hasil panen petani lebih besar dr demand? Ada. Sebelum membeli, biasanya orang dari pabrik (penggiling) datang ke lapangan atau ke gudang penyimpanan untuk melihat kuantitas produksi gabah PK yang tersedia. Pak Tomi, selaku ketua salah satu Poktan widasari berkata bahwa mereka menerima berapapun dari apa yang dihasilkan oleh para petani. Bahkan, sering sekali hasil panen melebihi permintaan pabrik. Jika pabrik menerima jumlah yang lebih, biasanya mereka yang menyelesaikan masalah tersebut, karena petani hanya menyediakan gabah saja.
9. Apa petani selalu jual ke satu penggilingan? Klo tdk berdasarkan apa? Apa harga gabah tergantung pada supply dan demand? Berapa rangenya? Tidak. Petani jual gabah yang mereka hasilkan juga ke beberapa penggiling, namun banyak yang sudah menetap di satu pabrik. Selain bergantung pada supply dan demand, harga juga sering ditentukan oleh pihak penggiling, juga berdasarkan atas kualitas. Range harga sama dengan yang disebutkan sebe- lumnya. Untuk gabah PK, harga sekitar 5500-6500 rupiah.
10. Bagaimana pembagian keuntungan antar petani dengan kelompok tani. Apa petani harus jual me- lalu kelompoknya atau bs sendiri? Alasannya apa klo sendiri? Semua aktivitas panen dan jual dilakukan masih individu. Kelompok tani yang ada di Widasari hanya
25
sebagai komunitas, juga berbagi fasilitas-fasilitas bercocok tanam, contoh: traktor, air PAM sebagai peng- ganti air irigasi, mesin tanam dan mesin panen, serta pembagian bibit, pupuk, dan kapur dari pemerintah. Menurut mereka, jika penjualan dilakukan dengan individu, maka lebih adil pembagian hasilnya, karena apa yang mereka dapatkan adalah hasil dari apa yang mereka lakukan.
11. Apa semua petani menghasilkan kualitas gabah yg sama? Klo beda apa disatukan semua kualitas yg ada atau pisah pisah? Gmana harga jualnya klo kualitas beda, gmana yg didapat petani? Pak Tomi berkata bahwa rata-rata kualitas yang dihasilkan oleh Poktan di Widasari sama. Karena untuk mencapai kualitas PK yang bagus bisa dilakukan dengan bagaimanapun, hanya operational cost yang membedakan karena tergantung dengan metode masing-masing petani. Untuk harga jual, kalau kulitnya beda / berubah, kurang bagus. Jadi harga pasti lebih murah.
12. Biaya apa yg muncul ketika mau jual gabah? Processing, transport? Gimana mekanisme alokasi biaya di gapoktan atau individu? Perawatan, transportasi masuk dalam biaya yang harus dikeluarkan. Beberapa petani yang mempunyai mesin penggiling kecil juga mengeluarkan biaya perawatan mesin tersebut, sebelum dijual ke pabrik (penggiling). Alokasi biaya tetap individu, namun jika ada keperluan seperti sharing pengeluaran fasili- tas, alokasi biayanya di kelompok tani widasari.
Pertanyaan untuk penggilingan 1. Apa selama ini ada program untuk meningkatkan produktivitas petani? Berapa biayanya? Untuk program produktivitas petani tidak ada, karena tidak ada hubungan yang diikutcampurkan dengan aktivitas panen petani. Yang ada adalah meningkatkan produktivitas pabrik, dari memperbaiki dan mengupgrade mesin penggiling, serta pegawai pabrik.
2. Gabah terbagi berapa kualitas? Harganya gmana? Dari petani berbeda? Mekanisme beli nya gma- na? Gabah dibagi menjadi 3 kualitas atau jenis: premium, medium, sayur. Harga jual berbeda, tapi tetap mengikuti HET. Paling tinggi untuk kualitas premium dihargai Rp12.500, rata-rata Rp10.000 per kilo. Pada saat membeli, bukan langsung dari petani, tapi distributor kecil harga biasanya 6500 rupiah. Juga disebutkan bahwa pak Haji Fuad kebanyakan belanja beras (gabah) sendiri untuk digiling.
3. Faktor dan kejadian apa yang bisa mengganggu aktivitas produksi Tenaga kerja, faktor eksternal seperti terganggunya aktivitas produksi yang disebabkan oleh matinya listrik dari PLN. Untuk masalah dengan petani pernah terjadi, jika petani menghasilkan gabah yang ku- rang baik terlalu banyak kuantitasnya, sehingga untuk memproses gabah PK menjadi premium butuh waktu yang lebih lama dikarenakan akan kebutuhan untuk memoles dan menggiling dua kali.
4. Apa ada proses tambahan yg bisa meningkatkan jumlah premium? Berapa biayanya? Ada. Proses penggilingannya 3x dalam sekali produksi, filterisasi bahan (pilah-pilih gabah PK). Biaya tambahan ada, tetapi tidak disebutkan berapa.
5. Bagaimana rasio permintaan beras medium dan premium? Untuk premium, perkiraan 70% dari hasil beras yang ada.
Catatan singkat: Pertama kali datang, langsung wawancara dengan pak Haji Fuad selaku pemilik pabrik penggiling di Widasari, Indramayu. Selain dari jawaban-jawaban beliau mengenai pertanyaan-pertanyaan diatas, be- liau mengatakan bahwa terkadang, pihak pabrik membeli beras (gabah) sendiri, diluar dari petani, juga tidak hanya satu Poktan melainkan juga menerima gabah dari beberapa petani dari Poktan yang berbeda. Selain itu, beliau menyebutkan bahwa untuk memproduksi beras premium sebenarnya bisa dari kualitas gabah yang tidak terlalu bagus, namun perlu proses yang lebih, seperti diperbanyak proses polishing. Untuk kapasitas produksi sendiri, per hari 6-8 ton. Beliau juga menceritakan masalah yang ada terhadap petani. Masalah yang kebanyakan dialami adalah kualitas gabah hasil panen dari petani. Beliau me-
26 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
nyebutkan pernah terjadi keributan kecil antara distributor kecil dengan pihak pabrik karena gabah PK yang diterima dari hulu (petani). Banyak gabah PK yang kualitasnya kurang bagus.
Setelah wawancara dengan pak Haji Fuad, wawancara dengan pak Tomi, selaku ketua Poktan di Wida- sari dilaksanakan. Diluar pertanyaan, pak Tomi banyak cerita tentang hasil gabah, juga bagaimana petani-petani memperoleh bibit-bibit untuk ditanam. Dikaitkan dengan masalah yang dialami oleh pak Haji Fuad, uniknya pak Tomi menyebutkan bahwa jarang sekali ada masalah dengan pabrik. Mereka hanya menerima dari apa yang petani hasilkan. Namun, setelah percakapan yang lebih dalam, pak Tomi juga menyinggung tentang hasil panen dari petani yang melakukan metode konvensional (manual). Mungkin, setidakpengetahuan pak Tomi bahwa mungkin masalah yang dialami pabrik salah satunya karena hal tersebut.
2) Game Rules: • 4 players • Each teams get Rp100.000 for initial capital • There are two methods: A & B • Method A: needs 3 periods to harvest • Method B: needs 2 periods to harvest • The game prepared 4 fields for each person: - The person may cultivate or not - The person may choose whatever the methods are - 1 Field for 1 Method • Each fields cost Rp20.000 to cultivate • Post-harvest→ the person may choose whether the unhulled rice goes to Storage or Dryer • The amount of harvested unhulled rice depends on the harvest card based on each chosen method • If goes to Storage = Sell directly • If goes to Dryer = Needs 1 extra period to be dried, then goes to Storage to be sold • Wet unhulled rice medium sold for Rp10.000/ton • Wet unhulled rice premium sold for Rp15.000/ton • Dried unhulled rice medium sold for Rp15.000/ton • Dried unhulled rice premium sold for Rp20.000/ton • The amount of unhulled rice sold depends on demand and quality • There will be 3 demand cards that are drawn every 3 rounds • Unsold unhulled rice stays at the storage • There are event cards for giving information of incidents
The winner is based on the profit and total quantity of sold unhulled rice.
27
The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
Effects Of Loan Interest Rate, Service Quality, And Promotion On Debtor Loyalty Of Conventional Bank In Surabaya
Mudik Supramono Magister Managemen,STIE Perbanas JL.Ngiden Semolo No.34-36 Ngenden Jangkungan,Sukolilo,Surabaya, Jawa Timur
ARTICLE INFO ABSTRACT
Article history: Abstract Customer loyalty to the company's products and services over a period of time Received got the result in greater income annuities for the company. Research on debtor loyalty of Revised conventional bank and the involvement of variable loan interest rates, service quality and Accepted promotion at conventional banks in Surabaya has the aim of analyzing the effects of loan interest rate, service quality, and promotion on debtor loyalty of conventional bank in JEL Classification: Surabaya. The research population was a survey / sampling of conventional bank debtors. By using conventional bank debtor data processing on samples were 112 respondents. The test model used SPSS software for Windows version 20, analysis of the validation test Key words: model and reliability test, through multiple linear regressions. The regression equation Loan Interest Rates, Service Quality, must be BLUE (Best Linear Unlimited Estimator) with assumptions included: normality, Promotions, Debtor Loyalty multicollinearity and autocorrelation sampling method with non-probability in judgment sampling and Amos 22 software assistance. Normality test results were seen in normal DOI: 10.6084/m9.figshare.9810848 probability plot graph comparing normal distribution. If the data spread around the diagonal line and follows the direction of the diagonal line, then normality was fulfilled. The results of multicollinearity and autocorrelation analysis showed within the expected value range. The results of the study indicated that the variable of debtor loyalty and engagement variables such as loan interest rates, service quality and promotions showed positive results. The other research findings were:1). From the results of the analysis it was
stated that the Loan Interest Rate (X1) had a significant influence on the Debtor Loyalty
(Y) of conventional banks. Thus hypothesis one (H1) stated that the loan interest rate had
a significant effect on Debtor Loyalty. 2). From the analysis results it was stated that Service Quality (X2) had a significant influence on the Debtor Loyalty (Y) of conventional banks. Thus hypothesis two (H2) which stated that Service Quality had a significant effect on Debtor Loyalty was accepted. 3) The results of the analysis that were stated Promotion (X3) had a significant influence on the Debtor Loyalty (Y) of conventional banks. Thus the third hypothesis (H3) which stated that Promotion had a significant effect on Debtor Loyalty was accepted.
Keywords: Loan Interest Rates, Service Quality, Promotions, Debtor Loyalty
ABSTRAK
Loyalitas pelanggan terhadap produk dan jasa perusahaan selama periode waktu akan menghasilkan anuitas pendapatan yang lebih besar bagi perusahaan. Penelitian loyalitas debitur Bank konvensional dan keterlibatan variabel tingkat bunga pinjaman,kualitas layanan dan promosi pada bank konvensional di Surabaya mempunyai tujuan menganalisa pengaruh
tingkat suku bunga pinjaman, kualitas layanan, promosi, tingkat bunga pinjaman terhadap
loyalitas debitur pada bank konvensional di Surabaya. Populasi penelitian adalah survey
/sampling pada debitur bank konvensional. Dengan menggunakan penggolahan data debitur bank konvensional atas sampel 112 responden. Model uji dengan menggunakan software SPSS for Windows versi 20, analisis model uji validasi dan uji reliabilitas, melalui regresi linier berganda. Persamaan regresi tersebut harus bersifat BLUE (Best Linier Unlimited Estimator) dengan asumsi antara lain: normalitas, multikolinieritas dan autokorelasimetode sampling dengan non-probabilitas dalam judgment sampling dan bantuan software Amos 22. Hasil pengujian Normalitas dilihat grafik normal probability plot yang membandingkan distribusi normal. Jika data menyebar di sekitar garis diagonal dan mengikuti arah garis diagonal, maka kenormalan terpenuhi. Hasil analisa multikolinieritas dan autokorelasi dapat menunjukan dalam kisaran nilai yang diharapkan.Hasil penelitian menunjukkan bahwa variabel loyalitas debitur dan variabel keterlibatan seperti tingkat bunga pinjaman, kualitas
* Corresponding author, email address: [email protected]
layanan dan promosi menunjukan hasil positif. temuan penelitian lainnya adalah: Hasil dari penelitian ini adalah: 1). Dari hasil analisis yang di dapat dinyatakan bahwa Tingkat Bunga Pinjaman (X1) mempunyai pengaruh signifikan terhadap Loyalitas Debitur (Y) bank konvensional. Dengan demikian hipotesis satu (H1) yang menyatakan bahwa tingkat bunga pinjaman berpengaruh signifikan terhadap Loyalitas Debitur. 2). Dari hasil analisis yang di dapat dinyatakan Kualitas Layanan (X2) mempunyai pengaruh signifikan terhadap Loyalitas
Debitur (Y) bank konvensional. Dengan demikian hipotesis dua (H2) yang menyatakan
bahwa Kualitas Layanan berpengaruh signifikan terhadap Loyalitas Debitur diterima. 3).
Hasil analisis yang di dapat dinyatakan Promosi (X3) mempunyai pengaruh signifikan terhadap Loyalitas Debitur (Y) bank konvensional. Dengan demikian hipotesis tiga (H3) yang menyatakan bahwa Promosi berpengaruh signifikan terhadap Loyalitas Debitur diterima.
Kata kunci: tingkat bunga pinjaman, kualitas layanan, promosi, loyalitas debitur
1.INTRODUCTION the understanding of customers that 1) Customers are people or The main goal of the company achieves / increase organizations that interact with products, services, or are end profits through the sale of products that are published / issued users. 2) A customer or channel is a person or organization that to provide corporate profits, this is done so that the company buys or handles products or services, usually other intermediary satisfies the debtor, so that the company's performance users. 3) Customers or internal processes are part of the increase, company profits increases. With large profits, the company's process chain that provides products or services to company's capital increases and the company is able to grow external customers. 4) The customer is said to be loyal if the and develop by using greater capabilities. Thus the company is customer shows a regular buying behavior or there is a condition able to provide a greater level of satisfaction to the Debtor and where the customer must buy at least twice in a specified time strengthen the overall economic condition. This can be said that interval. the level of profits obtained by the company is an indicator of In addition to the service quality of the company must the success of the company's business that has succeeded in also pay attention to the quality of the products offered. The providing satisfaction to the debtor. In providing debtor ability of the product to provide the best service to the wearer can satisfaction, the company can prepare adequate needs / strengthen the product's position in the consumer, thus enabling services, debtor needs with superior and reasonable quality. To the product to be the primary choice of consumers / debtors in the achieve targets and high business performance, companies future. With a good product and good service quality allows need marketing concepts and strategies so that debtor debtor satisfaction, which can attract new debtors, so that it is satisfaction can be created, which in turn can bring debtor expected to ultimately create customer loyalty. loyalty. With debtor satisfaction formed and can provide A good level of customer / debtor satisfaction reflects quality services, where service quality has a close relationship on the company's success in releasing products, because the with debtor satisfaction. The quality gives encouragement to product is useless if the product does not provide satisfaction for consumers / debtors to form a strong bond between debtor / its users. So it is hoped that the company can always try to create customer and the company. Thus companies / banks can good products / services in accordance with consumer needs so increase debtor satisfaction by minimizing unpleasant that the debtor is expected to feel satisfied. experiences. Furthermore, in the economy in general, the Benefits of debtor / customer satisfaction have a positive economy can grow well and stable if supported by financial impact on company performance which ultimately provide profits institutions that are brave and able to facilitate the needs of the for the company according to Fandy Tjiptono & Anastasia Diana community related to financial assets. According to Yoyo (2015: 7-11) there is a realization of customer decisions that have Sudaryo and Yudanegara (2017: 20) financial institutions are the potential to provide a number of key benefits including: 1) intermediary institutions from parties who have excess funds Response towards a low-cost producer strategy. Low prices that (surplus of funds) with those who lack funds (lock of funds) are based on discount aspects without accompanied by cost which have the function as intermediaries for public finance. efficiency have the potential to sacrifice quality standards that are Bank is as a part of financial institutions that has a major actually the rights of consumers. Low cost must not sacrifice role for national economic development. Public trust in banks product quality. 2) The economic benefits of customer retention is the basis and the main element that must be increased to over continuous customer selection. Maintaining & satisfying support economic growth. Economic growth is good if the current customers is cheaper compared to constantly prospecting condition of banks in the country is in good condition. Banks new customers. 3) Customer Lifetime Value. That customer have the main function of collecting and distributing funds to loyalty to the company's products and services over a period of the public so that there is equity, economic growth and national time show the result in a greater income annuity for the company. stability that leads to people's welfare. “Banks are a vehicle 4) Gethok tular (promotion by mouth to mouth) as the persuasive capable of collecting and channeling public funds effectively power. In the service industry the opinions / opinions of friends and efficiently towards improving people's living standards and family are far better and credible than advertising, customers who are willing to recommend products and services through (Totok Budisantoso, Nuritomo, 2013: 10)”. Facebook, Instagram and Twitter are very potential in marketing According to Harvey Thomson (2000) in the book Lili the company's products / services. 5) Reducing price sensitivity. Adi Wibowo & Donni Juni Priansa (2017: 24) states related to
29
Customers who are satisfied and loyal to the company tend to According to Rahmat Firdaus and Arianti Maya (2011: 101), bargain less frequently in making these purchases because the interest is a form of income for money owners who because of trust factor (trust) has been formed. 6) Customer satisfaction as their sacrifice for a certain time to release the opportunity not to an indicator of future business success. Customer satisfaction use the money because it is used by other parties. Kasmir (2014: is a long-term strategy, because it takes a long time before 114), said interest rates are remuneration provided by banks based building and gaining a reputation for the excellent service. on conventional principles to debtors who buy or sell their products Interest rates on third party funds affect the loan interest 2. THEORETICAL FRAMEWORK AND rate. According to Kasmir (2014: 155-158), the determination of HYPOTHESES loan interest rates is influenced by several factors including: Quality of service Funding requirements, if the bank is short of funds the demand The quality of service provides encouragement for for loans increases, the bank increases the interest rates on savings customers to provide satisfaction and trust in consumers. In the / deposits to be able to meet these funds. With an increase in long run this kind of bond allows the company to understand interest rates, loan interest rates can also rise. However, if the the expectations and needs of customers. The needs with the available funds are large and the demand for loans is small, the taste and subjective value of these customers over a long period deposit interest decreases. of time influence the company in facing competitive and Related to pricing, banks have business objectives for globalized business competition. The company continues to the bank, according to Tatik Suryani (2017: 139-140) there are make improvements in service activities, service operations or five objectives in setting prices, among others. 1) Increase income product innovation to always improve quality so that the needs from main products (savings and credit) Banks generally have of customers / debtors can always be met. According to Nina mainstay mainstay products that contribute directly to income. If Rahmayanti (2010: 12) there are advantages related to good the goal is to increase income from savings and credit, then these service and there are also disadvantages related to poor quality, two products should really get special attention regarding price among others, Advantages of good service quality include 1) placement. 2) Increase income from fee base income. The amount Revenue from sales is higher. 2) Higher production costs. 3) of savings that is successfully hinpum by the bank is an important Profitability and growth increase. While the loss of poor service component to support the availability of credit products on offer. quality includes: 1) Lost business. 2) Liability judgment If the bank's goal is to focus more on savings and credit products, (lawsuits) of the company sued by the customer for damage or the amount of savings and credit interest, then the amount of accident due to the use of products or services. 3) Loss of savings and credit interest and other costs associated with these productivity of low-quality materials, obsolete machinery, products need to be carefully considered in order to remain inefficient processes, and so worker productivity drops / competitive / compete with other bank products. 3). To prevent disappears. 4) Cost, the costs increase to improve quality, and competitors from entering or having difficulty competing. The others. In a study conducted by Khurana (2014) in the book Bank's orientation in business is also to prevent or prevent Tatik Suryani (2017: 193) shows that the quality of service competitors from surpassing their current position, so banks perceived by customers has a significant effect on customer should actively seek information regarding competitive prices / satisfaction. While a study conducted by Mittal and R.Gera interest. 4). Providing satisfaction to the Customer, the Bank in (2013) in the book Tatik Syriac (2017: 193) reveals that setting the price of the objective is to provide satisfaction to the customers who are dissatisfied with the services received easily customer, the Bank needs to make an effort to find out the move to other banks or stay afloat but only become inactive customer's expectations about the expected price and value as customers. Quality is often associated with products or well as find other information such as surveys or other activities services, processes and the environment and humans. The in order to find out the customer's expectations. 5) Build the quality of relationships including human services, processes image. Pricing is often associated with the efforts of banks to and environment always changes. The quality of service is said build a certain image, for example, banks set lower prices on to be satisfactory quality, if service exceeds expectations, then certain groups of people such as Micro, Small & Medium service quality is interpreted as ideal quality. Service quality is Enterprises (MSMEs) with the aim of building an image of banks' influenced by the ability of service providers (services) to alignments to Small and Medium Enterprises. consistently meet customer expectations. Quality of service is abstract and difficult to understand. According to Fandy Promotion Tjiptono (2015: 43) relates to the satisfaction felt by customers According to Nana Herdiana Abdurahman (2015: 156) / debtors will have a significant impact on a number of aspects said that promotion is one of the marketing mix used to notify, including, 1) Repurchase intention, Satisfied customers tend to persuade, and remind about company products. According to be interested in repurchasing the same product / service. 2) Kotler and Keller in Nana Herdiana Abdurahman's book (2015: Customer loyalty, The satisfaction felt by the customer / debtor 156) defines marketing mix as follows marketing communication of the product / service has a positive impact on the positive is a specific combination of advertising, sales promotion, public creation of loyalty. 3) Complaints behavior. Customers who are relations, personal sales and direct marketing that companies use dissatisfied can pass complaints, customers who complain to communicate customer value in a positive way and build when handled properly and satisfactorily can turn around, from customer relationships. According to Nana Herdiana disappointed to satisfied and loyal. Abdurahman (2015: 156-157), related to the promotion / communication mix this marketing consists of the following Loan Interest Rate items: 1) Advertising. All forms of non-personal presentations Interest is a monetary instrument used in determining and promotions, ideas, goods or services are paid for by certain conventional monetary policy expressed as a percentage. sponsors. 2) Sales promotion, which is a short-term incentive to
30 encourage the purchase or sale of products or services. 3) testing (testing hypothesis). Hypothesis testing results in Public relations. That is to build good relationships with conclusions to reject or accept hypotheses. The hypotheses in this various groups to get the desired publicity, build a good research were :H1 = There was a positive and significant corporate image. 4) Personal selling, namely personal influence of the debtor's perception about the loan interest rate on presentation by company sales people for the purpose of the debtors loyalty of conventional bank in SurabayaH2 = There generating sales and for building relationships with customers. was a positive and significant influence of debtor's perception 5) Direct marketing, namely direct relationships with about service quality on the loyalty of conventional bank debtors individual consumers that are carefully targeted to get an in SurabayaH3 = There was a positive and significant influence immediate response and build direct customers. of the debtor's perception about the promotion of the loyalty of Debtor Loyalty conventional bank debtors in SurabayaH4 = There was a positive The concept of loyalty according to Sudaryono (2016: and significant influence of debtor's perception about interest 81) consumer loyalty is divided into two groups, namely brand rates, service quality and promotion (simultaneously) on the loyalty and store loyalty, customers / consumers who are debtor loyalty of conventional bank in Surabaya. satisfied with the product or brand consumed can buy reset the 3. RESEARCH METHOD product.Continuous and repeated purchases of the same In this research explaining the causal relationship product and brand show loyalty to the brand, this is what the between variables through hypothesis testing. By taking a product / service provider wants. During this time customer survey of 112 debtors in the scope of research on conventional loyalty is often associated with repurchase behavior. In the bank debtors located in Surabaya. context of the brand, loyalty reflects a psychological commitment to a particular brand; whereas repurchase Population and Technical Sampling behavior solely concerns the purchase of the same particular Suharsimi Arikunto (2013: 173) states that the population is the brand repeatedly (it is because it is indeed the only brand that entire subject of research. Meanwhile according to Sugiyono is available, the cheapest, and so on). In principle, the concept (2017: 80) Population is a generalization area consisting of of customer loyalty applies to brands, services, organizations objects / subjects who have certain quantities and characteristics and activities (Fandy Tjiptono & G.Chandra 2012: 80). Fandy determined by researchers to be studied then draw conclusions. Tjiptono & G. Chandra (2012: 83) identified four possible While the population in this research was the Bank's borrowing situations of loyalty based on the dimensions of attitudes and debtors. While the sample In the opinion of Sugiyono (2017: 81) repurchase behavior. 1) No loyalty, i.e. if the customer's that the sample is part of the number and characteristics possessed repurchase attitudes and behaviors are equally weak. The by the population. Population representatives are studied by reason for new products / services being introduced is not yet Roscoe in Sugiyono's book (2017: 91) suggests that sample sizes known; marketers are not able to communicate the unique greater than 30 and smaller than 500 are suitable for most studies. advantages of their products; and consumers perceive all If the sample must be divided into sub-samples (male / brands as relatively similar in performance. 2) Spurious loyalty female, children / adolescents, etc.), then a minimum sample size (captive loyalty), i.e. if a relatively weak attitude is of 30 for each category is required.Random sampling was done accompanied by a strong repurchase pattern. The reason is the by taking a sample that is in accordance with the random or region factor of familiarity or discrete factors. 3) Latent loyalty and this technique is done because of the consideration of the reflected when a strong attitude is accompanied by a weak limitations of time, energy and funds so that it cannot take large repurchase pattern. 4) Loyalty, which the customer's decision and distant samples. In this research, the samples of 112 debtors to be loyal or not loyal is the accumulation of many small from conventional banks in Surabaya were given a questionnaire. problems in the company. Distributing questionnaires / questionnaires to respondents, with Framework the following criteria for respondents: a. Name b. Address Loan Interest c. Gender Rates d. Age of respondents 21-65 years e. Education f. Conventional bank debtors g. Related statements: Quality of Debtor - Loan interest Service Loyalty - Service quality - Promotion - Loyalty
Promotion Research Instruments According Suharsimi Arikunto (2013: 211), In research the research instrument has an important role related to the successes and failures of the research, because the data described the variables examined and function as a means of proving a Research Model hypothesis therefore it was true whether or not the data greatly Research Hypothesis determined the quality the results of the research whereas whether The hypothesis is a temporary statement that still needs or not the data depends on both whether or not a data collection to be tested for its truth. Hypothesis truth is used hypothesis instrument. A good instrument has to fulfill two requirements: 1).
31
Validity is a measure that shows the levels of validity or reliability coefficient measuring instrument approaching number transferability according to the instrument. 2). Reliability is one indicates higher reliability. If the alpha coefficient (α) is reliability or trustworthiness; the instrument can be trusted to greater than 0.60 then the measuring instrument is considered be used as a data collection tool and produce data that can be reliable or there is internal consistency reliability, and vice versa trusted, not tendentious which leads to certain answers. if the alpha coefficient (α) is smaller than 0.60 then it is Furthermore, the lattices in this study are as follows: considered less reliable or there are internal inconsistency In this research, the research instruments used were as reliability. Provide criteria in interpreting the reliability index as follows: follows: - Loan Interest Rate (X1) a. Affordability of flowers b. Compliance with benefits Table of Reliability Index and its Interpretation c. Product competitiveness d. Compliance with product quality. Coefficient interval Coefficient interval e. The amount of interest on the loan charged. 0,00 - 0,199 Very low - Service Quality (X2) 0,20- 0,399 Low a. Direct evidence (tangibles) b. Reliability 0.40- 0,599 Moderat c. Responsiveness d. Guarantee 0,60- 0,799 High e. Empathy 0,80 - 1,000 Very high - Promotion (X3)
a. Advertising b. Personal selling Source: Sugiono, (2017: 184) c. Sales promotion d. Special interest rate Data Analysis Techniques e. Publicity (public relations) Classical Assumption Test on MRA The classic assumption test in Multiple Regression Analysis - Debtor Loyalty (Y) (MRA) is a multivariate analysis tool that is used to test whether a. Interest (customer satisfaction) the MRA model formed contains symptoms of Multicollinearity, b. Loyalty Autocorrelation and Heteroscedasticity that there is the test must c. Recommend be done as follow .(Iramani,Luciana,Yudi S,2016:57-64): d. Always use the product (createdtrust) a. Normality test e. Positive commitment (providing good service) Normality test is to see whether the residual value is normally distributed or not, a good regression model can Validity and Reliability have a residual value that is normally distributed. Validity test b. Multicollinearity Test Validity testing aims to test or measure the validity of Multicollinearity test is to see whether there is a high the questionnaire on the indicators used. Validity shows the correlation between independent variables in a multiple extent of accuracy as a measure of variables from an actual linear regression model. concept. Measurement of the level of validity in this study used c. Heteroskedastisitas Test the product moment correlation formula, which was processed Heteroskedastisitas Test is to see whether there is using the SPSS Program. The validity testing criteria with this unsimilarity of variant in residual one to observation to instrument are if r_count> r_tabel then the data is said to be another one valid, and if on the contrary the data is said to be invalid. d. Autocorrelation Test According to Suharsmi Arikunto (2013: 194), "Questionnaires Autocorrelation test is to see whether there is a are a number of written questions used to obtain information correlation between a period t with the previous period from respondents in the sense of reports about their (t-1). personalities, or other things that are known. A questionnaire is said to be valid if the question in a questionnaire is able to Multiple Linear Regression Analysis express something that is measured by the questionnaire. While The analytical tool used in this research used the a questionnaire is said to be reliable if a person's answers to multiple linear regression analysis, where this analysis predicted questions are consistent from time to time. the independent variable was increased or derived: The general equation of multiple regression analysis was as follows: Reliability Test
Reliability Test is a reliability test that aims to find out Y = a + b X + b X + b X + e how far a measuring instrument can be relied on or trusted. 1 1 2 2 3 3 Reliability relates to the estimation of the extent to which a Information: measuring instrument is seen from internal stability or Y = Debtor loyalty consistency and information, answers or statements, if A = constant coefficient measurements are made or observations are repeated. A
32 b1 = multiple regression coefficient between X1 and Y The reliability test is carried out to determine the b2 = multiple regression coefficient between X2 and Y consistency of whether the measuring instrument can be trusted b3 = multiple regression coefficient between X3 and Y or not. X1 = Customer Perception about Interest Rates Measuring instruments have high reliability if in several times the X2 = Customer Perception about Promotion measurement of the same group of subjects obtained relatively X3 = Customer Perception about Service Quality consistent results. Reliability tests were performed with Cronbach e = error coefficient alpha coefficients. According to Sugiyono (2002: 109) "Item measurement is said to be reliable if the coefficient is greater than Reliability Test Result and Data Validity 0.6". The results of the reliability data processing were in the Validity test is a test of the degree of accuracy of appendix. Summary presented. research measuring instruments about the actual contents of which be measured. Item validity test analysis aimed to test whether each item was really valid or at least we can determine Reliability Test a high degree of closeness of the data obtained with what we believed in these measurements. As a measuring tool used, the Dimension Reliability validity test analysis was done by correlating the score of items Information with the total score of items. The complete validity test results Loan interest rate Reliable were in the table below: 0.843 (X1)
Service Quality ( X2) 0.836 Reliabel Uji Validitas Promotion Dimension Reliabel 0.864 Variabl Correlati Correlati ( X3) e on on Informati Debtor Loyalty (Y) 0.759 Reliabel (criteri Coefficien Coefficien on Source: attachment of SPSS data processing results a) t (rcount) t Loan Interest Rate (X1) From the SPPS calculation results it was able tobe seen that each X1.1 0,772 Valid Item variable gave a Cronbach alpha value above 0.759. Cronbach's X1.2 0,873 Valid Item alpha value was clearly above the minimum limit of 0.600, so it X1.3 0,855 0.174 Valid Item was able tobe concluded measurement scale from the dimensions X1.4 0,840 Valid Item of the loan interest rate (X1), service quality (X2), promotion (X3), X1.5 0,539 Valid Item Debtor Loyalty (Y) has good reliability. Service Quality (X2) X2.1 0,688 Valid Item 4. DATA ANALYSIS AND DISCUSSION X 0,784 Valid Item 2.2 The research data consisted of basic data that had a direct X 0,789 0.174 Valid Item 2.3 relationship with the research variables. The results of the X 0,856 Valid Item 2.4 analysis of research data obtained by researchers are the results X2.5 0,808 Valid Item of research that were directly related to the research variables, Promotion (X3) both the independent variable and the dependent variable. Based X3.1 0,818 Valid Item on the research results obtained, are as follows: X3.2 0,832 Valid Item Based on the research results obtained, are as follows: X3.3 0,835 0.174 Valid Item a. Loan Interest Rate (X1) X3.4 0,787 Valid Item b. Quality of service (X2) X3.5 0,787 Valid Item c. Promotion (X3) Debtor Loyalty (Y) d. Debtor Loyalty (Y) Y1.1 0,829 Valid Item The variables in this research were measured using a Y1.2 0,706 Valid Item Likert Scale, a scale used to measure the responses of respondents Y1.3 0,799 0.174 Valid Item regarding the object of research with a weighting of one to five. Y1.4 0,724 Valid Item For this reason, a class interval table was created which aims to Y1.5 0,503 Valid Item calculate the value or answer score filled by the respondent. Source: attachment of SPSS data processing results Highest Value - Lowest Value In this case the validity of the question variables for Class interval = ------each servqual dimension was said to be valid if the correlation Number of Classes (r count) was positive and r count> r table. The value of r table 5 -1 for n = 112 with a significance of 5% is 0.174. From the results = ------= 0,8 above, it can be seen that the count of each question was greater 5 than the value of rtable. Thus it can be concluded that each question contained in the questionnaire can be understood well Interval Class by respondents, or it can be said that the data obtained is valid. Interval Value Category Value
4,20 < x 5,00 Strongly agree 5 Reliability Test 3,40 < x 4,20 Agree 4 2,60 < x 3,40 Neutral 3
33
1,80 < x 2,60 Disagree 2 respondents who were customers of conventional banks. Based 1,00 < x 1,80 Strongly disagree 1 on the answers to the questionnaires filled out by respondents Source: attachment regarding Service Quality of conventional banks, it was presented Respondents' Responses to Loan Interest Rates ( X1) in the table below as follows: To find out about respondents' answers to loan interest rates, the researcher distributed questionnaires to 112 respondents Respondents' Answers To Service Quality ( X2) Varia Score Mea who were customers of conventional banks. Based on the Category answers to the questionnaire filled out by respondents ble 1 2 3 4 5 n regarding the loan interest rate, it was presented in the table X2.1 - 4 1 65 42 4,29 Strongly agree below as follows X2.2 - 1 3 60 48 4,38 Strongly agree X2.3 - - 11 62 39 4,25 Strongly agree X2.4 - 4 6 59 43 4,25 Strongly agree X2.5 1 7 11 42 51 4,21 Strongly agree Mean Total 4,28 Strongly agree Respondents' Answers against Loan Interest Rate (X2) Source: processed data Varia Score Categor Mean ble 1 2 3 4 5 y From the above table, in question no.1 about the X1.1 5 7 10 55 35 3,96 Agree appearance of attractive bank employees in providing services in X1.2 3 10 12 51 36 3,95 Agree the bank loan process showed an average value of 4.29, it was X1.3 3 7 12 58 32 3,97 Agree stated that the majority of respondents expressed strongly agree, X1.4 1 12 12 52 35 3,96 Agree because most respondents stated the appearance of bank X1.5 - 2 3 48 59 4,46 Agree employees interesting in providing services in the bank loan Mean Total 4.,06 Agree process.In question no.2 about the bank infrastructure provided Source: processed data that was good shows an average value of 4.38, it was stated that most respondents strongly agree, because most respondents stated From the table above, in question no. 1 regarding the that the bank infrastructure provided was good. interest of loans given by banks in accordance with their ability For question no.3 about the questionnaire given by to show an average value of 3.96, it was stated that most of the banks in the credit process aimed at improving services showing respondents agreed, because most respondents stated that the an average value of 4.25, it can be stated that most respondents interest of loans given by banks was in accordance with my strongly agree, because most respondents stated the questionnaire ability. given by banks in the credit process aimed at increasing service. For question no. 2 concerning the interest of loans Then question no.4 about bank staff gives confidence given by banks in accordance with the benefits received related to the timeliness of service in the credit process shows an showed an average value of 3.95, it was stated that most average value of 4.25, it can be stated that the majority of respondents agreed, because most respondents stated that the respondents expressed strongly agree, because most respondents loan interest provided by banks in accordance with the benefits said bank staff gave confidence related to the timeliness of I received. services in the credit process. Next to question no. 3 concerning the interest of bank In question no.5 about bank staff caring / understanding loans offered competitively against other banks shows an what the researcher want to show an average value of 4.21, it was average value of 3.97, it was stated that most respondents stated that most respondents strongly agree, because most agreed, because most respondents stated that the interest on respondents said bank staff cared / understood what I wanted. bank loans offered to me was competitive against other banks. So overall the respondents stated agree on Service In question no. 4 concerning bank loan interest Quality (X2) with indicated a total mean value of 4.28 which was charged in accordance with the quality of bank products shows in the category of strongly agree. This was due to the Service an average value of 3.96, it was stated that most respondents Quality of conventional banks that are in line with what strongly agree, because most respondents stated that the bank consumers expect. loan interest charged is in accordance with the quality of bank products. For question no. 5 about the amount of bank loan Respondents' Answers on Service Quality (X2) interest is the most important factor in determining the choice To find out the answers of respondents to the Promotion, of credit products shows an average value of 4.46, it was stated the researcher distribute questionnaires to 112 respondents who that most respondents agree, because most respondents stated become conventional bank debtors. Based on the answers to the the amount of bank loan interest is a factormost important for questionnaires filled out by respondents regarding conventional me in determining the choice of credit products. bank promotions, it will be presented in the table below as follows So overall the correspondent stated agree on the Respondents' Answers on Promotion (X3) conventional bank loan interest rate (X1) with the indicated Variab Score mean total value of 4.06 in the agreed category. This was due Mean Category to conventional bank loan interest rates were in accordance le 1 2 3 4 5 with what was expected by consumers. X3.1 - 6 5 64 37 4,18 Agree X3.2 - 2 8 66 36 4,21 Strongly Agree Agree Service Quality Variable Description (X2) X3.3 1 9 17 49 36 3,98 To find out the answers of respondents to Service X3.4 - 7 10 53 42 4,16 Agree Quality, the researcher distributed the questionnaires to 112 X.3.5 - 1 10 56 45 4,29 Strongly Agree
34
Mean Total 4,16 Agree agreed, because most respondents said that the respondent did not Agree Source: processed data move to another bank even though I got a loan offer . Next to question no.3 about recommending others for a From the above table, in question no.1 about the explanation of bank loan product that the respondent used as an alternative bank loan products through the media clearly showed an option showed an average value of 4.02, then it was stated that average value of 4.18, it was stated that most respondents most respondents agreed, because in part A large number of agreed, because most respondents stated the explanation of respondents stated that the respondents recommend others to bank loan products through the media clearly.Question no.2 bank loan products that I use as an alternative option. For question about promotions offered by attractive banks shows an average no.4 about still choosing a particular bank to borrow money value of 4.21, it was stated that most respondents strongly because it made it easy in the loan process to show an average agree, because most respondents stated that promotions offered value of 4.18, it was stated that the majority of respondents by banks were attractive. agreed, because most respondents said I still chose a particular Question no.3 about the promotion offered by the bank bank to borrow money because it made easier in the loan process. encouraging me to use the bank's credit facility showed an Then in question no.5 about routinely paying the bank loan average value of 3.98, it was stated that most of the respondents interest bills showed an average value of 4.38, then it was stated agreed, because most respondents said the promotion offered that most of the respondents expressed strongly agree, because by the bank encouraged the respondent to use a bank credit most respondents stated that the respondnt routinely paid the bank facility. loan interest bills. Then overall the respondents agreed to the Question no.4 about the special interest offer of bank Debtor Loyalty (Y) with the indicated mean total value of 4.02 at loans during promotion showed an average value of 4.16, it was category agree. This was due to Debtor Loyalty is good enough. stated that most respondents agreed, because most respondents stated the special interest offer of bank loans when the 5 CONCLUSION, IMPLICATION, SUGGESTION, promotion attracted me. AND LIMITATIONS Next to question no.5 about the promotion of bank The research results obtained, the main data consists of loan products conducted with professionals shows an average research data that were directly related to the independent value of 4.29, then it was stated that most of the respondents variables and the dependent variable as below: agreed, because most respondents stated that the promotion of Classical Assumptions. bank loan products was done professionally. Based on the description above, the researcher testes the Overall, the correspondent agreed to the Promotion (X3) with influence of loan interest rates, service quality, and promotion of the indicated mean total of 4.16 in the agreed category. This consumer debtor loyalty on notebook cases in Surabaya. was due to the way conventional bank promotions were in Considering that the analysis was very broad in scope, the accordance with what consumers expected. researcher limited the analysis of Loan Interest Rates (X1), Service Quality (X2), Promotion (X3), Debtor Loyalty (Y) of Description of Debtor Loyalty Variable (Y) conventional bank debtors through multiple linear regression. To find out the answers of respondents to the Debtor Loyalty, The regression equation must be BLUE (Best Linear Unlimited the researcher distributed questionnaires to 112 respondents Estimator), meaning that the Loyalty of the F Test Debtor and the who became conventional bank debtors. Based on the answers T Test cannot be biased.To produce a decision that is BLUE (Best to the questionnaire filled out by respondents regarding Debtor Linear Unlimited Estimator), it must be fulfilled, including basic Loyalty, it was presented in the table below assumptions that should not be violated by simple linear regression, namely: Respondents' Answers on Debtor Loyalty (Y) 1. Normality Varia Score Me One way to look at residual normality looked at a Category ble 1 2 3 4 5 an normal probability plot graph comparing the Y1.1 1 13 19 51 28 3,82 Agree cumulative distribution of the normal distribution. If the Y1.2 2 15 20 52 23 3,71 Agree data spread around the diagonal line and followed the Y1.3 1 4 19 56 32 4,02 Agree direction of the diagonal line, then the normality Y1.4 - 4 5 70 33 4,18 Agree assumption was fulfilled. The test results can be seen in Y1.5 Strongly the figure below: - - 1 67 44 4,38 Agree Mean Total 4,02 Agree Source: processed data Normal P-P Plot of Regression Standardized Residual From the table above, in question no.1 about credit products provided by banks was a product that often used that showed an average value of 3.82, it was stated that most respondents agreed, because most respondents stated that credit products provided by banks is a product that the respondent was accustomed to use. In question no.2 about the researcher not moving to another bank even though getting a loan offer showed an average value of 3.71, it was stated that most respondents
35
determine the level of significance of the dependent variable. The results obtained from the analysis using SPSS can be seen in the table below:
Results of Multiple Linear Regression Analysis Coefficientsa Unstandardized Standardized Coefficients Coefficients Model B Std. Error Beta (Constant) 2.966 1.346
X1 .223 .065 .279 1 X2 .211 .099 .201
X3 .389 .083 .416 a. Dependent Variable: y Gambar 4.4 Source: processed data Data Normality Test Results From the regression results obtained, the equation of regression was made as follows:
Y = a + b X + b X + b X + e 2. Multicollinearity 1 1 2 2 3 3 In the results of data analysis obtained through the Y = 2,966 + 0,223X1 + 0,211X2 + 0,389X3 + 1,346 classic assumption test with using test sub-items The regression coefficient a (alpha) had a value of 2.966; multicollinearity can be known through the table as this showed that if a (alpha) had increased by one unit, the Debtor follows: Loyalty (Y) of conventional bank debtors increased by 2.966. Multicollinearity Test Results The regression coefficient of Loan Interest Rate (X1) had a value of 0.223, this showed that if the Loan Interest Rate Coeficiens (a) (X1) variable increased by one unit, the Debtor Loyalty (Y) of Collinearity Statistics conventional bank debtors increased by 0.223. Variable The regression coefficient of Service Quality (X2) had a Tolerance VIF value of 0.211, this showed that if the Service Quality (X2) variable has increased by one unit, the Debtor Loyalty (Y) of Loan Interest Rates .519 1.927 conventional bank debtors increased by 0.211. Quality of Service .383 2.613 Promotion regression coefficient (X3) had a value of 0.389, this showed that if the variable Promotion (X3) had Promotion .428 2.334 increased by one unit, the Debtor Loyalty (Y) conventional bank a. Dependent Variable: Value of Perh debtors experienced a increased of 0.389. Source: processed data The regression coefficient e (error) has a value of 1.346, Based on the multicollinearity test results shown in the this showed that if e (error) had increased by one unit,the Debtor Loyalty (Y) of conventional bank debtors increased by 1.346. appendix, it showed that the value of tolerance> 0.10
and VIF value <10, then of all variables had fulfilled Results of Regression Determination Analysis the criteria, so it was concluded that there were no The coefficient of determination (R2) in the research used symptoms of multicollinearity in the regression model to measure and identify how strong the influence of the loan used. interest rate, service quality, and promotion had a positive effect on the Debtor Loyalty (Y) of conventional bank debtors. For more 3. Autocorrelation details can be seen in table 4.3 below:
On the results of data analysis obtained through
testing the classic assumptions about autocorrelation Determination Coefficient Analysis Results (R2) can be seen through the table as following: Summary Model R Std. Error of Model R Square Adjusted R Square the Estimate Regress Analysis Results 1 .795a .633 .623 1.790
Based on the results of calculations that had been obtained a. Predictors: (Constant), X1, X2, X3 using the SPSS 20 FOR WINDOWS program, the following Source: processed data data are obtained: From the results of multiple linear regression analysis to be calculated to determine the standard value of the Based on the results of calculations with the help of the SPSS regression coefficient owned by the independent variable to program that can be seen the R2 obtained was 0.633 or 63.3%. This figure meant that conventional bank Debtor Loyalty is
36
influenced by Loan Interest Rate (X1), Service Quality (X2), Ho: β 1 = β2 = β 3 = 0 and Promotion (X3) factors by 63.3%, while the remaining This meant that the Loan Interest Rate (X1), Service Quality (X2), 36.7% was influenced by factors or variables others outside this Promotion Dimension (X3), had no partial effect on Debtor researcher. Loyalty (Y).H1: β 1 ≠ β2 ≠ β 3 ≠ 0This meant that the Loan Interest Rate (X1), Service Quality (X2), and Promotion (X3) had Hypothesis testing a partial effect on Debtor Loyalty (Y). In testing the hypothesis of this research carried out by In this regard, the t test was used to look at the effect of the means of testing both simultaneously (F test) and partially (t independent variables on the dependent variable partially, where test): if the t-count value was greater than the table then the model used 1.Test F was fit or good. The criteria for accepting and rejecting To find out whether the independent variable, namely the Loan hypotheses with a significance level of 0.05 are as follows: Interest Rate (X1), Service Quality (X2), Promotion (X3), has a If tsig <0.05, then variable X has a significant effect on variable Y, significant influence on the dependent variable, namely the on the contrary, tsig. > 0.05 then the variable X does not have a Debtor Loyalty (Y) of conventional banks, the F test was tested. significant effect on the variable Y. With the SPSS program compared with the significance level T test results for the independent variable bound can be seen the provisions of 0.05. results in the following table: With the following sequence of steps: H1 : β 1 ≠ β2 ≠ β 3 ≠ 0 This meant that the Loan Interest Rate (X1), Service Quality Test Analysis t (X2), Promotion (X3), did not have a simultaneous effect on Coefficientsa Debtor Loyalty (Y). Standardiz In this regard, the F-Test used to see the effect of the ed independent variables on the dependent variable Unstandardized Coefficient simultaneously, where if the value of Fcount was greater than Coefficients s Ftable, the model used is fit or good. Criteria for acceptance and rejection of hypotheses with significant level was 0,05 as Model B Std. Error Beta T Sig. followed : 1 (Consta 2.96 1.346 2.203 .030 If Fsig. <0.05, the variable X had a significant effect on variabel nt) 6 Y, on the contrary, Fsig. > 0.05 then the variable X did not have X1 .223 .065 .279 3.446 .001 a significant effect on the variable Y. X2 .211 .099 .201 2.127 .036 The test results of the F Loan Interest Rate (X1), Service Quality (X2), and Promotion (X3) of Debtor Loyalty (Y) of X3 .389 .083 .416 4.674 .000 conventional banks can be seen in the following table: a. Dependent Variable: y Test Analysis F Source: processed data b ANOVA Sum of Mean From the above table it can be explained as follows: Model Squares df Square F Sig. 1. With the tvalue of the Loan Interest Rate ( X1) of 3,446 greater Regression 62.03 .000 596.519 3 198.840 than the ttable level specified 1.659, it can be explained that the 1 b variable Loan Interest Rate (X1) had a significant influenced Residual 346.195 108 3.206 on the Debtor Loyalty (Y) of conventional banks. 2. With the service quality tcount (X ) value of 2.127 greater than Total 942.714 111 2 the ttable level determined 1.659, it was explained that the a. Predictors: (Constant), X1, X2, X3 variable Service Quality (X2) had a significant influence on b. Dependent Variable: Y the Debtor Loyalty (Y) of conventional banks Source: processed data .3 With the value of the tcount Promotion (X3) of 4.674 is greater than the ttable level determined 1.659, it was explained that the Distribution of data for independent variables with a Promotion variable (X3) had a significant influence on the significance value of the F test of 0,000 smaller than the level Debtor Loyalty (Y) of conventional banks. of significance that had been determined 0.05, then it was concluded that the independent variable (X) had a simultaneous Discussion result. influence on the Debtor Loyalty (Y) of conventional banks. In connection with the results of the analysis that had been done, the discussion that can be explained is as follows: 1. Test t 1. With a significance value of the Loan Interest Rate (X1) of Partial testing (t test) in this research determined the 0.001 which was smaller than the significance level criterion effect of the independent variable on Loan Interest Rate (X1), that had been set at 0.05, it can be concluded that the Loan Service Quality (X2), and Promotion (X3) on Debtor Loyalty Interest Rate variable (X2) had a significant influence on the (Y) of conventional banks. Debtor Loyalty (Y) of conventional banks. In t-test this test was carried out through the calculation of the 2. With a significance value of Service Quality (X2) of 0.036 SPSS program to see the significance value that was compared smaller than the criterion level of significance that had been with the level of significance value that has been determined at determined 0.05. So it can be concluded that the Service 0.05 (5%) with the following sequence of steps: Quality variable (X3) had a significant influence on the Debtor
37
Loyalty (Y) of conventional banks. stated that Service Quality had a significant effect on Debtor 3. With a significance value of Promotion (X3) of 0,000 less Loyalty was accepted. than the significance level criterion that had been set at 0.05, 3. From the analysis results which were stated Promotion (X3) it can be concluded that the Promotion variable (X3) had a had a significant influence on the Debtor Loyalty (Y) of significant influence on the Debtor Loyalty (Y) of conventional banks. Thus the third hypothesis (H3) which conventional banks. stated that Promotion had a significant effect on Debtor Loyalty was accepted.
Implications of Research Results. Suggestion. Related research results and their implications can be detailed Based on the conclusions made by the researcher and the results according to variables as follows: of the analysis obtained, several suggestions were made that was a. Loan interest rates where according to the respondent's used as a consideration for conventional bank debtors in solving answer there was an average answer of 4.06 meaning that existing problems. For this reason, the following suggestions can in the agreed category where interest was an important be explained: variable in relation to loyalty. 1. Interest Rates Loans provided by banks to debtors increased b. Quality of service, according to the results of respondents competition between banks so that it was expected can there was an average answer of 4.28 which meant included improve the quality of conventional banks in accordance in the category of strongly agree where service quality was with customer / debtor expectations. a very important variable in relation to loyalty. 2. Regarding the Quality of Service standardized by c. Promotion, according to respondents' answers, there was an conventional banks, it was expected that the customer / average answer of 4.16, which meant that in the category of debtor actually got the services that meet customer agree where interest was an important variable in relation to expectations. So that customers can enjoy more value from loyalty the services provided so that the bank concerned continues to d. Debtor loyalty, according to respondents' answers, there was maintain the quality of service for bank products. an average answer of 4.02, meaning that in the category of 3. Promotions conducted by banks to also pay attention to the agreeing where loyalty was an important variable media used so that a good bank image was maintained in the community By looking at the results of respondents, there was a very close 4. Debtor Loyalty was expected to be fulfilled so that bank relationship between loan interest rates, service quality and debtors can use bank products comfortably, without wanting promotion of the loyalty of conventional bank debtors, so as to move to other bank products. This condition indicated that banking practitioners must still focus on these variables to the quality of service for bank products was getting better. maintain the loyalty of debtors not to move to another bank. Improving the quality of bank product services was an Apart from the questionnaire related to the research variable, interbank challenge and was a critical point faced by also gave a general questionnaire which can also be described companies engaged in banking. If loyalty had already in detail as follows: occurred, it automatically increased the use of bank products a Regarding services, most respondents wanted to be and ultimately the company's revenue increased. specific in terms of the services provided by banks, namely
friendly, fast and solutive Limitation b. Tolerances that were recognized are related to This research has been attempted and carried out in accordance differencesgiving interest rates that the majority of with scientific procedures, however it still has limitations, respondents want a small interest difference between namely: conventional banks, from the results of respondents by - Factors that influence debtor loyalty in this study only 0.125% meant that the limit was still accepted (still loyal) consist of three variables, namely the perception of loan but if it was greater than the difference then the tendency interest rates, service quality and promotion, while there moved to another bank if there was no other factors also are many other factors that affect the loyalty of debtors determined in conventional banks. c Related to what media, so as to find out about banking - There are limitations to the study by using samples that products, from respondents surveyed, they can get it have been selected by researchers and not choosing other through television and the internet through friends. samples beyond the consideration of researchers.
Conclusion .From the results of research and discussion that researchers REFERENCES do, it was drawn a conclusion from the whole of this thesis as follows: 1. From the results of the analysis it was stated that the Loan Arikunto, Suharsimi. 2013, Prosedur Penelitian Suatu pendekatan praktek, Rineka Cipta, Jakarta Interest Rate (X1) had a significant influence on the Debtor Loyalty (Y) of conventional banks. Thus hypothesis one Anwar,Iful, Satrio,B (2015) Pengaruh Harga Dan kualitas (H1) which stated that the loan interest rate had a Produk Terhadap Keputusan Pembelian, Sekolah significant effect on Debtor Loyalty was accepted. Tinggi Ilmu Ekonomi (STIESIA) Surabaya. Jurnal 2. From the analysis results it was stated that Service Quality Ilmu dan managemen Vol.4 No.12, Desember 2015. Assauri, Sofjan. (2011). Manajemen Pemasaran. Jakarta: (X2) had a significant influence on the Debtor Loyalty (Y) of conventional banks. Thus hypothesis two (H2) which Rajawali Pers. Abdurrahman,Nana H. 2015, Manajemen Strategi Pemasaran dan
38
Pemasaran. Cetakan pertama, Bandung : Penerbit CV. Prima, Plus Analisa kasus Jasa RaharjaPenerbit : Pustaka Setia. PT.Gramedia Pustaka Utama, Jakarta. Budisantoso,Totok dan Nuritomo. 2013 Bank dan Lembaga Rahim Ajao,G. Iqnatius Ikechukwu,U.Adeoti Olusola Keuangan lain. Edisi:3 Jakarta : Salemba empat. E.(2012) Is Customer Satisfaction an of Customer Bungin, Burhan. 2011. Metodologi Penelitian Kuantitatif, edisi Loyalty. Australia Journal of Business and kedua Kencana Prenada Media Group, Jakarta. management Resech Vol.2 no.07, 14-20 Oktober Haryono,Budi, 2013, How to Manage Costumer Voice. 2012 ISSN 1839-0846. CV.Andi Offset Yogjakarta. Resita Widya,P, Suharyonno, Dahlan,F,(2015) Pengaruh Iramani,Luciana,Yudi,S, 2016 Statistika Bisnis Magister Kualitas Pelayanan Terhadap Kepuasan Dan Managemen STIE Perbanas, Surabaya. Loyalitas Pelanggan. Journal Administrasi Bisnis Ibojo,B,O (2015) Impact Of Customer Satifation on Vol.1, No.1 Januari 2015. Customer Loyalty : A Case Study of Reputable Riswanto Budiono J, Yohanes Sonang,K (2014) Pengaruh Bank in Oyo,Oyo State,Nigeria, Addministration Servise Quality Terhadap Loyalitas Pelanggan Departemen Faculty of Social and Managemen Dengan Customer Satisfaction Sebagai Variabel Scienes AjayiCrother University Oyo, Nigeria, Intervening Pada Ritil Bioskop The Premiere International Journal of Managerial Studies and Surabaya. Journal Management Pemasaran Petra Research (IJMSR) Vol.3 Issue 2, February Vol.2.No.1 2014 1-7. 2015,PP 59-69 ISSN 2349-0330 2349-0349. Sudaryo,Yoyo dan Yudanegara.2017 Investasi dan Lembaga Firdaus,Rachmat dan Maya,Arianti. 2011. Manajemen Keuangan. Perkreditan Bank Umum. Bandung: Alfabeta Sunyoto,Danang. 2012Dasar - Dasar Managemen Pemasaran, Jamaludin,Endang Ruswanti : Impact of Servise Quality Cet.1-Yogjakarta : Caps, 2012, Penerbit : PT.Buku and Customer Saifaction on Customer Loyalty : A Seru, Jakarta 12620. Case in a Private Hospital in Indonesia. Journal of Suryani,Tatik. 2008. Perilaku Konsumen: Implikasi Pada Business an Management (IOSR-JBM) e- Strategi pemasaran. ISSN:2278-487X,p- Suryani,Tatik. 2017. Managemen Pemasaran ( Strategik bank di ISSN:2318=7668.Vo;.19,Issue5,Ver.I. era global), CV Prenadamedia group. (May,2017) PP 23- 33. Sudaryono 2016 Managemen Pemasaran Teori dan Jilly B.Mandey, (2013) Promosi,Distribusi,Harga Implementasi CV Andi Offset, Jogjakarta. pengaruhya Terhadap Keputusan Pembelian Sugiyono, 2017 Metode Penelitian Kuantitatif, Kualitatif Rokok Surya Promild Journal EMBA 97,Vol.1 dan R &D. No.4 Desember 2013.ISSN 2303-1174. Bandung: Alfabeta Kasmir. 2012. Dasar-dasar Perbankan. Jakarta: PT. Raja Shofiyyuddin,A,A (2013) Pengaruh Kualitas Pelayanan dan Grafindo Persada. Harga Terhadap Kepuasan dan Loyalitas Pelanggan ( ______2014. Bank Dan Lembaga Keuangan Lainnnya, revisi Studi pada pasien rawat Inap di Rumah Sakit NU . 2014, Raja Grafindo Persada, Jakarta Tuban), Program Magister managemen Fakultas Kotler, Philip dan Gary,Amstrong. 2008. Prinsip-Prinsip Ekonomi dan Bisnis Brawijaya, Jurnal Aplikasi Pemasaran edisi 12. Mnagemen,11 Vol, No..3, September 2013 Kotler dan Keller,2014 Principles Marketing, Fifteenth ISSN:1693-5241. Edition, Pearson Education Limited Soegeng,W. (2017) The Effect of Religiosity,Servise quality Naeem,A.Muniba,L.Qurat,U.(2016) The Impact Of and trust on Customer Loyalty in Islamic Banking in Quality,Customer Satisfaction and Loyalty bogor Indonesia. InternationalReview of Program on Customer’s Loyalty. Internation Management and business Reseach Vol.6,Issue.1 Research Vo;.5 Issue.3 RMBR September 2016. ISSN: 2306-9007.March 2017. Panjaitan,Hotman (2017) Impact Of Satisfaction and Tjiptono,F dan Chandra, 2012,Pemasaran Customer Engagemen As Intervening,Variable on Strategik.Yogyakarta, ANDI Customer Loyaty : Study at XL Resto & Cafe ______2016,Manajemen Surabaya Indonesia. (Faculty of Ecomonic Strategik.Yogyakarta, ANDI University 17 Agustus 1945 Surabaya, Indonesia) 2016 Sevice,Quality dan International Journal of Business and Management Satisfaction edisi 4 CV.ANDI offset Jogjakarta. Invention ISS ( online) 2319-8028,ISSN : 2319- Tjiptono,Fandy & Anastasia Diana, 2015.Pelanggan Puas ? Tak 801XVl.6 Issue 9. September 2017 PP-41-48. Cukup !, Penerbit Andi Offset, Yogyakarta Tjiptono,Fandy & Anastasia Diana, 2016.Pemasaran, Penerbit Putro Eko.W 2012 Tekmik penyusunan Instrumen Andi Offset, Yogyakarta Penelitian. Percetakan Pustakan Pelajar Jogjakarta. Priyatno,D. 2013 Analisa Korelasi, Regresi dan Tjiptono,Fandy, 2015.Strategi Pemasaran, Penerbit Andi Offset, Multivariate Dengan SPSS.Gava Media Yogyakarta Jogjakarta. Wibowo,Lili A & Priansa,Donni J,2017 Manajemen Komunikasi Rahmayanty,Nina. 2010.Manajemen Pelayanan Prima, dan Pemasaran.:Alfabeta Bandung. Mencegah Pembelotan dan Membangun Customer Loyaty : Graha Ilmu Rangkuti,Freddy. 2017. Customer Care Excellece. Meningkatkan Kinerja Perusahaan melalui Pelayanan
39 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
The Effect of Islamic work ethics (IWE) on organization and performance: Evidence from an oil gas company Moh Shoim1, Abdul Mongid2 Tjahjani Prawitowati3
1,2&3 STIE Perbanas Surabaya, Nginden Semolo Street 34-36, Surabaya, 60118, East Java, Indonesia
ARTICLE INFO ABSTRACT ←11 Article history: This study aims to examine the effect of Islamic Work Ethics (IWE) on Organiza- Received tional Commitment and Performance with Job Satisfaction and Intrinsic Motiva- Revised tion as mediating variables. The method used in this study is the survey method, Accepted the sample consists of all employees of PT. PHE WMO Gresik and collected using a questionnaire. This study examines the influence between variables by using JEL Classification: partial least square (PLS). The results of the study indicate that Islamic Work Ethics has a direct influence on Organizational Commitment and Performance. Meanwhile, Job Satisfaction and Intrinsic Motivation can be considered as a Key words: variable that connects the mediating variables of Islamic Work Ethics to Organi- Islamic Work Ethics, zational Performance and Commitment. Job Satisfaction Intrinsic Motivation, The implication of this research is to encourage companies to pay attention to Organizational Commitment, organizational commitment and performance to create good relationships between Performance. employees and the company...
DOI: 10.6084/m9.figshare.9810932 ABSTRAK
Penelitian ini bertujuan untuk menguji pengaruh Etika Kerja Islam (EKI) ter- hadap Komitmen Organisasi dan Kinerja dengan Kepuasan Kerja dan Motivasi Intrinsik sebagai variabel mediasi. Metode yang digunakan dalam penelitian ini adalah metode survei, sampel terdiri dari semua karyawan PT. PHE WMO Gresik dan dikumpulkan menggunakan kuesioner. Penelitian ini menguji pengaruh antar variabel dengan menggunakan partial least square (PLS). Hasil penelitian menunjukkan bahwa Etika Kerja Islam memiliki pengaruh langsung terhadap Komitmen dan Kinerja Organisasi. Sementara itu, Kepuasan Kerja dan Motivasi Intrinsik dapat dianggap sebagai variabel yang menghubungkan varia- bel pemediasi Etika Kerja Islam pada Kinerja dan Komitmen Organisasi.
Implikasi dari penelitian ini adalah mendorong perusahaan untuk memperhatikan komitmen dan kinerja organisasi untuk menciptakan hubungan yang baik antara karyawan dan perusahaan.
1. INTRODUCTION quality of human resources (HR). The Islamic work ethic is an orientation to 'work' Increasing the quality of human resources which is rooted in the principles of Islamic Sharia (HR) is a natural process of change experienced by (Abdi : 2014), Individual perceptions of work ethics a country that was Berke m bang. The critical atti- are generated by their religious faith and cultural tude of the community that is starting to grow at values. this time is among others the birth of demands for Organizations in this era of globalization re- the performance of employees, especially in public quired to be able to adjust to the circumstances of organizations both State-Owned Enterprises the moment, and all that can be done by orga n (BUMN) or other government agencies. Both isation which is supported by the quality of human BUMN and government agencies should have em- resources (HR) is adequate. ployees with good performance and high commit- The quality of human resources (HR) is high ment to the organization. for supporting orga n ization, because man is a Employee performance is an issue that must be manager, a lawyer and driving tour activities other considered seriously by the organization, because resources in an organization. Therefore necessary along with the times, the performance will affect instrument, pattern, or approach in improving the the quality and quantity of an orga n ization. There-
* Corresponding author, email address:[email protected] fore, having reliable human resources (HR) is need- work ethics (IWE) has a positive effect on job satis- ed by the organization, so that organizational goals faction and organizational commitment, whereas are achieved and can improve the performance of there is no significant evidence about the effect of an organization Islamic work ethics (IWE) on turnover intention. From our interviews with HRD, Workers at PT. PHE WMO is a subsidiary of PT. Pertami- PT. Pertamina Hulu Energi WMO (PHE WMO) na Hulu Energi which is one of the state owned tends to feel at home and rarely change jobs, but enterprises (BUMN) in Indonesia under the auspi- does not rule out the possibility that employees will ces of PT. Pertamina (Persero) has actually had the also move to other places because of more attrac- capacity of employees with high quality perfor- tive offers in other oil and gas companies mance, but there are currently many problems re- According to Allen & Meyer (1990) in mo- lated to the optimization of employee performance hamed Farah Abdi, et. al (2014) Organizational Based on several studies on organizational per- Commitment is a psychological state that reflects formance and commitment related to Islamic work employees in an organization where employees ethics (IWE), many found that Islamic work ethics work. (IWE) had an influence on organizational perfor- According to Gheitani, et. al (2018) concluded mance and commitment, also some studies added that the Islamic Work Ethics (IWE) has a positive the presence of intrinsic motivation and job satis- effect on job satisfaction and Organizational Com- faction as their mediation. mitment with intrinsic motivation as mediator. From the literature, the authors conducted re- Research from Hayati and Chaniago (2012) search on employees who work at PT. PHE WMO. provides results that Islamic work ethics (IWE) From the results of an interview with the HRD sec- directly influence intrinsic motivation, job satisfac- tion (Ms. Suyuni, 2018) mentioning performance tion, and organizational commitment as well as optimization is needed for organizational efficiency intrinsic motivation and job satisfaction moderate and also organizational commitment is needed so the relationship between Islamic work ethics (IWE) that employees feel the organization is part of the and organizational commitment and the perfor- lives of employees. mance. Based on these reasons the author chose the ti- The results of the study of Awan, et al (2014 ) tle " The Effect of islamic work ethic on organiza- showed that there was a significant influence be- tion and performance: Evidence from an oil gas tween Islamic work ethics (IWE) on employee per- company " formance . 2. THEORETICAL FRAMEWORK AND HY- According to Abdi (2014 ), Islamic work ethics POTHESES (IWE) has an influence on performance, but Islamic Islamic work ethics (IWE). work ethics (IWE) does not significantly affect or- According to Beekun (1996) in Rokhman (2010) ganizational commitment. defines ethics as a set of moral principles that dis- Hidayat, and Tjahjono (2015) revealed that tinguish what is right and what is wrong. Ethics is there is a positive and significant influence between a normative field because it determines what must Islamic work ethics (IWE) on intrinsic motivation, be done or not done. Ethics covers moral issues and (2). there is a positive and significant influence be- choices and deals with right and wrong behavior.. tween Islamic work ethics (IWE) on job satisfaction, According to Salahudin, et al (2016 ) Islamic (3). there is positive and significant correlation be- work ethics is an ethical concept based on Islamic tween Islamic work ethics (IWE) toward organiza- teachings and principles that rely on faith tional commitmen (4). there is a positive and signif- Rizk in Marri (2012) stated that Islamic work icant influence between intrinsic motivation on ethics is an orientation towards work, and the vir- organizational commitment, (5). there is positive tue approaches human life. Islam places the highest and significant correlation between intrinsic moti- on ethical values because it regulates all aspects of vation toward job satisfaction. life Rachmawati and Sudarma (2016) provide the From some definitions above, it can be con- results of the study showing there is a positive in- cluded that Islamic work ethics (IWE) is a principle, fluence between job satisfaction on organizational value system, or orientation held by an organiza- commitment. Intrinsic motivation proved to medi- tion in determining work behavior or business de- ate the association of Islamic work ethics and job cisions that are right and wrong based on Sharia, satisfaction on organizational commitment. namely the Qur'an and the Prophet Muhammad's Rokhman's research (2010) shows that Islamic Hadith
41 isation where employees work terebut Job Satisfaction (JS) Robbins & Judge (2013) states that job satisfaction is Performance (PER) when employees work happily which results in Jex (2002) in Abdi (2014) states that In general per- good performance formance refers to how well someone can do his According to Schermerhonet. al. in Keumala job. Job performance can also be defined as all be- (2012), job satisfaction is defined as an attitude that haviors performed by employees at work. reflects a person's feelings for his work or work According to Porter and Lawler in Abdi (2014), arrangements at a certain point in the team there are three ways to determine the level of per- From several definitions above, it can be con- formance, namely cluded that job satisfaction is a positive or negative 1. The number of sales and production levels is feeling of a person in the workplace that affects the increasing actions of employees at work 2. The rating or performance of the employee man- ager is mentioned (Managers Rating) Intrinsic Motivation (IM) 3. Self appraisal According to Siagian (2014) in Hidayati (2017). Mo- Performance according to Hersey and tivation is the driving force, reasons, or impulses in Blanchard in Abdi (2014) is the level of achieve- the human being that cause humans to do actions ment of business and social goals and responsibili- or behave ties. Ryan and Deci (2000) in Hayati and Chaniago (2012) state that intrinsic motivation refers to doing Relations between variables and Hyphotesis something because it is inherently interesting or Islamic Work Ethics (IWE) on Performance fun According to research Abdi et al. (2014) Islamic From some of the definitions above, it can be work ethics (IWE) significantly influence employee concluded that Intrinsic Motivation is a driving performance, but Islamic work ethics (IWE) does motivation for someone in the workplace that caus- not affect organizational commitment. This study es employees to do something at work the author uses as a reference in this study, that Islamic work ethics (IWE) significantly influence Organizational Commitment (OC) employee performance The three component model of Organizational In addition, according to Hayati and Chaniago commitment filed by Allen & Meyer (1993) in Rob- (2012) there is also a relationship between Islamic bins & Judge (20 13), are as follows: work ethics (IWE) and employee performance even though the effect is greater between intrinsic moti- 1. Affective commitment vation on performance than Islamic work ethics Affective Commitment Is an emotional feeling for (IWE) on performance. the organization and belief in its values. Employees According to Aswan (2014) Islamic work ethics with strong affective commitment will continue (IWE) significantly influences employee perfor- their work because they really want to do it. mance by emphasizing employee organizational 2. Continuance commitment commitment Continuance commitment is a condition that per- H1: Islamic work ethics (IWE) has a significant effect sists in the organization due to economic motives. on performance Employees who survive in the organization based on this commitment are based on the need for the Islamic work ethics (IWE) on organizational organization. commitment 3.Normative commitment According to KeumalaHayati and Indra Chaniago Normative Commitment Is a condition where the (2012) Islamic work ethics (IWE) have a positive obligation to stay in the organization for moral or effect on organizational commitment, Islamic work ethical reasons. Employees who have a high nor- ethics (IWE) directly influences intrinsic motivation, mative commitment, will stay in the organization job satisfaction, organizational commitment with because they feel they have to remain in the organi- job satisfaction and intrinsic motivation as media- zation. tors From the definition above can dition m pulkan In contrary to KeumalaHayati's research Abdi that Organizational Commitment is feeling the per- (2014) revealed that performance is significantly son who causes a person to survive or leave orga n related to Islamic work ethics but on the other hand organizational commitment is not significantly re-
42 lated to Islamic work ethics. H4: Islamic Work Ethics (IWE) has a significant effect Aswan (2014) found in his research that there on Organizational Commitment through Intrinsic is a relationship between Islamic work ethics (IWE) Motivation on organizational commitment. Islamic work ethics (IWE) on performance H2: Islamic work ethics (IWE) has a significant effect through job satisfaction on organizational commitment According to Hayati and Chaniago (2012) Is- lamic work ethics (IWE) have a positive effect on Islamic work ethics (IWE) on performance performance and job satisfaction as mediators, through intrinsic motivation Hayati also mentions that Islamic work ethics (IWE) According to Hayati and Chaniago (2012) Islamic directly influence intrinsic motivation, job satisfac- work ethics (IWE) have a positive effect on perfor- tion, organizational commitment and satisfaction. mance through intrinsic motivation, Islamic work work and intrinsic motivation as a mediator in his ethics (IWE) directly influences intrinsic motivation, research job satisfaction, organizational commitment with Titisari (2012) mentions the relationship be- job satisfaction and intrinsic motivation as media- tween work culture and performance and job satis- tors faction as mediator Ghannad (2016) states that Intrinsic Motivation H5: Islamic work ethics (IWE) has a significant effect mediates an indirect relationship between Islamic on performance through job satisfaction work ethics and Organizational Commitment and performance Islamic work ethics (IWE) towards organizational H3: Islamic work ethics (IWE) has a significant effect commitment through job satisfaction on performance through intrinsic motivation According to Hayati and Chaniago (2012) Islamic ethics (IWE) have a positive effect on organizational Islamic work ethics (IWE) towards organizational commitment to job satisfaction as mediators, commitment through intrinsic motivation Hayati also mentions that Islamic work ethics (IWE) According to Hayati and Chaniago (2012) Islamic directly influences intrinsic motivation, job satisfac- work ethics (IWE) have a positive effect on organi- tion, organizational commitment with job satisfac- zational commitment through intrinsic motivation tion and intrinsic motivation as a mediator in his as mediators research Rachmawati and Sudarma (2016) also men- H6: Islamic work ethics (IWE) has a significant effect tioned that there was a positive and significant in- on organizational commitment Job satisfaction. fluence between Islamic work ethics on organiza- tional commitment and intrinsic motivation as me- diator
Figure 1. Research model framework 3. RESEARCH METHOD lamic Work Ethics (IWE) and two dependent varia- Location, Population and Samples bles consisting of Organizational Commitment and The population of this research is all employees Performance and two mediating variables are Job who work at PT. PHE WMO Gresik, East Java with Satisfaction and Intrinsic Motivation. 129 employees. Questionnaires are distributed in the form of Offline or electronic mail for employees Assessment Techniques who work in Offshore locations. Data processed is Evaluation techniques for measuring research in- primary. struments were carried out using a Likert scale with an assessment scale using scores of 1 to 5, var- Research and Instrument Variables iations in the answers for each question item were There is one independent variable namely the Is- "strongly agree", "agree", "Neutral / Average", "No
43 agree "and" strongly disagree. "Each answer choice does not have to be large (Ghozali, 2014). In addi- is given a value of 1 for negative negative answers tion, there are two steps that must be taken in car- and 5 for positive extreme answers. All respond- rying out the analysis using PLS. The first stage is ents' answers were further processed using the the measurement model (external model) by testing Structural Equation Model (SEM) approach using reliability and validity. Then, the second stage is to WarpPLS 6.0 software. test the structural model (inner model) which in- cludes the ability to predict the model and the rela- Data analysis techniques tionship between variables. Data analysis for hypothesis testing was car- ried out using WarpPLS 6.0 software. WarpPLS 6.0 is used because the advantages of such data are not Measurement always normally distributed and the sample size Tabel 1. Instrument Details for Measurement of Research Variables VARIABEL DIMENTION CODE NO INDICATOR ITEMS EKI01 1 Dedication in work 4 EKI02 2 Useful work 1 EKI03 3 Justice and generosity at work 1 EKI04 4 Productive work 1 EKI05 5 Do the best of his abilities. 1 Istrument by Ali Islamic Work Ethics Work promotes self-development and social (1988) inRokh- EKI06 6 2 (IWE) relations man (2010) EKI07 7 Human relations 1 EKI08 8 Work will more quickly achieve progress in life. 3 EKI09 9 Work hard to fulfill his responsibilities. 1 The work value is determined by the intention EKI10 10 that accompanies it rather than the results of his 1 work. Dubinsky and KP01 1 Feel satisfied with the work they have 1 Harley (1986) Job Satisfaction(F) inRokhman KP02 2 Feel satisfied with the achievements 1 (2010) KP03 3 Feel satisfied with the type of work they have 1 MI01 1 I feel personal satisfaction when I work well 1 MI02 2 I feel uncomfortable when doing this job badly 1 Warr, et al (1979) MI03 3 I am proud to be able to work as well as I can 1 Intrinsic Motivation inHidayat (2015) MI04 4 I feel sad when working is not on target 1 I want to see an advanced organization because MI05 5 1 of my dedication MI06 6 I try to think of effective and fun ways to work 1 Bozeman danPer- KO01 1 willing to work more than the task they should 1 rewe (2001) da- discuss workplace organizations with friends OrganisationalCommitmen KO02 2 1 lamRokhman because they are proud (2010), KO03 3 Accept all types of work provided 1 TP01 1 Using high work standards 1 TP02 2 Able to work without supervision 1 TP03 3 Eager at work 1 Task Performance Rabindra Kumar TP04 4 Willing to do many tasks at work 1 Pradhan &LalatenduKesari TP05 5 Complete work on time 1 Jena (2017) TP06 6 High performance 1 AP01 1 Works well for collective intelligence 1 Adaptive Performance 1P02 2 Can manage change 1 1P03 3 Handle effective work teams for change 1
44 1P04 4 Mutual understanding is the solution in the team 1 1P05 5 Often lose patience in facing criticism 1 1P06 6 Comfortable with work flexibility 1 can handle organizational changes from time to 1P07 7 1 time CP02 1 Willing to help co-workers anytime 1 CP02 2 Willing to handle more responsibilities 1 CP03 3 empathize with coworkers when in trouble 1 CP04 4 Active in discussions and meetings 1 CP05 5 appreciate the achievement of colleagues 1 Contextual Performance Feel happy to gather with many people in the CP06 6 1 organization CP07 7 Share ideas and knowledge in the team 1 CP08 8 Coordinate well 1 CP09 9 Become a tutor for new employees 1 CP10 10 Communicate actively in decision making 1 Source: data processed 4. DATA ANALYSIS AND DISCUSSION each variable questioned in the questionnaire Characteristics Analysis of Respondents Following are the responses of respondents in Analysis of data about the characteristics of re- this study. spondents was performed to describe the character- istics of employees of PT. PHE WMO Gresik. The Tabel2. total population is 129 respondents, of which 106 Respondents response (82%) are male and 23 (18%) are women. From the Mini- Maxi- length of work 37 (29%) had a working period of 3- Varia- mum mum Aver- 6 years, 43 (33%) had a working period of 6-9 years, bel N Average Average age Rating IWE Strongly and 49 (38%) had a tenure of> 9 years. In terms of 99 3,99 4,84 4,40 agree education, 7 (5%) employees are senior high school JS 99 3,80 3,93 3,87 Agree level, 15 (12%) employees are D3 level, 98 (76%) IM 99 4,09 4,58 4,37 Agree kar-yawan are undergraduate and 9 (7%) master OC 99 3,62 3,99 3,84 Agree level PER 99 2,13 4,40 4,12 Agree Source: data processed Outer ModelMeasurement Based on the table above it can be explained that In this stage, this is a test of reliability and validity the Performance variable has the lowest overall for the research model. Reliability test was carried average of 2.13, while the Islamic Work Ethics out using composite references and composite (IWE) variable has the highest overall average of cronbach alpha while validity tests used conver- 4.40 gent references and discriminant validity. Partial Least Square (PLS) Analysis Descriptive analysis Measurement Model (Outer Model) Descriptive analysis is used to provide an overview In the results of the research in the outer model, it of the variables in this study, namely the variable will be known how each indicator relates to the Islamic Work Ethics, Job Satisfaction Variables, latent variable. To measure it can be seen from the Intrinsic Motivation Variables, Organizational validity or it could be the next AVE value of the Commitment Variables and Performance Variables. reliability value as follows: These variables will describe the characteristics of Tabel 3 respondents and respondents 'answers to the The AVE Value of Structural Model (1st Step) statements in the questionnaire for each variable Minimum Latent Construct AVE Criteria and for respondents' answers obtained from the Standart magnitude of the mean class interval after it is known then made a range of scales, so it can be Islamic Work Ethics 0.537 0,5 Valid Job satisfaction 0.798 0,5 Valid seen where the average rating of respondents for Intrinsic Motivation 0.526 0,5 Valid
45 Organizational Commitment 0.671 0,5 Valid ≥ 50 Good Performance 0.299 0,5 Invalid Criteria Source: data processed ≥ 30 sufficient As based on the first validity test presented in Ta- Source: data processed ble 3, the AVE score shows that the latent construct for Performance is proven invalid because the AVE Convergent validity and composite reliability. In value for the construct is still below the standard kovergen validity the value of a factor loading is> value of 0.5. This shows that some items that have a 0.70, but a value between 0.50–0.60 is still accepta- Load Factor value below 0, 6 must be issued in the ble. Another measurement of convergent validity is 2nd structural model to allow the AVE value of the to look at the value of AVE (Average Variance Ex- Performance variable so that it can increase. tracted). From the description above, the results of Tabel 4 the analysis are explained in Table 4. The AVE Value of Structural Model (2nd Step) Based on Table 4, the values of the four con- Minimum structs have met the criteria for conver-gent validi- Latent Construct AVE Criteria Standart ty which is> 0.50–0.60 and greater than the value of Islamic Work Ethics AVE. Then the construct is declared good and fea- 0.537 0,5 Valid sible. Job satisfaction 0.798 0,5 Valid Furthermore, the construct reliability test can Intrinsic Motivation 0.526 0,5 Valid be measured by two criteria, namely composite Organizational reliability and cronbach's alpha. A construct is de- Commitment 0.671 0,5 Valid clared reliable if the composite composite value is> Performance 0.505 0,5 Invalid 0.70. while the value of Cronbach's alpha has a cri- Source: data processed terion ≥ 30 means enough and ≥ 50 means Good Referring to Table 4, this shows that all latents Based on these explanations, the results of the built are proven valid because the AVE value is analysis will be explained in Table 2. From the re- higher than 0.5 which is the minimum standard sults of the analysis above, it can be seen that the value in WarpPls. In addition, the results of the composite reliability value of all variables is> 0.70 Cross Loadings test on latent construction items so it is declared reliable. Then the cronbach's alpha that show all items proved valid because the cross- value indicates that all the variable values ≥ 0.50 are loading correlation values of latent constructs were declared good. higher than the cross-load correlations with other latent constructs. Model Estimates Tabel 5 The following is the estimation of the processed Composite Reliability model from WARPPLS 6.0 Re- Value IWE JS IM OC PER mark Com- posite Relia- Relia- bility 0.935 0.922 0.864 0.858 0.889 ble Criteria ≥ 70 Cronb ach 0.919 0.873 0.806 0.750 0.869 Good
46 Table 6 Results of Model Estimation on Testing P R P Be- R Variable Val Squar Remark Variable Val- Beta Remark ta Square ue e ue
IWE-OC 0,1 0,33 0,1 Significant
IWE-PERF 0,1 0,40 0,4 Significant Significant IM-PERF 0,1 0,35 0,4 Significant IWE-IM 0,1 0,51 0,26 Significant IM-OC 0,01 0,21 0,29 Significant Not Signifi- Significant JS-PERF 0,39 0,03 0,4 IWE-JS 0,1 0,31 0,1 cant Significant JS -OC 0,03 0,18 0,29 Significant Source: data processed (4) "Accepted"But for mediation, Job Satisfaction has no significant effect on Performance because The following are the results of the Model Esti- the P value is 0.39> 0.5, thus the hypothesis is "not mates in the Test, namely: accepted"
Effect of Islamic Work Ethics (IWE) (X) on organi- Effect of Islamic Work Ethics (IWE) (X1) on Or- zational commitment (Y1) ganizational Commitment (Y2) through job satis- IWE has a significant positive effect on Organiza- faction (Z2) tional Commitment because the value of p value is IWE has a significant positive effect on Perfor- 0.01 <0.05 so it is significant, thus the hypothesis " mance through Job Satisfaction because the value of accepted". p value is 0.01 <0.05 so it is significant, thus hy- pothesis (4) "Accepted"and for mediation Job Satis- Effect of Islamic Work Ethics (IWE) (X) on Per- faction has a significant effect on Organizational formance (Y2) Commitment because the value of P 0.03 <0.5 thus IWE has a significant positive effect on Perfor- the hypothesis is "accepted" mance because the p value is 0.01 <0.05 so it is sig- nificant, thus the hypothesis " accepted ". This study shows the same results as previous research conducted by KeumalaHayati and Indra Effect of Islamic Work Ethics (IWE) (X) on per- Caniago (2012) which states that there is a signifi- formance (Y1) through intrinsic motivation (Z1) cant relationship between Islamic work ethics IWE has a significant positive effect on Perfor- (IWE) and Organizational Commitment and Per- mance through Intrinsic Motivation because the formance, but in contrast to Keumala's research, value of p value is 0.01 <0.05 so it is significant, this study having a Job Satisfaction result does not thus the hypothesis " accepted ". have a significant effect on Performance because its P value is 0.39 or> 0.5 Effect of Intrinsic Motivation (Z1) on organiza- This research is also the same as previous re- tional commitment (Y2) through intrinsic motiva- search by Awan, et. Al (2014) which states that tion (Z1) there is a significant influence between Islamic IWE has a significant positive effect on Organiza- work ethics (IWE) on employee performance. tional Commitment through Intrinsic Motivation This research is also the same as Awan (2014) because the value of p value is 0.01 <0.05 so it is research which states that Islamic work ethics significant, thus the hypothesis " accepted ", (IWE) has a positive impact on organizational commitment. Effect of Islamic Work Ethics (IWE) (X1) on per- formance (Y1) through job satisfaction (Z2) 5. CONCLUSION, IMPLICATION, SUGGES- IWE has a significant positive effect on Perfor- TION, AND LIMITATIONS mance through Job Satisfaction because the value of Based on the research that has been done, it can be p value is 0.01 <0.05 so it is significant, thus hy- concluded that all hypotheses are accepted, namely pothesis where:
47 (1) Islamic work ethics (IWE) has a significant effect Ali, Abbas 2001. Scalling an Islamic Work Ethic :The on performance (2) Islamic work ethics (IWE) has a Journal of Social Pshychology, 128(5), 575-583 significant influence on organizational commitment Awan, Khurram Zafar, Mussawar Abbas, Ibn e- (3) Islamic work ethics (IWE) has a significant effect Waleed Qureshi and Khurram Shahzad (2014) on performance through intrinsic motivation “Exploring the Relationship between Islamic (4) Islamic work ethics (IWE) have a significant ef- Work Ethics, Employee Work Performance and fect on organizational commitment through intrin- the Mediation Role of Organizational Com- sic motivation (5) Islamic work ethic (IWE) does not mitment”. J. Asian Dev. Stud, Vol. 3, Issue 3, have a significant influence on performance Chanzanagh, through job satisfaction (6) Islamic work ethics Gheitani, Alborz, Saheb Imani, Nader Seyyedamiri, (IWE) has a significant effect on organizational dan Pantea Foroudi (2018). "Mediating effect of commitment through job satisfaction. intrinsic motivation on the relationship be- This study provides the conclusion that Islamic tween Islamic work ethic, job satisfaction, and work ethics (IWE) is very important in influencing organizational commitment in banking sector” Organizational Performance and Commitment at International Journal of Islamic and Middle Eastern PT. PHE WMO So that employees who apply the Finance and Management, 2018 Islamic Work Ethics (IWE) at work will tend to be Ghozali, Imam and Latan, Hengky, "Partial Least focused on work and discipline according to Islam- Squares, Konsep, Metode, danAplikasi- ic Sharia guidelines. menggunakan Program Warppls 4.0" Universitas Employee satisfaction will have a positive impact Diponegoro Semarang, 2012 on the Company, for example employees will be Hayati, K. dan Caniago, I. (2012). Islamic Work loyal to the company even though there are many Ethic: The Role of Intrinsic Motivation, Job Sat- tempting offers. This will be achieved when em- isfaction, Organizational Commitent and Job ployees are satisfied with the facilities provided by Performance. Procedia – Social and Behavioral the company. Sciences 65 (2012) 272-277 Research carried out by researchers is a continua- Hidayat, Syamsul & Tjahjono, Heru Kurnianto tion of pre-existing theories. This is expected to (2015). “Peran etika kerja Islam dalam obtain results that can be used as benchmarks in mempengaruhi motivasi intrinsik kepuasan decision making in the future. kerja dan dampaknya terhadap komitmen Or- The results of this study can be input to the man- ganisasional. Jurnal Akuntansi dan Manajemen agement of PT. PHE WMO which is the employee's AKMENIKA, Volume 13, nomor 1 April 2016. spearhead. The results of these studies are im- ISSN : 1978-1679 portant for management in paying attention to em- Hidayati, Siti Noor and Ermiyanto, Antonius "Ana- ployee welfare which has implications for organiza- lisis Faktor Motivasi Intrinsik dan Motivasi Ek- tional commitment and performance in the compa- trinsik Pengaruhnya terhadap kinerja Karya- ny. wan dengan Kepuasan Kerja Sebagai Mediasi" With this research also the management of PT. PHE JurnalMaksipreneur, Vol. VII, No. 1, Desember WMO in order to pay attention to the workload 2017, hal. 18 ̶ 30 borne by employees Marri, Muhammad Yousuf Khan, Arshad Mahmood Sadozai, Hafiz Muhammad Fakhar Based on this research, further researchers can add Zaman, Muhammad Israr Yousuf zai, respondents not only to permanent employees but Dr.Muhammad I. Ramay, (2016) "Measuring also to employees of the Third Party Contract Islamic Work Ethics and Its Consequences on (TPC). Organizational Commitment and Turnover In- tention an empirical study at Public sector of REFERENCES Pakistan", International Journal of Management Abdi, Mohamed Farah, Siti Fatimah Dato’ Wira Sciences and Business Research Volume 2, Issue 2- Muhamad Nor and Nor Zuhairatun Md. Radzi ISSN (2226-8235) (2014). “The Impact of Islamic Work Ethics on Nizam, Shahrul bin Salahudin, Siti Sarah binti Ba- Job Performance and Organizational Commit- haruddin, Muhammad Safizal, " The Effect of ment”, Proceedings of 5th Asia-Pacific Business Islamic Work Ethics on Organizational Com- Research Conference 17 - 18 February, 2014, Hotel mitment" Procedia Economics and Finance 35 ( Istana, Kuala Lumpur, Malaysia, ISBN: 978-1- 2016 ) 582 – 590 922069-44-3 Rachmawati, Tiara and Sudarma, Ketut. (2016). Pengaruh Etika Kerja Islami dan Kepuasan
48 Kerja pada Komitmen Organisasional Dengan Ghannad, Simin zeqeibi, Sirus alipoor birgani, & Motivasi Intrinsik Sebagai Variabel Pemediasi. Sahar Hesami "Causal relationship between Management Analysis Journal 5 (3) (2016) ISSN Islamic work ethic and organizational self- 2252-6552 esteem with Organizational Commitment Robbins, Stephen P and Judge, Timoty A. 2013. and Job Performance with mediating role of In- Organizational Behavior, 15 Edition, by Pearson trinsic Motivation in employees of Naft Com- Education, Inc., publishing as Prentice Hall. pany", Journal of Science and Today's World Rokhman, Wahibur (2010) “The Effect of Islamic 2016, volume 5, issue 3, pages:86-89 Work Ethics on Work Outcomes".EJBO Elec- Titisarie, Purnamie "Culture and Its Impact on The tronic Journal of Business Ethics and Organization Working Performance of Govermenet Staff Studie, Vol. 15, No. 1 (2010) Through Job Satisfaction" Journal of Economics, Siregar, Syofian (2012). Metode PenelitianKuantitatif Business, and Accountancy Ventura Volume 15, Dilengkapi Dengan Perbandingan Perhitungan No. 2, August 2012, pages 219 – 230 Manual dan SPSS. Jakarta, Prenada media- Group
49 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
The Effect of Perceive Usefulness, Ease Of Use, And Credibility On The Behavioral Through The Attitude Of Use On The BPJS Ketenagakerjaan
Agus Dwi Fitriyanto, SE.
Fitriyanto, Agus Dwi, Sekolah Tinggi Ilmu Ekonomi Perbanas Program Studi Magister Manajemen Surabaya, YKP Pandugo I PD31 regency, Rungkut, Surabaya, East Java, Indonesia
ARTICLE INFO ABSTRACT Article history: BPJS Ketenagakerjaan as a public legal entity that has the main task in providing Received protection and insurance for workers in Indonesia, as well as being a facilitator of Revised service needs between workers and companies (employers). The importance of the Accepted role and function of protection and insurance do not necessarily make the company (employer) include its workers in the 4 main programs initiated by the government JEL Classification: through BPJS Ketenagakerjaan. The realization of participation in 2018 is far from the target set. This phenomenon allegedly emerged as a result of low awareness, which is reflected in the perceptions and attitudes of workers which results in a low Key words: intention to utilize BPJS Ketenagakerjaan facilities. By using a quantitative descrip- perceived usefulness, perceived ease of tive approach through SEM (Structural Equation Modeling) analysis, it can be use, perceived credibility concluded that perceived usefulness, perceived ease of use, and perceived credibility influence the attitudes of workers, and ultimately affect the behavioral intention of DOI: 10.6084/m9.figshare.9811382 workers.
ABSTRAK BPJS Ketenagakerjaan sebagai badan hukum publik yang memiliki tugas utama dalam memberikan perlindungan dan jaminan bagi para pekerja di Indonesia, serta menjadi fasilitator kebutuhan layanan antara pekerja dengan perusahaan (pemberi kerja). Pentingnya peran dan fungsi perlindungan dan jaminan ini tidak serta mer- ta membuat, perusahaan (pemberi kerja) untuk mengikutsertakan perkerjanya da- lam 4 program utama yang digagas pemerintah melalui BPJS Ketenagakerjaan. Secara faktual, realisasi kepersertaan tahun 2018 jauh dari target capaian yang ditetapkan. Fenomena ini disinyalir muncul sebagai akibat rendahnya kesadaran yang tercermin dari persepsi dan sikap para pekerja yang berakibat pada rendahnya niat untuk memanfaatkan fasilitas BPJS Ketenagakerjaan. Dengan menggunakan pendekatan deskriptif kuantitatif melalui analisis SEM (Structural Equation Model- ling, dapat disimpulkan bahwasanya persepsi manfaat, persepsi kemudahan penggunaan, dan persepsi kredibilitas berpengaruh terhadap sikap para pekerja, dan akhirnya mempengaruhi minat para pekerja.
1. INTRODUCTION ployers to include their workers in the 4 programs of BPJS Ketenagakerjaan. The reality shows that the Following Law No. 24 of 2011 concerning BPJS, PT. participants of BPJS Ketenagakerjaan are still far Jamsostek has changed into BPJS Ketenagakerjaan, from the expectation, this is evidenced from the and has become an independent government insti- realization of BPJS Ketenagakerjaan in 2018, which tution in organizing social security programs. Re- only reached 24,304,964 workers while the target ferring to Law No. 40 of 2004 concerning SJSN, set in 2019 was 55,560,730 workers. BPJS Ketenagakerjaan was given the authority to The low BPJS Ketenagakerjaan membership was manage 4 main programs namely JKK, JHT, JP, and triggered by a lack of awareness and low-interest JK in the context of providing insurance for work- use of employers. Wibowo in Irmadhani and ers and providing benefits to employers. The im- Nugroho (2011) explained that the interest in repet- portance of the role and function of this protection itive use is a behavioral tendency to keep using a and insurance do not simultaneously make em- technology. Interest in use in this study refers to the
Corresponding author, email address: [email protected] intention of the company's participation in the BPJS Ketenagakerjaan program. The effort to increase the H1: The perceived benefits affect the attitude of use intention to use repeatedly can be done through in the BPJS Ketenagakerjaan increasing the attitude of use where the attitude of H2: The perceived ease of use affects the attitude of use is formed from several factors, including the use in the BPJS Ketenagakerjaan perceived usefulness, perceived ease of use and H3: The perceived credibility influences the atti- perceived credibility. In line with the opinion of tude of use in the BPJS Ketenagakerjaan Davis (1989) which explains that two main concepts H4: The attitude impacts the behavioral intention in are trusted in user acceptance, namely perceived BPJS Ketenagakerjaan ease of use and perceived usefulness. 3. RESEARCH METHOD Fitriana (2015) proves that the factors of Perceived This research uses a quantitative descriptive ap- Usefulness, Perceived Ease of Use, and Perceived proach through a research instrument in the form Credibility affect the interests of BCA bank custom- of a questionnaire. With the Slovin technique, a ers to use internet banking. While Oroh and Rumo- sample of 380 companies was obtained with the koy (2015) have proven that perceived ease of use criteria of having joined as BPJS Ketenagakerjaan - and perceived usefulness do not significantly influ- Probolinggo membership for at least 1 year. The ence the intention to repurchase Lion Air electronic independent variables used in this study are the tickets. Whereas Cho's (2015) research proves that Perceived Usefulness, Perceived Ease of Use, and perceived usefulness and perceived ease of use Perceived Credibility. The attitude of use as a me- have a statistically significant effect on behavioral diating variable (intervening variable) between the intentions for shopping on the Internet. Kosasih, independent variables with the intention of repeat- Setianti, and Wahyudin (2017) proved that the ed use as the dependent variable. Referring to the credibility of Tuberculosis officers as measured by conceptual framework and hypotheses in this expertise and trust affected the tuberculosis pa- study, the statistical analysis used is SEM (Struc- tient's compliance attitude during sputum exami- tural Equation Modeling) analysis and supported nation at the end of the second month. by the PLS version 3.0 program through several stages of testing, such as outer model testing, inner 2. THEORETICAL FRAMEWORK AND HY- model testing, and hypothesis testing. POTHESES Theoretical Framework 4. DATA ANALYSIS AND DISCUSSION Perceived Usefulness is defined as a level or state 4.1 Instrument Test where a person believes that using a particular sys- Validity tem will improve its performance. Measurement of Validity testing through Pearson Product Moment usefulness construct according to (Davis 1989) con- shows the results that all indicators of independent sists of: 1). make work faster (work more quickly), variables and dependent variables are declared 2). useful (useful), 3). increase productivity (in- valid, with a significance value of less than 5%, as crease productivity), 4). increase effectiveness (en- shown in the following table: chance effectiveness), and 5). develop job perfor- correlation Sig Variable Code Conclusion mance (improve job performance). Perceived ease coefficient of use is the degree to which a person believes that Perceived Useful- PU.1 0.553 0.002 Valid technology is easy to understand. Therefore, a sys- ness PU.2 0.753 0.000 Valid (PU) tem that requires a small business is said to be bet- PU.3 0.653 0.000 Valid ter than a system that requires a larger business PU.4 0.751 0.000 Valid (Davis, 1989). Perceived Ease of PEU.1 0.832 0.000 Valid Based on the background description and the theo- Use (PEU) PEU.2 0.862 0.000 Valid retical basis and previous research described above, PEU.3 0.885 0.000 Valid the framework of thought used in this study is as PEU.4 0.805 0.000 Valid follows: Perceived Credi- PC.1 0.522 0.003 Valid bility PC.2 0.617 0.000 Valid Perceived (PC) PC.3 0.844 0.000 Valid
PC.4 0.842 0.000 Valid Perceived Attitude Behav- The Attitude ATT.1 0.871 0.000 Valid ioral In- (ATT) Perceived ATT.2 0.753 0.000 Valid ATT.3 0.773 0.000 Valid BI.1 0.739 0.000 Valid 51 Behavioral Inten- BI.2 0.826 0.000 Valid tion BI.3 0.756 0.000 Valid (BI) BI.4 0.482 0.007 Valid BI.5 0.322 0.083 Valid Reliability Test 1 Based on the results of the Cronbach Alpha reliabil- PEU. 0.243 0.580 0.227 0.294 0.304 ity test, it was obtained that all the independent 2 PEU. variables and the dependent variables in this study 0.432 0.865 0.449 0.592 0.498 3 were stated to be reliable with a Cronbach Alpha PEU. 0.452 0.851 0.480 0.565 0.435 value> 0.6 as shown in the following table: 4 PC.1 0.570 0.531 0.842 0.569 0.568 Composite PC.2 0.636 0.433 0.778 0.427 0.495 Reliability Perceived Usefulness (PU) 0.854 PC.3 0.596 0.439 0.807 0.419 0.547 Perceived Ease of Use (PEU) 0.840 PC.4 0.593 0.419 0.842 0.444 0.511 Perceived Credibility (PC) 0.890 ATT. 0.445 0.541 0.432 0.815 0.539 The Attitude (ATT) 0.826 1 ATT. Behavioral Intention (BI) 0.835 0.431 0.481 0.446 0.758 0.440 2
ATT. 0.438 0.529 0.475 0.774 0.628 4.2. Model Test 3 Outer Model BI.1 0.411 0.330 0.410 0.383 0.713 Convergent Validity Test BI.2 0.503 0.370 0.555 0.471 0.734 The variable of perceived usefulness (PU) that has 5 BI.3 0.505 0.419 0.503 0.507 0.787 measurement items is declared valid as a construct BI.4 0.521 0.470 0.446 0.590 0.665 measurement tool, because all of them have con- BI.5 0.430 0.385 0.371 0.441 0.643 vergent validity values above 0.5. The perceived Ease of Use (PEU) variable has 4 measurement items that declared valid as a measure of the con- Average Variance Extracted (AVE) struct, because the convergent validity value is The results of the AVE value for the indicator block above 0.5. The Perceived Credibility (PC) variable that measures the construct can be stated to have a measured by 4 items was declared valid as a meas- good discriminant validity value because the AVE ure of the construct, because the convergent validi- value> 0.5. This means that all construct variables ty value was above 0.5. The variable of usage atti- are declared reliabl tude (ATT) as measured by 3 items is declared val- Average Variance id as a measure of the construct, because the con- Extracted (AVE) vergent validity value is above 0.5. The Behavioral Perceived Usefulness (PU) 0.595 Intention (BI) as measured by 5 measurement items Perceived Ease of Use (PEU) 0.574 as a whole has a convergent validity value above Perceived Creadibility (PC) 0.669 0.5, then 5 measurement items that measure Behav- The Attitude (ATT) 0.613 ioral Intention (BI) are declared valid as a measure Behavioral Intention (BI) 0.504 of the construct. Composite Reliability Discriminant Validity The construct can be filled with the criteria if all of The value of cross loadings in the table is obtained them have composite reliability values> 0.70 overall from the construct expressed as having (Ghozali, 2014). good discriminant. Where the value of the correla- tion of indicators of the construct must be greater Composite than the value of the correlation between indicators Reliability with another constructs. Perceived Usefulness (PU) 0.854 Perceived Ease of Use (PEU) 0.840 Per- Per- Per- Behav- Perceived Credibility (PC) 0.890 ceived ceived ceived The ioral Use- Ease of Credi- Attitude The Attitude (ATT) 0.826 Intention fulness Use bility (ATT) (BI) Behavioral Intention (BI) 0.835 (PU) (PEU) (PC) PU.1 0.753 0.344 0.564 0.414 0.518 PU.2 0.815 0.408 0.583 0.432 0.518 Based on the table, it can be explained that all of PU.3 0.786 0.408 0.528 0.387 0.502 them have composite reliability values> 0.70 or it can be stated that they have filled the composite PU.4 0.729 0.498 0.563 0.478 0.543 reliability criteria so that each construct can be posi- PEU. 0.480 0.698 0.495 0.491 0.456 tioned as a research variable. This indicates that in
52 a composite manner, all variables are able to be Perceived Credibility consistent in measuring the latent/construct varia- 0.196 0.195 0.065 3.011 (PC) -> The ble that is measured so that it can be used in further Attitude (ATT) analysis. The Attitude (ATT) -> Be- 0.690 0.692 0.028 24.463 Inner model havioral Inten- tion (BI) This test is used to evaluate the relationship be- tween latent constructs. Based on the PLS output, the following image is obtained: Based on the table, information can be obtained that the Benefit Perception has a significant influ- ence on the Attitude of Use, because the statistical T value of 2.297 which means greater than 1.96. Per- ceived Ease of Use has a significant effect on Atti- tude of Use, because the statistical T value is 9.935 which means it is greater than 1.96. The Perceived Credibility has a significant influence on the Atti- Based on the results of the analysis of inner tude of Use, because the statistical T value is 3.011, weightabove shows that the Attitude of Use is in- which means it is greater than 1.96. The attitude of fluenced by the Perceived Usefulness, Perceived use has a significant effect on the intention to reuse, Ease of Use, Perceived Credibility, while the Be- because the statistical T value is 24.463 which havioral Intention is influenced by the Attitude of means it is greater than 1.96. Use shown in the following equation: Model Structural Test ATT = 0,166 PU + 0,462 PEU + 0.196 PC The results of the acquisition of R-square on PLS BI = 0.690 ATT output as described below: Based on the results of the R-square value above, it Construct R-Square is known that the independent variable of Per- Perceived Usefulness (PU) ceived Usefulness, Perceived Ease of Use, Perceived Perceived Ease of Use (PEU) credibility influencing the Attitude of Usage varia- Perceived Creadibility (PC) ble has a value of R2 of 0.512 which indicates that The Attitude (ATT) 0.512 the "Moderate" model. While the Usage Attitude Behavioral Intention (BI) 0.476 variable that influences the Behavioral Intention variable in the structural model has an R2 value of Based on the results of the R-square value in the 0.476 which indicates that the "Moderate" model. above table, it is known that the independent vari- The suitability of the structural model can be seen able of Perceived Usefulness, Perceived Ease of from Q2, as follows: Use, Perceived Credibility that affect the variable of Q2 = 1 – [(1 – R1)*(1 – R2)] Attitude of use has an R2 value of 0.512, indicating = 1 – [(1 – 0,512)*(1 – 0,476)] that the "Moderate" model. While the attitude of = 1 – [(0,488)*(0,524)] use variable that affects the behavioral intention = 1 - [0,256] variable in the structural model has an R2 value of = 0,744 0.476 which indicates that the "Moderate" model. Hypothesis Test The suitability of the structural model can be seen The following are the results of testing the hypoth- from Q2, as follows: esis, which can be observed from the t-statistic val- Q2 = 1 – [(1 – R1)*(1 – R2)] ue. = 1 – [(1 – 0,512)*(1 – 0,476)] Origi- Sam- Standard T Statis- = 1 – [(0,488)*(0,524)] nal ple Devia- tics (|O/ = 1 - [0,256] Sample Mean tion STDEV| = 0,744 (O) (M) (STDEV) ) Perceived Usefulness 5. CONCLUSION, IMPLICATION, SUGGES- 0.166 0.169 0.072 2.297 (PU) -> The TION, AND LIMITATIONS Attitude (ATT) Perceived Ease of Use (PEU) - 1. The Perceived Usefulness influences Attitude of 0.462 0.461 0.046 9.935 > The Attitude Use, so that the first hypothesis in this study which (ATT) reads "Perceived usefulness influences attitude of
53 use on the BPJS Ketenagakerjaan", otherwise ac- Store)”. Jurnal Manajemen Pemasaran Petra. 3 (1) : cepted. 1-10. 2. The Perceived Ease of Use affects the Attitude of Hovland, C.I., Janis, I.L. and Kelley, H.H. 1968. Use, so that the second hypothesis in this study “Communication and Persuasion”. Audio-Visual which reads "Perceived ease of use affects the atti- Communication Review, 2, 135-142. tude of use on the BPJS Ketenagakerjaan", other- Ikechukwu,F.A., Daubry, M.P., Chijindu, I. wise accepted. 2012. “Consumer attitude: some reflections on 3. The Perceived Credibility influences the Attitude itsconcept, trilogy, relationship with consumer be- of Use, so the third hypothesis in this study which havior, and marketing implications”. European reads "Perceived Credibility influences the attitude Journal of Business and Management, 4, 38-51. of use on the BPJS Ketenagakerjaan", otherwise Irmadhani dan Mahendra A. N. 2011. accepted. “Pengaruh Persepsi Kebermanfaatan, Persepsi 4. The attitude of use affects the Behavioral Inten- Kemudahan Penggunaan dan Computer Self Efica- tion, so that the fourth hypothesis in this study that cy, Terhadap Penggunaan Online Banking pada reads "The attitude of use affects the Behavioral Mahasiswa S1 Fakultas Ekonomi Universitas Intention on the BPJS Ketenagakerjaan", otherwise Negeri Yogyakarta”. Jurnal Universitas Negeri accepted. Yogyakarta. 1 (3). 1-20. Istiarni, P. R. D., dan P. B. Hadiprajitno. 2014. REFERENCES “Analisis Pengaruh Persepsi Manfaat, Kemudahan Adamson, I., & Shine. J. 2003. “Extending the Penggunaan Dan Kredibilitas Terhadap Niat New Technology Acceptance Model to Measure the Menggunakan kembali Internet Banking Dengan End User Information Systems Statisfaction in A Sikap Penggunaan Sebagai Variabel Intervening”. Mandatory Environment: A Bank’s Treasury”. Diponegoro Journal Of Accounting 3 (2) : 1-10. Technology Analysis & Strategic Management. 15 Jogiyanto, 2007. Sistem Informasi Keper- (4) : 441-455. ilakuan. Edisi Revisi. Yogyakarta: Andi. Azwar, S. 2010. Sikap Manusia Teori dan Pen- Juniwati. 2014. “Influence of Perceived Useful- gukurannya. Yogyakarta: Pustaka. Pelajar. ness, Ease of Use, Risk on Attitude and Intention to Bitner, M. J. dan Zeithaml, V. A., 2003, Service Shop Online”. European Journal of Business and Marketing (3rd ed.), Tata McGraw. Hill, New Del- Management 6 (27) : 218-229. hi. Karnadjaja, C. C., Tulipa, D., dan R. S. H. Cho, Y. C. 2015. “Exploring Factors That Affect Lukito. 2017. “Pengaruh Persepsi Risiko, Manfaat, Usefulness, Ease Of Use, Trust, And Purchase In- dan Kemudahan Penggunaan terhadap Niat Bel- tention In The Online Environment”. International anja Online melalui Kepercayaan dan Sikap pada Journal of Management & Information Systems – Konsumen Zalora di Surabaya”. Kajian Ilmiah Ma- First Quarter. 19 (1) : 21-36. hasiswa Manajemen (KAMMA). 6 (2) : 116-130 Davis, F. D. 1989. “Perceived Usefulness, Per- Kosasih, E. J., Setianti, Y., dan U. Wahyudin. ceived Ease of Use, and User. Acceptance of Infor- 2017. “Pengaruh Kredibilitas Petugas Terhadap mation Technology”. MIS Quarterly. 13(3):319-340. Sikap Kepatuhan Pasien Tuberkulosis Pada Fitriana, A. 2015. “Analisis TAM Terhadap Pemeriksaan Dahak”. Jurnal Kajian Komunikasi. 5 Faktor-Faktor yang Mempengaruhi Nasabah (1) : 1-10. Menggunakan Layanan Internet Banking BCA”. Kotler P., and K. L. Keller. 2012. Marketing CSRID Journal. 7 (3) : 135-144. Management 14th edition. Jakarta:PT. Indeks Ke- Ghozali, I. 2014. Structural Equation Modeling, lompok Gramedia. Metode Alternatif dengan. Partial Least Square Luarn, P. and Lin, H.H. 2005. “Toward an Un- (PLS). Edisi 4. Semarang : Badan Penerbit Universi- derstanding of the Behavioral Intention to Use Mo- tas. bile Banking”. Computers in Human Behavior, 21, Greatorex, M., Mitchell, V.W., 1994. Modelling 873-891. consumer risk reduction prefer-ences from per- Nasution, M. N. 2004. Manajemen Jasa ceived loss data. Journal of Economic Psychology Terpadu. Bogor: Ghalia Indonesia 15 (4), 669–685. Nikita. 2015. “The Impact of Attitude, Subjec- Haryono, S., Karina, R., dan M. R. Brahmana. tive Norm, Perceived Behavioral Control, Trust, 2015. “Pengaruh Shopping Orientation, Social In- Perceived Benefit and Perceived Risk toward fluence, dan System terhadap Costumer Attitude KlikBCA Usage Intention in Surabaya”. iBuss Man- melalui Perceived Ease Of Use (Studi pada Apple agement 3 (2) : 295-303
54 Oroh, C. R., dan F. S. Rumokoy. 2015. “The In- ness, Perceived Ease of Use and Perceived Compat- fluence Of Perceived Ease Of Use, Perceived Use- ibility on Intention to Use E-Marketing”. Journal of fulness And Trust On Repurchase Intention Of Lion Management Research. 6 (3) : 1-14. Air E-Ticket”. Jurnal EMBA 3 (3) : 950-958. Tan, Alexis S. 1981. Mass communication theo- Rakhmat, J. 2008. Psikologi Komunikasi. Ban- ries and Research. Columbus : Grid Publishing dung: Remaja Rosdakarya Thompson, R.L., & Higgins, C.A. 1991. “Per- Sa’idah, N. 2017. “Analisis Penggunaan Sistem sonal Computing: Toward a Conceptual Model of Pendaftaran Online (E-Health) Berdasarkan Unified Utilization.” MIS Quarterly, 15(1), 125-143. Theory Of Accepptance And Use Of Technology UU No. 24 Tahun 2011 tentang BPJS (Utaut)”. Jurnal Administrasi Kesehatan Indonesia Wang, Y.S, Wang Y,M, Lin, H.H., and Tang, T. 5 (1) : 72-81. I. 2003. “Determinant sofuser acceptance of internet Sekaran, U. 2011. Research Methods For Busi- banking: Anempirical Study”. International journal ness (Metode Penelitian Untuk. Bisnis). Jakarta: of Service Industry management (onlinejournal Salemba Empat. from Proquest), 14, (5), pg.501 Shomad, A. C., & Purnomosidhi, B. 2012. Wibowo. 2008. Manajemen Kinerja. Jakarta. “Pengaruh Kepercayaan, Persepsi Kegunaan, Per- Penerbit: Rajagrafindo Persada. sepsi Kemudahan, dan Persepsi Risiko Terhadap Widodo, A., dan A. S. A. Putri. 2017. Perilaku Penggunaan E-Commerce”. Jurnal Ilmiah “Pengaruh Persepsi Kegunaan Dan Persepsi Mahasiswa FEB, 1 (2). Kemudahan Penggunaanterhadap Sikap Slameto. 2010. Belajar dan Faktor yang Penggunaan Teknologi Pada Pengguna Instagram mempengaruhinya. Jakarta: Rineka. Cipta. Di Indonesia (Studi pada Followers Akun Kemen- Sugiyono. 2014. Metode Penelitian Kuantitatif, terian Pariwisata @indtravel)”. Jurnal Sekretaris & Kualitatif, dan Kombinasi (Mixed Methods). Ban- Administrasi Bisnis | JSAB I (1) : 18-26. dung : Alfabeta Yani, E., Amalia, H., Fitria, A., dan A. Puspita. Sugiyono. 2016. Metode Penelitian Kuantitatif, 2018. “Pengaruh Internet Banking Terhadap Niat Kualitatif dan R&D. Bandung: PT Alfabet. Nasabah Dalam Bertransaksi Dengan Technology Suwanno, N., & A. Jareenvongrayab. 2014. “Ef- Acceptance Model”. Jurnal Informatika, 5 (1) : 34- fects of Attitude toward Using, Perceived Useful- 42.
55 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
Benefits and Risk Perception of User Financial Technology Sat- isfaction and Trust in Indonesia: Literature Review and Proposed Model Literature Review and Proposed Model
Bachtiar Eka Kaca Sungkana1, Yudi Sutarso2, and Tjahjani Prawitowati3
1 STIE Perbanas Surabaya, Nginden Semolo 34-36 Street, Sukolilo, Surabaya, 60118, East Java, Indonesia 2 STIE Perbanas Surabaya, Nginden Semolo 34-36 Street, Sukolilo, Surabaya, 60118, East Java, Indonesia 3 STIE Perbanas Surabaya, Nginden Semolo 34-36 Street, Sukolilo, Surabaya, 60118, East Java, Indonesia
ARTICLE INFO ABSTRACT ←11 Article history: Financial Technology (Fintech) is an innovation of current financial system. In Received Indonesia, there are 113 companies offering fintech services and have been registered Revised by government. In fintech operation, there are still abuses of these technological Accepted advancements, such as data tapping and misuse of customer databases. Based on these conditions, this study aims to analyze the effects of benefits and types of risks - JEL Classification: privacy risk, social risk, security risk, and financial risk- on customer trust and satisfaction. The study of users benefits of fintech is measured by the risks percep- tion. Financial risk is a risk resulting financial losses of consumer. Social risk is a Key words: risk from lack of acceptance by consumers in the community. Privacy risk is loss of Perceived benefit, Risk, Trust, Satisfac- personal data disclosure as results of transactions activities. Security risk is more on tion, financial technology. the level of security in the transaction affecting to personal survival. Therefore, this study propose a conceptual model of user satisfaction and trust in terms of percep- DOI: 10.6084/m9.figshare.9812210 tions of risks and benefits existed in Fintech ABSTRAK
Financial Technology atau biasa disebut dengan Fintech merupakan sebuah inovasi dari sistem keuangan saat ini. Total perusahaan yang menerapkan layanan fintech dan terdaftar di lembaga pemerintah saat ini sebanyak 113 perusahaan, dan dalam penera- pannya masih ada penyalahgunaan atas kemajuan teknologi ini seperti halnya penya- dapan data, penyalahgunaan database nasabah dan lain sebagainya. Memperhatikan kondisi tersebut maka penelitian ini bertujuan untuk menganalisa seberapa besar pengaruh manfaat yang dirasakan oleh Pengguna dengan melihat berbagai macam Risiko yaitu Risiko Privasi, Risiko sosial, Risiko Keamanan, dan Risiko Finansial. Penelitian ini Mengukur dan menganalisis tingkat kepuasan dan kepercayaan kon- sumen terhadap perusahaan Fintech di indonesia. Kajian tentang manfaat atau sisi positif dari sebuah inovasi Fintech di Indonesia yang dirasakan oleh pengguna, diukur melalui persepsi risiko yang meliputi Risiko Finansial yaitu Risiko yang mengakibat- kan kerugian dari sektor keuangan konsumen, Risiko Sosial yang mengakibatkan kerugian dari sektor sosial konsumen berupa kurang diterimanya konsumen diling- kungan masyarakat, Risiko Privasi yaitu kerugian atas pengungkapan data pribadi atas hasil transaksi yang dilakukan, Risiko Keamanan lebih pada tingkat keamanan dalam bertransaksi yang berdampak atas kelangsungan hidup secara pribadi. kajian ini menghasilkan model konseptual kepuasan dan kepercayaan pengguna ditinjau dari persepsi risiko dan manfaat yang ada pada Fintech.
1. INTRODUCTION nology to a make profits from people who don ' t Technology created and developed for simplify understand its technology. One of the technology human’s life. Technological Also developments sectors which is aggressively innovating in Indone- give made-grow a gap for crime. Some people who sia is the financial sector, or commonly referred to do not have the responsibility Often use the tech- as Financial Technology (Fintech). According to
* Bachtiar Eka Kaca Sungkana1, Yudi Sutarso2, and Tjahjani Prawitowati3, email address: 1 [email protected], 2 [email protected], 3 [email protected], The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
Bank Indonesia (https://www.bi.go.id) Fintech is (https://id.techinasia.com/akulaku) that Aku- the result of a combination of financial services and laku's online loan startup can get ten million cus- technology that has finally changed the business tomers in two years. The rapid growth of customers model from conventional to moderate, which ini- owned by Akulaku does not mean that Akulaku tially had to pay face to face and bring some cash, customers do not have problems. Some negative now can make long distance transactions by mak- reports have emerged such as the Akulaku account ing payments that can be done in seconds. Some burglary, impolite billing methods, and theft of legal bases governing Fintech: First, Bank Indonesia contact data on the cellular phone as revealed on Regulation No. 18/40 / PBI / 2016 concerning the the Consumer Media website on November 4, 2017 Implementation of Payment Transaction Pro- (https://mediakonsumen.com). cessing, the second Bank Indonesia Circular No. This study discussed about the benefits and 18/22 / DKSP regarding the Implementation of various impacts of risk on consumer satisfaction Digital Financial Services, and the three Bank Indo- mediated by the factors of consumer confidence in nesia Regulations No. 18/17 / PBI / 2016 concern- Fintech services in Indonesia. The benefits of a ing Electronic Money product / service are needed in providing products Akulaku is one of the largest online Fintech in or services to customers. Technology-supported the Southeast Asian market which includes Indone- services can be said to be beneficial if they provide sia, Malaysia, Vietnam and the Philippines. I am benefits to the customer and provide a sense of the application that is engaged in the business web security, comfort and risk. Based on that back- portal and the platform of digital commercial pur- ground, the authors formulate the problem as fol- poses (marketplace) which has been registered as lows: the organizers of the electronic system in the Minis- 1. Does Social Risk have a positive effect on the try of Communication and Information of the Re- satisfaction of users of Fintech Akulaku? public of Indonesia through the Electronic System 2. Does Privacy Risk positively influence Registration Certificate No.00262 / DJAI.PSE / Fintech Am I a user satisfaction? 04/2017 dated April 28, 2017 on behalf of PT. Aku- 3. Does Privacy Risk have a positive effect on laku Indonesia Silver r and also listed on the in- the users trust of Fintech Akulaku? vestment registration letter which was approved by 4. Do the benefits have a positive effect on the the Investment Coordinating Board (BKPM) with a user trust of Fintech Akulaku? letter number 1293/1 / IU / PMA / 2018. In carry- 5. Does the security risk have a positive effect ing out financing / credit activities, Akulaku uses on the users trust of Fintech Akulaku? one of our affiliated companies, namely PT. Aku- 6. Does Safety Risk positively affect the satis- laku Finance Indonesia, a registered finance com- faction of users of Fintech Akulaku? pany that has an official business license from the 7. Does Financial Risk positively affect the us- Financial Services Authority (OJK) with Registered er’s satisfaction of Fintech Akulaku? Evidence No.KEP-436 / NB.11 / 2018. here Aku- 8. Does Trust have a positive effect on users’ laku helps to facilitate consumer spending by way satisfaction of Fintech Akulaku? of credit, allowing consumers to shop anywhere without worrying about cash flow. I have a vision 2. THEORETICAL FRAMEWORK, LITERATURE to realize a cashless society by using credit in the REVIEW, DISCUSSION AND HYPOTHESES Southeast Asian market (https://www.akulaku.com/about). Satisfaction The news is shown by Customer satisfaction is seen as the result of a com- (https://ekbis.sindonews.com/read) LBH (Legal parison between consumption, expectations and Aid) has stated that there were 1,330 people who experience and customer satisfaction is achieved in are victims of Fintech peer to peer lending or com- the result (ie, experience) meets expectations monly called the loan online. In this case there is a (Khristianto et al. 2012 in Urvashi Tandon Ravi lot of customer recognition to LBH regarding cus- Kiran Ash N. Sah 2017). In this case customer satis- tomers who are intimidated when the online loan faction was an important role in making decisions provider collects. In addition, the customer also for buyers, causing repeated purchases or repeated claimed that the loan interest charged was too large use of services. Consumers will feel satisfied when and the online loan provider had spread the cus- their expectations are met in using services or buy- tomer's personal data to several parties so that the ing products, products or services that are used in customer felt humiliated. According to the news accordance with the expectations in mind before
57 buying the product (Guo et al., 2012 in Urvashi used as a complement to his life but will turn Tandon et al 2017) also explains that Satisfied early around if consumers already understand that the customers in a service business is the key factor to product or service does not provide benefits to its profitability which satisfied consumers are more life then consumers will not trust the product or likely to buy back a lot more in the future than dis- service so that consumers are reluctant to use it. satisfied customers. Therefore, assessing and main- Quoted from the literature review Indicators to taining customer satisfaction is very important, measure Perceived Benefits refer to a research particularly for business technology services, that’s study conducted by Mohammad Hamdi Al improving business performance and increasing Khasawneh et al (2018), namely: intensity to the satisfaction of consumers, service 1. Using Fintech can save time providers must have a comprehensive understand- 2. Using Fintech Get investment opportunities ing and a deep understanding of the antecedents 3. Using Fintech can save costs Customer satisfaction in the use of Fintech services. The proposed hypothesis is as follows: Indicators to measure Satisfactiom refer to a re- H4: The perceived benefits have a positive effect on the search study conducted by Wajeeha Aslam et al Trust of Fifech Akulaku Users (2018), namely: Trust a. Using Fintech is a wise choice Trust has been studied in various disciplines. One b. Using Fintech correctly. of the many results has been presented by many c. Overall the y feels satisfied in using Fintech. scholarly studies are relevant Mayer, Davis, and d. Fintech has fulfilled expectations Shoorman (1995, pages: 712) in Jungkun Park et al (2018) which defines trust as "Mo Diaan a party to Perceived benefits be easily accepted by the actions of other Besides G. Kim, Shin, and Lee (2009) in Jungkun Park, that (Rempel, Holmes, & Zanna, 1985; Rotter, 1980 Eklou amendah, Hyowon Younghee Lee and Hyun in Jungkun Park et al 2018) Trust shows positive (2018) explained that the perceived benefits from beliefs about reliability, dependability, and self- mobility technology that provide flexibility and the confidence felt in a person, object, or process, in this convenience will positively influence great confi- case it can be said that the concept of trust is the dence. A study by Sayid and Echchabi (2013) in result of interpretation that there are positive be- Mohammad Hamdi Al Khasawneh, Omar Hujran liefs behind consumers about reliability, and the and Tariq Abdrabb (2018) analyzed the feelings of dependence that is felt in consumers about the ob- Somali consumers in using mobile banking. The ject of the product or service that has been used. results showed that ease of use is expected to have and Abdullah in 2008 in Wajeeha Aslam, Imtiaz a large influence on the perceived benefits of this Arif, Farhatc and Marium Kashif Khursheed 2018) type of banking service. Besides According to Kim explains that customer satisfaction and increasing (2009) in Mohammed Hamdi Al-Khasawneh, Omar customer loyalty when customers are trusting the Hujran and Tariq Abdrabb (2018) says that benefits service provider On the other hand if a mop is not were defined as the degree of difference between trust the service provider is then customer was not innovation and its predecessor thus can be inter- satisfied satisfied early in using of the service pro- preted that the perceived benefits of facilitating the viders. The theory of reasoned action also suggests relationship between ease of use and user attitude that trust leads to satisfaction which in turn will so that users feel helped in all aspects of their activ- increase consumer loyalty. Besides that, Sfenrianto, ities and users feel that there is a benefit for what Tendi Wijaya and Gunawan Wang (2017) also ex- they use. Furthermore Kim (2009) and Susanto et al. plained that the determinants of customer satisfac- (2013) in Mohammad Hamdi Al Khasawneh et al tion through online shopping are Trust, website (2018) explained that the perceived benefits can design, financial security, comfort, guarantee, relia- facilitate the relationship between the ease of use bility, information, variety of merchandise, user and the attitude of users and find that the relative convenience and usefulness. perceived, entertain- benefits (perceived benefits) also have a significant ment, speed, response time, and transaction ability. and positive influence on the customer's initial trust So that trust has a close relationship with one's sat- from this it can be interpreted that a product or isfaction in using products or services. Indicators to service used by consumers provides little or many measure trust refer to a research study conducted benefits that will make consumers think positively by Jungkun Park et al (2018), namely: so that consumers trust the product / service to be 1. Reliable Fintech payment system
58 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
2. Fintech payment system is safe that personal information can be disclosed to other 3. The Fintech payment system can be trusted companies or to cross sell other banking products. 4. Trust the Fintech payment system Several studies have examined the impact of priva- 5. Fintech does the job correctly cy risks on mobile adoption and online banking. The proposed hypothesis is as follows: Priya and Raj (2015) in Mohammad Hamdi Al H 8: Trust has a positive effect on Fintech user satisfac- Khasawneh et al (2018) investigated the effects of tion risk factors on the use of mobile banking in India. Their research findings show that privacy and se- Social Risk curity risks determine the use of mobile banking in According to Tatik Suryani (2013: 86) Social Risk is India. Jalal et al. (2011) in the Hamdi Mohammad the risk due to product purchases in the form of Al Khasawneh et al (2018) examined the specific lack of acceptance by consumers in the community factors that affect consumer intentions to use Inter- besides Featherman and Pavlou (2003) in Urvashi net banking in Bahrain. One of their research re- Tandon (2018) Social risk is the potential loss of sults shows that credibility factors such as privacy status in social groups, as a result of adopting a and security are the main sources of dissatisfaction product or service. Social risk reflects a potential for service users in this context, so privacy data is a loss of status in social groups where it is a result of credible thing that must be maintained and main- using a product or service. Findings Featherman tained properly should not be disclosed to the pub- and Pavlou (2003) and Thakur and Srivastava lic when something that is credible maintained then (2015) in Urvashi Tandon (2018) says that support- people will trust it so that the risk of privacy is very ed it less individual contact with the sales execu- closely related to customer satisfaction and trust. tive, practically no interaction and social contact Indicators to measure Privacy Risk refer to a re- with other people as well as the loss of privacy of search study conducted by Urvashi Tandon (2018), people makes people not want to shop online with namely: this, the interaction and social contact where there 1. Online shopping email addresses can be misused are various social risks will have an impact on the by others satisfaction of someone to use a product or service 2. Phone numbers may be misused by others so that consumers or customers are satisfied there 3. Personal information can be disclosed to others is a desire to repurchase the product or service. 4. Bank card information might have been stolen by Indicators to measure Social Risk refer to a research someone else study conducted by Urvashi Tandon (2018), name- ly: The proposed hypothesis is as follows: 1. Products purchased can cause family disapprov- H2: Privacy Risks impact positively on Fintech's user al satisfaction 2. Shopping online can affect the image H3: Privacy risk positively influences the trust of 3. Online products may not be recognized by rela- Fintech users tives or friends The proposed hypothesis is as follows: H1: Social risks have a negative impact on Fintech user Security Risk satisfaction According to Thakur and Srivastava (2015); Tandon et al. (2015); Guo et al. (2012); Kolsaker and Payne Privacy Risk (2002) in Urvashi Tandon (2018) Security risk refers Featherman and Pavlou (2003) in Urvashi Tandon to the perception of security regarding ways of (2018) Privacy risk is the possibility of having per- payment and the mechanism for storing security as sonal information disclosed as a result of online an important aspect in analyzing attitudes. The transactions. Privacy Risk is the disclosure of per- operational definition of security risk is the re- sonal information that we have publicly disclosed spondent's opinion about the level of security in of our activities in using services or products that conducting a transaction for a service or product will cause the misuse of personal data by others. where it will have an impact on the personal must According to Aldás-Manzano et al. (2009) in Mo- or financially. Koenig-Lewis et al. (2010) in Mo- hammad Hamdi Al Khasa Wneh et al (2018) de- hammad Hamdi Al Khasawneh et al (2018) defines scribes the problem of privacy in banks as a level of security risk in M-banking services as customer consumer concern about the possibility that cus- anxiety that their money might be transferred to tomer privacy might be violated, and the possibility third parties without their further knowledge Ak-
59 turan and Tezcan (2012) in Mohammad Hamdi Al Financial Risk (Financial) Khasawneh et al ((2018) states that the security According to Featherman and Pavlou (2003); risks involve; the possibility of loss of control over Ueltschy et al. (2004) in Urvashi Tandon (2018) Fi- transactions and financial information. According nancial risk is the potential for monetary losses to Mohammed Hamdi Al-Khasawneh (2018) Secu- from initial product purchases and subsequent rity risks do not have a significant relationship with maintenance of people. the size of the monetary perceived risks so people were satisfied in making loss of purchasing products or services used in transactions due to the possibilities of the COD which the loss is felt from the beginning to the end system as a means of payment which has signifi- of using services or products. Furthermore, accord- cantly reduced concerns among Indians about pos- ing to Tatik Suryani (2013: 86) financial risk Risks sible theft related to credit / debit card details In that result in losses from financial aspects that will this case it can be said that security risks have an be experienced by consumers. The results are con- impact on customer satisfaction looking at the con- ducted by Muhammad Hamdi al typicalawneh et al text and various other inherent systems. A study by (2018) confirms that financial risks that include fear Islam (2014) reviewing the security issues of mobile of being overcharged, fears of losing money and banking and payment systems found that mobile disclosing debit / credit card information have a banking customers worry about security when us- negative impact on customer satisfaction. This is ing their cellphones to manage Banking and finan- compatible with the findings of Masoud (2013) in cial transactions may not be as real as they feel In Muhammad Hamdi al typicalawneh et al (2018), practice, initial consumer trust in organizations and where financial risk arises as a major deterrent to institutions can help to reduce their total perceived online transactions. It can be explained that finan- risk while increasing trust to use it repeatedly cial risk is binding on customer satisfaction because (Yang et al., 2015 in Francisco et al. 2018). Indicators customers are satisfied if they imagine and some of to measure Security Risk refer to a research study the worries, they feel do not occur so that financial conducted by Urvashi Tandon (2018), namely: risk greatly affects customer satisfaction. Indicators 1. The Fintech Akulaku payment system is reliable. to measure Financial Risk refer to a research study 2. Fintech Akulaku payment system is safe. conducted by Urvashi Tandon (2018), namely: 3. Fintech Akulaku payment system can be trusted. a. When shopping online, debit / credit card in- 4. Trust the payment system Fintech Akulaku. formation can be stolen by others 5. Fintech Akulaku does the job correctly b. Possibly overcharged for Fintech transactions The proposed hypothesis is as follows: c. Can't trust Fintech H5: Security Risk positively influences the Trust of The proposed hypothesis is as follows: Fintech users. H7: Financial risks negatively affect the satisfaction of H6: Security Risk positively influences the satisfaction of users of Fintech Akulaku. Fintech users.
Research Framework From the results of the theoretical and problem, the current research framework is as follows:
Social Risk Risiko privasi
H1 + H2 + H3 +
Perceived Trust Satisfaction Benefit H4+ H8+
H5 + H6 +
Security Risk H7 +
Financial Risk Figure 1.1 RESEARCHER FRAMEWORK
60 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
3. RESEARCH METHOD REFERENCES This study is based on a conceptual model of user satisfaction and trust in terms of the pressures Francisco Liébana-Cabanillas, Elena Higueras- of the risks and benefits of Fintech. This study pro- Castillo, Sebastián Molinillo dan Miguel Ruiz duces a conceptual model of user satisfaction and Montañez. 2018. “Assesing the role of risk and trust in the terms of the Perceptions of Risks and trust in consumers’ adoption of online pay- Benefits that exist at Fintech. According to previous ment systems”, International Journal of Infor- literature, researchers have found several factors mation Systems and Software Engineering for that influence consumer satisfaction. The reference Big Companies, Vol. 5, No. 2, pp. 99-113 was taken from the study of several marketing Jungkun Park, Eklou Amendah, Younghee Lee, books and journals. Therefore, to understand the Hyowon Hyun. 2018. “M-payment service: In- factors that influence consumer satisfaction as seen terplay of perceived risk, benefit, and trust in from the benefits as well as the various impacts of service adoption”. Human Factors and Ergo- risk, secondary data are collected, compared and nomics in Manufacturing & Service Industries, analyzed. Vol. 29, Issue 1, pp. 31-43 Khristianto, Wheny, dan Imam Suyadi. 2012. "The 4. SUMMARY influence of information, system, and service In this study explains that the benefits to facilitate on customer satisfaction and loyalty in online the relationship between ease of use and user atti- shopping of Forum Jual Beli KASKUS. US, tude. find that the relative benefits (i.e. benefits) MALANG REGION." International Journal of have an influence on customer trust from this can Academic Research Vol 4. Issue 2 be interpreted that a product or service used by Mohammad Hamdi Al Khasawneh, Omar Hujran consumers provides little or many benefits that will dan Tariq Abdrabbo. 2018. “A quantitative ex- make consumers think positively so consumers amination of the factors that influence users’ trust the product or service to be used as a com- perceptions of trust towards using mobile plement to his life but will turn around if consum- banking services”, Int. J. Internet Marketing ers already understand that the product or service and Advertising, Vol. 12, No. 2, pp. 181-207 does not provide benefits to his life then consumers Mohamad Noorman Masrek, Muhammad Syafiq will not trust the product or service so that con- Abdul Halim, Asad Khan, dan Ishak Ramli. sumers are reluctant to use it. 2018. “The Impact of Perceived Credibility Financial risk is binding on customer satisfaction And Perceived Quality On Trust And Satisfac- because customers are satisfied when they fear they tion In Mobile Banking Context”. Asian Eco- imagine and some of the concerns they feel will not nomic and Financial Review, Vol. 8, No 7, pp. occur so that Financial Risk greatly impairs cus- 1013-1025 tomers' satisfaction. The lack of individual contacts Pavlou, Paul A. 2003 "Consumer acceptance of elec- and social contacts with other people as well as the tronic commerce: Integrating trust and risk loss of privacy of the people do not want to make a with the technology acceptance model." Inter- purchase or use a product or service with these national journal of electronic commerce, Vol. 7, interactions and social contacts where there are No 3, pp. 101-134. various social risks that will have an impact on the Sfenrianto Sfenrianto, Tendi Wijaya dan Gunawan satisfaction of a person to use the product or those Wang. 2018. “Assessing the Buyer Trust and services further that risk the privacy and security of Satisfaction Factors in the E-Marketplace, Jour- determining a level of credibility as to maintain the nal of Theoretical and Applied Electronic privacy and security is the priority source to de- Commerce Research Vol. 13, Issue 2, pp. 43-57 termine this context, the d or privacy is something Tatik Suryani, 2013, “Perilaku konsumen di era credible that must be preserved and properly main- internet implikasi pada strategi pemasaran”. tained should not be revealed to the general public Cetakan pertama: Graha Ilmu. when a credible thing is maintained then people Thanh D. Nguyen, Phuc A. Huynh. 2018. “The will believe it , so that the risk of privacy is very Roles of Perceived Risk and Trust on E– closely related to customer trust and satisfaction for Payment Adoption”, Econometrics for Finan- Fintech services. cial Applications, Vol. 760, pp. 926-940 Urvashi Tandon, Ravi Kiran dan Ash N. Sah. 2018. “The influence of website functionality, driv-
61 ers and perceived risk on customer satisfaction (https://mediakonsumen.com) accessed on Febru- in online shopping: an emerging economy ary 1, 2019 case”, Information Systems and e-Business (https://sukabumiupdate.com/) accessed on Feb- Management, Vol. 16, Issue 1, pp. 57-91 ruary 1, 2019 Wajeeha Aslama, Imtiaz Arifb, Kashif Farhatc, (https://news.detik.com/) accessed on February 1, Marium Khursheedd. 2018. “The Role of Cus- 2019 tomer Trust, Service Quality And Value Di- (https://ekbis.sindonews.com/read/) accessed on mensions In Determining Satisfaction And February 1, 2019 Loyalty: An Empirical Study of mobile Tele- (https://www.cnbcindonesia.com) accessed on comunication Industry In Pakistan”. Market February 1, 2019 Trizte, Vol. 30, No 2, pp. 177-194 (https://www.akulaku.com/about) accessed on February 1, 2019 (https://www.change.org/p/) accessed on Febru- (https://mediakonsumen.com) accessed on Febru- ary 1, 2019 ary 1, 2019 (https://www.bi.go.id) accessed on February 1, (https://id.techinasia.com) accessed on February 1, 2019 2019
62 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
Study of Demographic Factors and Financial Literation and its Effect on Individual Investment Decision in Generation X and Generation Y
Valendy Pradita1, Lestari Wiwik2
1 STIE Perbanas Surabaya, Nginden Semolo 34-36 Street, Sukolilo, Surabaya, 60118, East Java, Indonesia 2 STIE Perbanas Surabaya, Nginden Semolo 34-36 Street, Sukolilo, Surabaya, 60118, East Java, Indonesia
ARTICLE INFO ABSTRACT ←11 Article history: Individual investment decision behaviors are strongly influenced by factors Received including demographics and financial literacy levels. The changing times Revised such as technology developments, education levels, and income levels affect Accepted the difference of financial literacy levels between millennials and the
JEL Classification: previous ones. This study is aims to examine and analyze the influence of genders, education level, income level, investment experience, financial knowledge, financial behavior, and financial attitudes towards individual Keywords: Financial Literacy, investment decisions generations X and Y. In this study it is explained that Demographic Factors, Individual the benefits for investment decisions are to know the levels of financial Investment Decisions literacy owned and as a material consideration in determining investment decisions wisely. DOI: 10.6084/m9.figshare.9849122 ABSTRAK
Perilaku pengambilan keputusan investasi seseorang sangat dipengaruhi banyak faktor diantaranya demografi dan tingkat literasi keuangan. Adanya perubahan zaman seperti perkembangan teknologi, tingkat pendidikan, dan tingkat pendapatan mempengaruhi perbedaan tingkat literasi keuangan antara generasi millennial dan generasi sebelumnya. Penelitian ini bertujuan untuk menguji dan menganalisa pengaruh jenis kelamin, tingkat pendidikan, tingkat pendapatan, pengalaman investasi, serta faktor pengetahuan keuangan, perilaku keuangan, dan sikap keuangan terhadap keputusan investasi individu pada generasi x dan generasi y. Dalam kajian ini menjelaskan bahwa manfaat dari keputusan investasi adalah mengetahui tingkat literasi keuangan yang dimiliki dan sebagai bahan pertimbangan untuk menentukan keputusan investasi secara bijak.
1. Introduction resulting in losses. Investments also need to Investment helps people realize their pay attention to the period of placement of future plans and make an additional amount of funds so that they can meet the expected return money through investment returns. In on investment. investing, investors need to pay attention to The phenomenon of changing a three important things that are the basis of person's investment decision making behavior investment decisions, namely return, risk level, that is influenced by age factors along with and time period. Return on investment is a changing times. The influence of technology profit or loss for investors when they have and information on the current generation with invested their funds, both in real assets and previous generations is very different. This financial assets. Investment also has a risk that difference can be seen clearly with the is the possibility of actual investment results difference of the two generations that currently that are different from what is expected dominate the world, namely generation X and
Corresponding author, email address: [email protected]
generation Y. 4. Does the level of income significantly Lutfi (2010) revealed that investor influence individual investment decisions in demographic factors are positively correlated generation X and generation Y? with investor behavior and the type of 5. Does Investment Experience significantly investment chosen. Investors who are in the influence individual investment decisions in type of risk seeking prefer to invest in the generation X and generation Y? capital market, while investors who avoid risk 6. Does financial knowledge have a significant prefer investing in real assets and bank effect on individual investment decisions in accounts. generation X and generation Y? Another study conducted by Ton and 7. Does financial behavior significantly Nguyen (2014) concluded that male gender is influence investment decisions individuals more willing to take risks in investing than in generation X and generation Y? female gender. Then for investors who are 8. Does the financial attitude significantly retiring or elderly, they prefer not to take risks. influence individual investment decisions in Finally, single investors prefer to take higher generation X and generation Y? risks than married investors. For income and education level factors found the similarity of 2. Theoretical Framework, Literature Review, investor behavior in taking risks. Discussion and Hypotheses Oteng (2019) in his research in Ghana proved that knowledge about investing in Generation Theory trading is very weak. Most traders do not According to Kupperschmidt (2000) understand the concepts of liquidity, interest generation is a group that is identified based and inflation, and their implications for the on the year of birth, age, location, and events in decision to take high-risk return and low-risk the lives of groups of individuals who have a return. significant influence in the growth phase. Based on the background above, the Oblinger & Oblinger (2005) grouped authors are interested in conducting research generations into five generations, namely on the influence of gender factors, level of mature generation (<1946), baby boomer education, level of income, marital status, generation (1946-1964), generation X (1965- financial knowledge, financial behavior, and 1981), generation Y or called net generation financial attitudes towards one's investment (1982-1995), and generation post millennial decisions, and analyzing whether there are (<1995). Because the age range is different from differences between the X generation groups one generation to another, it influences their and the generation Y, so this research is behavior, their perspective, and how they entitled "Study of Demographic Factors and obtain or make a decision. Financial Literacy and Its Effects on Individual A Fidelity Investment study in the United Investment Decisions in Generation X and States concluded that generation Y considered Generation Y". themselves more knowledgeable in finance Based on that background, the authors than their previous generation (Fidelity, 2013). formulate the problem as follows: 1. Does gender significantly influence Demographic Factors individual investment decisions in This factor plays an important role in generation X and generation Y? determining the investment decision chosen. 2. Does the level of age have a significant effect The influence of investor demographic factors on individual investment decisions in needs to be considered, because in decision generation X and generation Y? making investment, investors often involve 3. Does the level of education have a more than one individual. Individuals who significant effect on individual investment have different knowledge, expertise and decisions in generation X and generation Y? experience can be involved throughout the
64
process investment, from planning, person's physical condition, psychological supervision, to coordinating investment plans condition and maturity condition. This age (Pratiwi & Prijati, 2015). Some demographic will cause differences in various aspects of factors in this study include gender, age, human life including the way the brain occupation and income. works in thinking. This different way of Based on research conducted by thinking will then be realized in human Fidelity (2013), it was concluded that 55 behavior including in determining percent of Generation Y felt more confident in investment decisions. investing compared to 47 percent of the older Evans (2004), states that the older a generation. About 64 percent of Generation Y person is, the more risk aversion in making has more regular savings habits than 54 investment decisions, and vice versa. This percent of the older generation. happens because as we get older the Ciompi and Jacobs (2016) show that knowledge and experience a person has in most of the X generation prefers advisory or decision making is also higher. This means that financial consultant services to manage their investors with an older age are considered to investment activities. They prefer this type of be more careful in considering the risk and long-term investment as the ultimate goal of return of an investment. Older investors are their retirement savings and strongly avoid considered more mature and not rash in short-term and high-risk investments. determining an investment decision. In this study, researchers used gender, H2: the level of age has a significant effect on age, education, income and investment individual investment decisions in experience as demographic factors that generation X and generation Y. influence investment decisions. c. Education a. Gender Type much research has been The education factor is the level of academic carried out on the effect of sex on investment that determining someone ability and decisions. The study conducted by Barber & knowledge to understand things properly. Odean (2001), provides empirical evidence The higher the level of one's education, it is that men are more willing to take risks in assumed that the person will have better investing. This is supported by research financial knowledge. This knowledge is the conducted by Cooper (2011), quoted in basis for determining an investment Kristanti (2012: 2), which states that women decision. tend to be more careful in investing Lutfi (2010: 3) states that investors, who compared to men. study at least a diploma, invest their funds in Kristanti (2012: 2), which states that the capital market compared to investing in women tend to be more careful in investing bank products or real assets. This is because a compared to men. Which states that men have high level of education is considered to have a higher level of confidence compared to very good knowledge and ability in investing women, so this will affect the investment so that it is able to analyze and calculate the decision-making process? With the evidence risks faced from various studies which state that the level H3: the level of education has a significant of tolerance for risk in women is lower than effect on individual investment decisions men, the authors want to participate and prove in generation X and generation Y. that gender has an influence on investment d. Income decisions. Income is the financial result that paid after H1: gender significantly influence individual someone doing a job in order to meet the investment decisions in generation X and needs of life. generation Y According to Lutfi (2010: 10), investors b. Age who have low incomes tend to be investors Age determining level of life that affects a who avoid risk. This happens because the
65
funds owned by investors with low incomes include knowledge of financial sharing, tend to be used to meet the needs of life rather understanding of the time value of money, than invested in some assets. Mahardika (2017: payment of interest and obtaining return on 4), i.e. investors who have the highest income loans, correct calculation of interest, multiple tend to have a portfolio that is more volatile or interest, risk and return, definition of has a greater risk. inflation and different types of investment H4: Does the level of income significantly (Janor et. al., 2016). influence individual investment decisions Robb & Woodyard (2011) who found in generation X and generation. someone with a good level of financial literacy, e. Investment Experience their financial behavior tends to be better than Demographic factors that influence someone with a lower level of financial subsequent investment decisions are knowledge. investment experience. Utami and Kartini, H6: Financial knowledge have a significant (2016: 2) state that experience or frequency effect on individual investment decisions of investment is thought to be related to in generation X and generation Y. investment decisions. 2. Financial behavior Utami and Kartini (2016: 2) revealed Human behavior and habits about how to that investor confidence increases when they manage their finances, whether they have gain more experience. In line with this opinion, the ability to buy things, pay bills in a timely Pratiwi (2015: 6), also said that the investment manner, monitor routine household experience owned by investors is thought to expenses and shopping preferences, save influence the behavior of investors in investing. and borrow habits, set financial designs, and H5: Investment Experience significantly choose investment and financial products influence individual investment decisions (Janor et. al., 2016). in generation X and generation Y Behavioral finance is the study of how humans interpret and act on information to make Financial Literacy informed investment decisions” This means that According to Andrew and Linawati behavioral finance is a science that studies how (2014: 1), financial literacy can be interpreted as humans react and react to information that is financial knowledge, with the aim of achieving then used to make decisions that can optimize prosperity. Warsono (2010) stated that financial the rate of return decisions investment by literacy is the extent of knowledge and paying attention to the inherent risks (the implementation of a person or society in elements of human attitudes and actions are managing their personal finances. the deciding factors in According to Janor et. al. (2016) there is invest). To understand issues related to the three components of financial literacy, namely financial behavior of each individual, one must financial knowledge, financial behavior, and manage personal finances in one way or financial attitudes. OECD (2005) explains that different ways (Aminatuzzahra, 2014) financial literacy is the combination of H7: Financial behavior significantly influences awareness, knowledge, attitude and behavior investment decisions individuals in which to be needed for making financial generation X and generation Y. decision. 3. Financial attitude 1. Financial knowledge Attitude refers to how a person feels about The level of one's knowledge of financial personal financial problems, as measured by science. Knowledge refers to what responses to a statement or opinion (Marsh, individuals know about personal financial 2006). matters, as measured by their level of Robb & Woodyard, (2011) who argue knowledge about various personal financial that financial knowledge is objective and concepts (Marsh, 2006). These aspects financial beliefs or financial attitudes are
66
subjective resulting in a low level of correlation instruments that can be chosen by individuals, to financial behavior and both have a both in real assets such as land, property and significant impact on financial behavior. The real estate, and gold, as well as financial assets, results of this study are supported by the such as stocks, bonds, certificates of deposit, perspective of financial behavior perspectives and mutual funds. In investing, there are five which in financial decision making factors that influence investment choices, neurologically tends to incorporate influence namely: (emotions) into the process of making decision. 1. Security and risk (security in an investment The better the attitude or financial metal of a means minimal risk of loss) person, the better the financial behavior in 2. Risk factor components (components of risk investment decision making. factors relating to specific investments H8: The financial attitude significantly change over time) influences individual investment 3. Investment income (income in cash and decisions in generation X and generation fixed) Y 4. Investment growth (increase in value - capital gain) Individual Investment Decisions 5. Liquidity (high or low) According to Warsono (2010) in investing, there are currently many Research Framework From the results of the theoretical and problem, the current research framework is as follows:
Gender
Age
Education
Level
Income Level Investment Decision
Investment
Experience
Financial Knowledge
Financial Behavior
Financial Attitude
FIGURE 1.1 RESEARCH FRAMEWORK
67
3. RESEARCH METHOD pp. 95-106, viewed 2 August 2019, < This study is based on a conceptual https://doi.org/10.1108/09590550310461 model of the influence of gender, age, 994>. education level, income level, investment Barber, B & Odean, T 2001, ‘Boys : “Gender, experience, financial knowledge, financial Overconvidence, and Common Stock behavior, and financial attitudes towards Invesment”’, The Quarterly, Jurnal of one's investment decisions, and analyzed economics, Vol. 3, No. 7, pp. 261 – 292. whether there are differences between the X Ciompi, C & Jacobs J 2016, ‘Investable Assets generation and Y generations. According to of Tomorrow: Getting to Know Gen-X previous literature, researchers have found and Millennial Investors’, IMCA several factors that influence investment Investments & Wealth Monitor edisi decisions. Reference is taken from the study November/December 2016, pp. 40-46 of several books and journals. Therefore, to Das, S & Jain, R 2014, ‘A Study on The understand the factors that influence the Influence of Demographical Variables on influence of gender, age, education level, The Factors of Investment- A Perspective income level, investment experience, on The Guwahati Region’, International financial knowledge, financial behavior, and Journal of Research in Humanities, Arts and financial attitude towards one's investment Literature, viewed 20 April 2017, vol. 2, decisions viewed from the benefits, no. 6,
68
Lutfi 2010, ‘The Relationship Between Otoritas Jasa Keuangan 2017, Strategi Nasional Demographic Factors and Investment Literasi Keuangan Indonesia Revisit 2017, Decision in Surabaya’, Journal of Otoritas Jasa Keuangan, Jakarta, viewed Economics, Business and Accountancy 13 August 2019, Ventura, Vol 13, No 3, Pp 213-224, viewed
69
The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
Opininion Mining and Interview to Anlyze Factors Influencing Consumen in Choosing Foundation (Case Study: Female Daily Network's Users)
Silvi Absharina Ainun Fahrizah1
1 Bandung Institute of Technology, Jalan Ganesha 10, Bandung, 40132, West Java, Indonesia
ARTICLE INFO ABSTRACT Article history: The growth of cosmetics industry in Indonesia shows a good increase align Received with country’s thriving number of middle-class consumers in 2017. Cosmet- Revised ics industry reached an impressive growth of 11.99% in 2017. The problem is Accepted local brand foundations are still facing difficulties to compete and gain bigger market share. Big global brands like Unilever still wins overall market share JEL Classification: since they grab 70% market share of Indonesia’s cosmetics market. This re- search aims to find the factors influencing consumers in choosing foundation. This research used opinion mining and in-depth interview to collect the data Key words: from Female Daily Network users opinion. The result indicates that keywords Consumer Behavior, Opinion Min- that have been written by users on Female Daily Platform are appeared to be ing, Interview, Beauty Industry, different with respondent’s relevant keywords from in-depth interview. The Female Daily Network findings of this research are expected to gives an insightful knowledge of
DOI: 10.6084/m9.figshare.9849188 consumers’ preference towards foundation to be useful information generat- ing the right decision making in marketing and new product development.
ABSTRAK Pertumbuhan industri kosmetik di Indonesia menunjukkan peningkatan yang baik sejalan dengan jumlah konsumen kelas menengah yang berkembang pesat di negara ini pada tahun 2017. Industri kosmetik mencoba mencapai pertumbuhan yang mengesankan sebesar 11,99% pada tahun 2017. Masalahnya adalah foundation merek lokal masih menghadapi kesulitan untuk bersaing dan mendapatkan pangsa pasar yang lebih besar. Merek global besar seperti Unilever masih memenangkan pangsa pasar secara keseluruhan karena mereka meraih 70% pangsa pasar pasar kosmetik Indonesia. Penelitian ini bertujuan untuk mengetahui faktor-faktor yang mempengaruhi konsumen dalam memilih foundation. Penelitian ini menggunakan penambangan pendapat dan wawancara mendalam untuk mengumpulkan data dari pendapat pengguna Female Daily Network. Hasilnya menunjukkan bahwa kata kunci yang telah ditulis oleh pengguna di Female Daily Platform tampaknya ber- beda dengan kata kunci yang relevan dari responden dari wawancara mendalam. Temuan penelitian ini diharapkan dapat memberikan pengetahuan mendalam ten- tang preferensi konsumen terhadap yayasan untuk menjadi informasi yang berguna menghasilkan pengambilan keputusan yang tepat dalam pemasaran dan pengem- bangan produk baru.
1. INTRODUCTION dustry’s average annual growth rate in these past six The growth of cosmetics and toiletries industry in Indo- years. For numerical speaking, cosmetics and toiletries nesia shows a good increase align with country’s thriv- industry reached an impressive growth of 11.99% in ing number of middle class and affluent consumers in 2017 with 19 billion rupiah of total sales values. Mean- 2017. It is recorded that the growth of both cosmetics while industry average annual growth rate in the last six and toiletries industry in 2017 is reaching higher number years is around 10% only (Global Business Guide Indo- than the previous year, even if it is compared to the in- nesia, 2018).
Corresponding author, email address: [email protected] Bandung, Sidoarjo, Malang, and Jogja. In fact, 89% of The raise of cosmetics and toiletries industry is not only 210 respondent prefer to choose global brand for their giving impact to global brands. In fact, for personal care foundation rather than local brand. Followed by 131 category, Wardah as Indonesia’s local cosmetics brand respondents said that they are facing difficulties to find has doubled its market share within 5 years (Harvard the perfect shade of local foundation for their skin tone Business Review, 2019). However, big global brands in local cosmetics brands. In total, 77% of 210 respond- like what Unilever and P&G have still wins overall mar- ents prefer purchasing foundation from global brands ket share since they are able to grab approximately 70% such as Maybelline, Loreal, Too Faced, and Estee market share of Indonesia’s cosmetics and toiletries Lauder to local ones like Make Over, Wardah, and Emi- market. On the other hand, Local brands are still facing na (Data refers to Appendix A). difficulties to compete and gain bigger market share (Markplus, 2016). This trend of beauty industry in Indonesia is not only giving spaces for beauty brands. Indonesia’s cosmetics Consumers’ acceptance of imported prod- consumer also provides a big room for digital beauty ucts specifically cosmetics and skincare from other platform in order to fulfill their needs and wants through countries is pretty high. When we talk about im- technology since it is becoming consumers’ best friend ported products from United State such as in seeking for beauty suggestions lately. Responding to Clinique, Estee Lauder, MAC, Revlon, Bath & Body consumers’ needs of digitized beauty information, in 2009 Female Daily Network finally decided to open an Work, and Victoria’s Secret, they are already well online platform. Female Daily is formerly known as positioned in Indonesian market (U.S Department Jakarta based woman community which regularly con- of Commerce, 2016). Premium cosmetics and skin- ducted offline meetups and events. In its beginning, Fe- care product from US, Japan, and France are the male Daily Network provided online threads and forum most popular. In line with that, according to Global that grant users to share their knowledge, opinions, and Data Consumer Survey (US Departement of experiences toward some topics that had been chosen by Commerce, 2016). L’oreal, as world’s one of the moderator. As their number of users exponentially in- biggest cosmetics groups, is currently maintaining creased over time, they decided to add mobile applica- 15 different brands available in Indonesia. L’oreal tion that helped users to gain more specific information as one of the brand under L’oreal group recorded in an easier way. Their mobile application enables users that Indonesia is the fastest growing Asian market to read and give specific review, price, and rating to- for this firm since they captured 30% significant wards makeup, skincare, hair, fragrance, and body prod- ucts. growth of Indonesia’s sales in 2012 (Reuters, 2012).
This brand also observed that Indonesia’s market There are over 465.000 members registered on their has been increasing rapidly in size for the last ten digital platform in total. They are able to grade and give years and shows no sign of slowing down (L'oreal, rate to beauty and personal products listed on the plat- 2018). form. From the set of data gathered from Female Daily web and mobile application, useful information to help Foundation was chosen to be the object of decision making in marketing can be generated through this research. The reason choosing foundation to be some techniques, one of them is opinion mining. Opin- researched is because researcher observed that ion mining is widely known as the ability of a machine product specification of foundation is more compli- to analyze, understand, and generate text (Feldman & cated compare to any other cosmetics product such Sanger, 2007) as lipstick or eye shadow. So, the outcome is this research gives more impact if each product specifi- In this study, researcher also used in-depth interview to collect insightful opinion from respondents. In-depth cation of foundation could be explained and elabo- interview was conducted to enrich the data from opinion rated. In the other hand, the growth of new product mining in order to trigger different findings or deeper development of local foundation in Indonesia is understanding of factors chosen with one-on-one com- slower than lipstick, lipcream, and blush. The find- munication. With in-depth interview, respondents can be ings of this research might be a good catalysator of more elaborated to explain the underlying factors that local foundation creation and help local foundation influence them in purchasing foundation. brand grab more market share. The insightful findings from opinion mining technique To explore more insight regarding some facts that were on Female Daily Network platform as well as additional mentioned above, preliminary research had been con- in-depth interview would give deeper understanding on ducted. All respondents are aged between 18 until 27 what Indonesia’s cosmetics consumer are actually need years old who are currently living in Surabaya, Jakarta, in a beauty product specifically foundation. The data
71
gathered from Female Daily Network platform and in- 2. What are the category of favorable foundation depth interview are able to find consumers’ review and specification based on relevant keywords that rate towards products features of cosmetics that they occurs in the examined users data gathered from prefer. It provides useful information and facilitate local in-depth interview with Female Daily cosmetics brand decision making of consumers’ product Network’s users? preferences with relevant data. From Female Daily Net- work’s side, this valuable insight of cosmetics’ consum- ers can generate more revenue by selling the findings to This research has two main objectives to be achieved. cosmetics brands. This research directs effort to attempt First, this research aims to seek the product specification using opinion mining and in-depth interview to interpret of the best foundation in 2018 that is chosen by consum- consumers’ product specification preferences reported ers and reported through Female Daily Network plat- through platform as the basis of data management in form. The favorable cosmetics specification is illustrated Female Daily Network and based on in-depth interview by the product specification category that can be useful that has been conducted for Female Daily Network users. information to be adjusted by cosmetics brand. By using In conclusion, this research use qualitative study in order data from Female Daily Network, this research intends to explore more insights regarding foundation, its speci- to explain the cosmetics specification that is frequently fication, and attributes those are considered by consum- chosen by the consumers. ers and successfully made consumers to choose the foundation. The second objective is to seek the factor that influence consumers in purchasing foundation by conducting in- Nationwide sales of cosmetics increased by almost 15% depth interview with Female Daily Network’s users. from 8.5 trillion rupiah in 2013 to 9.76 rupiah in 2014. This is done to give deeper understanding by analyzing Cosmetics industry is expected to grow 10 to 15 percent relevant keywords from different data collecting meth- annually (Cekindo Business Group, n.d.). As explained ods. As conclusion, the findings of the research that in previous background, the growth of purchasing cos- gathered from registered users on Female Daily Network metics seems take side on global brands since they are platform and in-depth interview is expected to gives an preferable because of their ability to provide a broad insightful knowledge of consumers’ preference towards range of product type with different prices that are suita- foundation to be useful information generating the right ble for all segments. If local brands continue to be less decision making in marketing and new product devel- preferable because they are not able to fulfill what mar- opment. ket wants, the growth of cosmetics consumption in Indo- nesia will be beneficial for global brands and give less 2. THEORETICAL FRAMEWORK AND HY- impact to Indonesian local cosmetics industry. At the POTHESES same time, the usage of open source data from user- According to Hawkins et al (2001), attitude is process of generated content like what Female Daily Network has, motivational, emotional, perceptual, and cognitive to- would be useful and insightful if it is utilized as data- wards some aspect of surroundings. This means that bases to help company decide and improve their busi- attitudes is a result of external factors for example how ness. attract consumer towards products and how to initiate the communication between them (Ikechukwu F , Daubry, & For that reason, it is important to utilize unused user- Chijindu H., 2012). Attitude can be defined as emotion generated product review in Female Daily Network plat- that individual possessed towards object (Kotler & form to analyze factors that influence consumers in Keller, 2006). It can also be seen as a formation whether choosing foundation. It is also important to understand individual is accepting or reject particular object relevant keywords of favorable foundation specification (Christina, 2013). According to Solomon (2013), the from consumers to find weakness of local brand founda- focus of attitude as a way to express favorable or unfa- tion and increase local brand foundation’s competitive vorable way towards product, brand, and advertisement. advantage in beauty industry. Moreover, the results of Consumer has been evaluating their preferences towards this study can facilitate local cosmetic brands on how to product as the implication of attitude behaviour improve their business to fulfill their consumer needs. It (Petrovici & Marinov, 2007). Attitude can be used as possibly helps local cosmetics brands to grab profitable prediction of their buying behaviour in terms of market in today’s rapid growth of cosmetics industry as individual as the impact of consumer decision making well as emerging trend of data. Based on the background (Fill, 2009). and problem statement that has been stated above, this Attitudes are consist of three main component: a re- search aims to know : cognitive component, an affective component, and a 1. What are the category of favorable foundation conative component (Sinthamrong & Rompho, 2015). specification based on relevant words that 1. The cognitive component is directly impact on occurs in the examined users data gathered from attitudes because it is based on their Female Daily Network forum? interpretation of information and their past
72 experiences. For example, if individual perceive & Gupta, 2010). By identifying consumers segments, it gives a bridge analysis of what consumer seeks, because something good, he / she will act positively consumer seek for benefits or a problem solver, not only towards them. products (Rowley, 1997). Consumers are actually con- duct an information search regarding the products they 2. The affective component reflects the consum- want to purchase, what makes consumers do the search er’s emotions or feeling toward a certain partic- is uncertainty. Consumer’s purchasing decision are nor- ular product or brand. mally based on their own perception and representations 3. The conative component reflects the tendency of quality (Man, Patwardhan, Flore, & Gupta, 2010). consumers that an individual will undertake as Socioeconomic condition of the markets, income, mobil- their attitudes towards object. In marketing, this ity, and media access are some factors that is affected refers to consumers intention to buy. consumers behavior (Tse, Belk, & Zhou, 1989). At the same time, personal values are found to be determinants if numerous aspects of consumers attitude and behavior Social factors can also affect changes in attitudes which (Homer & Kahle, 1988). All values mentioned are some influence the consumer decision making. It can affect the influential factors that affect the type of needs consumer decision making through subjective norms that the indi- tries to satisfy through purchase and consumption behav- vidual belief. (Sinthamrong & Rompho, 2015). For in- ior (Tse, Belk, & Zhou, 1989). Qualitative interviews stance, when an individual contains positive believe have been categorized in a variety of ways, with many about something, their attitudes will become more posi- contemporary texts loosely differentiating qualitative tive. According to Homer and Kahle (1988), value atti- interviews as unstructured semi-structured, and struc- tude behavior model shown that values affected both tured (Frey J, 2005). Each type of interview has their behavior and attitudes. Values is considered as social own purpose and chosen by considering certain things cognitions that reflects the basic of adaptation on indi- that need to be fulfilled in the research. For example, vidual (Homer & Kahle, 1998). This cognition serves as Malinowski (1932) only used unstructured interview a basis of attitudes and behavior. Also cognition serve as with local key informants and never conducted any focus guide on individual to do something in certain situation groups or in-depth interviews. Compare to what Edmun (Kahle, Kulka, & Klingel, 1980). Husserl (1931) were done, his research used in-depth interview as the source of data to seek a new or current There are three variables in VAB model which are val- phenomenon. Whereas the unstructured interview is ues, attitude, and behavior. VAB model mainly state that conducted in conjunction with the collection of observa- the influence in situation will flow from values to atti- tional data, semi-structured interviews are often the sole tudes to behavior outcomes (Homer & Kahle, 1998). data source of a qualitative research project (Adams & Mcvillan, 2002). Semi-structured interview are generally This model indicates that value in people perceptions organized around a set of predetermined open-ended will affected their attitudes and affect their behavior questions, with other questions emerging from the dia- towards something (Homer & Kahle, 1998). Likewise, logue between interviewer and interviewee. Semi- attitudes and behaviors are the result of abstract values structured in-depth interviews are most widely used in- (Rajani, 2010). Value is essentials behind people mind terviewing format for qualitative research and can occur that drives people’s action (Clawson & Vinson, 1978). either with an individual or in groups. Most commonly The nature of value is subjective and grow as a long way they are only conducted once for an individual or group with social and psychological (Teng, Wu, & Huang, and take between 30 minutes to several hours to com- 2014). Which means it will differ through each person plete. perceptions. Text mining is a field of study that combining infor- One of the basic factors shaping person behavior is atti- mation retrieval, text analysis, information extraction, tudes (Ajzen, 2005). Previous research indicates that clustering, categorization, visualization, database tech- attitude have a similar social cognition than values but nology, machine learning, and data mining (Feldman & still values are more fundamental (Rokeach, 1973). Atti- Dagan, 1995). The most natural information form is text. tudes is a way that individual express positive and nega- In the growth and development of current ICT, it is pos- tive reactions towards an object, situation, and organiza- sible to extract unstructured information based on text tion. Attitude is a tendency to respond positively or and reform it into any knowledge that is more structured negatively to an object, person, institution or state and valuable. As the most natural form of storing infor- (Ajzen, 1991). In the early research about attitudes, mation is text, text mining is believed to have a commer- researchers stated that human behavior is affected by cial potential higher than that of data mining. In fact, a social attitudes (Ajzen, 2005) recent study indicated that 80% of a company’s infor- Understand consumer behavior is an important thing to mation is contained in text documents. Text mining, determine and break down consumers decision-making however, is also a much more complex task (than data process in purchase behavior (Man, Patwardhan, Flore, mining) as it involves dealing with text data that are
73
inherently unstructured and fuzzy. Text mining is a mul- tidisciplinary field, involving information retrieval, text analysis, information extraction, clustering, categoriza- tion, visualization, database technology, machine learn- ing, and data mining (Fayyad & Saphiro, 1996). Problem Identification Text mining can be visualized as consisting of two phas- After conducted a preliminary research in the beginning, es: Text refining that transforms free-form text docu- the next step in assessing research is detecting problems. ments into a chosen intermediate form, and knowledge The main problem that the researcher found is about the distillation that deduces patterns or knowledge from the preferences of cosmetic consumers in Indonesia who intermediate form (Feldman & Dagan, 1995). Intermedi- prefer imported product from global brands, specifically ate form (IF) can be semi-structured such as the concep- for foundation. The objective of this research is to seek tual graph representation, or structured such as the rela- some factors that influences consumers in choosing tional data representation. Intermediate form can be doc- foundation using opinion mining from Female Daily ument-based wherein each entity represents a document, Network, as the biggest beauty platform in Indonesia and or concept- based wherein each entity represents an ob- in-depth interview. ject or concept of interests in a specific domain. Mining a document-based IF deduces patterns and relationship Literature Review across documents. Document clustering/visualization and categorization are examples of mining from a docu- Literature review was done by researcher in order to ment-based IF. Mining a concept-based IF derives pat- obtain several concepts those are in line with the topic. tern and relationship across objects or concepts. Data Other than that, secondary data such as report, website, mining operations, such as predictive modeling and as- and journal are also used to give broad and deeper un- sociative discovery, fall into this category (Hearts, derstanding. Last but not least, findings from previous 1997). A document-based IF can be transformed into a studies are involved in this research as a meaningful concept-based IF by realigning or extracting the relevant insight. information according to the objects of interests in a specific domain. It follows that document-based IF is Data Collection usually domain-independent and concept-based IF is In collecting data for this research, the researcher uses domain-dependent. opinion mining from Female Daily Network platform and in-depth interview. In conducting in-depth interview, 3. RESEARCH METHOD the researcher using a semi-structured way.
Research Design The flowchart as a guidance for semi-structured way is The figure 3.1. describe the research design of this re- shows in Figure 3.2. This flowchart is question and an- search: swers’ chain for interview to seek information from con- sumers:
Problem Identifi- cation
Literature Review
Data Collecting
Opinion Mining In-depth Inter- view
Consumers Consumers Who Use Who Use Foundation Foundation Occasionally
The researcher uses a judgement sampling to decide and Data Analysis eliminate respondents into the required ones. According to (Saunders, Lewis, & Thornhill, 2009) judgement sam- Data Map- 74 Conclusion and Recommendation pling technique aims to specify targeted elements that Foundation in 2018 page which is Estee Lauder Double are related to the objectives or research problem. For this Wear Stay-in-Place 24h Foundation, spanning from July research, interviewees are decided into two groups based 2014 to July 2019. Data are exhibited on Female Daily on the frequency of using foundation. The first group is Network forum amounted to 288 total product reviews the interviewees who are using foundation every day and from different users that will be used in this research. All the second group is the interviewees who are using the data are all public review from users consisting of foundation occasionally, or at least 3 days a week. Then review, impression, and opinion towards Estee Lauder respondents will be asked several questions that lead Double Wear Stay-in-Place 24h Foundation. them to explain the reason they choose foundation. Data Analysis From the flowchart above, researcher firstly start with This research focused to explore all factors that influ- respondents who have already fulfilled all the require- ences consumers in choosing foundation. To explore all ments that has been set before the interview starts. There of the considerations, the researcher had found some are some mandatory requirements that have to be ful- literature that explained about the considerations that filled by all respondents. The requirements are those should be considered, so it can be used to strengthen this who have been using foundation for more than 2 years, research. This research consists of two major processes use foundation at least 3 days a week, and have joined as to analyze the data that had been collected from the re- Female Daily Network users. spondents which are transcript and coding.
Researchers firstly classify respondents based on their Transcript frequency in using foundation. Classification of frequen- cy are divided into two which are those who use founda- The initial process to analyze the data from qualitative tion everyday and those who do not use foundation eve- approach is by doing a transcript. The purpose of this ryday. This classification is made to enrich the findings activity is to transform the audio conversation between from different behavior in using foundation and favora- the interviewer and the respondents or informants to be a ble foundation features from those two different types of text. The audio conversation need to be transformed into respondents. For respondents who said no, researcher texts since it will be used for the next step in data analy- continued to ask what product do respondents use to sis which is coding process. substitute the foundation and why do they choose that product. After that question, researcher asked when do Coding respondents use foundation. Coding is the process that the researcher did after finish- ing the transcript process. According to Charmaz (2008) The next question is applied to both type of respondents, coding is the most important link between the data col- which is what brand do respondents have. This question lection and the meaning of the data. (Smith, 2010) also is a bridging to the next question which aims uncover the added that coding is the method where the researcher reason of respondents choosing brands of foundation. In organize the data, so the message that researcher got the interview, respondents were asked whether local from the informants can be clearer. The coding technique foundation brands are more preferable or not compare to itself consists of three phases to analyze the text data and global foundation brands. Researcher firstly asked also used to do this research. Those phases are open whether respondents have local foundation brands or not, coding, axial coding and selective coding (Saldaña, followed with why respondents have or do not have local 2009) brands and asked which one do respondents prefer, glob- al foundation brands or local ones. After that, researcher The first steps which is the open coding is the phase asked respondents to explain why do they prefer their where the researcher needs to give tentative labels or option and mention top 5 priority reason of why they create some keywords that can summarize the important choose foundation. data that was gathered from the informants. After doing the open coding, then the researchers did the axial cod- ing. The aim of the axial coding is to identify and ana- lyze the relationship between the open codes, to reas- semble the data that had been divided while doing the axial coding and also to discover key analytic group. The final phase is the selective coding. The aim of this phase is to find the core variable which can cover all the codes Figure 0.1 User’s impression towards foundation on and categories (Sekaran, 2003) Female Daily Network forum For the data collection from opinion mining method, Validation data gathered are comments on foundation review on To know and measure the validation of the results from Female Daily Network platform specifically on The Best this research, the researcher does a triangulation. The 75
objective to do the triangulations is because the re- analyze are the product review written in body text. searcher wants to increase the confidence in the findings 4.1.1. Data Scraping and also avoid the potential biases because only use a single methodology and also subjectivity that may occur Using ParseHub as data scraper, this data scraping stage in qualitative approach (Heale, 2013). The triangulation had to deal with some boundaries that should be under- that was done by the researcher was by asking about the lined and adjusted which is the bilingual reviews those findings and results that the researcher got from the are commonly found on the body text. The first step that opinion mining and interview to other researchers who researcher have to do is to visit the web page which is have same interest in makeup, but have different back- https://reviews.femaledaily.com/products/foundation/liq grounds. uid/estee-lauder/double-wear-stay-in-place-foundation- 34?tab=reviews&cat=&cat_id=0&age_range=&skin_typ Data Mapping e=&skin_tone=&skin_undertone=&hair_texture=&hair_ Data mapping is the process where the researcher formu- type=&order=newest&page=1. Figure 4.1.1.1 shows lates the results from the selective coding that has been how the landing page of the link looks like. done in data analysis. The formulation of the results is formed into some models or matriks that will be used by the researcher to create the recommendation.
4. DATA ANALYSIS AND DISCUSSION
Data Processing This research is combining 2 different methods of analy- sis which are opinion mining and qualitative. Researcher firstly mined data from Female Daily Network and ana- lyze it. As addition, in-depth interview was conducted to Figure 0.3 Landing Page of Estee Lauder Double Wear strengthen the analysis and enrich the findings of this Stay-in-Place Foundation on Female Daily Network research. In data scraping steps, researcher have to select some 4.1 Data Collecting data on page which are useful and valuable for further data analysis. The system on ParseHub automatically mined all selected data and collect all of them in Mi- crosofts excel format (Data is attached in Appendix B). Figure 4.3 shows how the result of scraping from ParseHub are. The total data count by this process is 288 reviews
Figure 0.2 The Anatomy of Product Review on Female Daily Network The first thing that researcher need to do to collect data from Female Daily Network platform is mined product reviews from selected landing page. In this case, re- Figure 0.4 The Result of Data Scraping From ParseHub searcher chose product review page from Estee Lauder Double Wear Stay-in-Place Foundation that is awarded as The Best Foundation in 2018 by Female Daily Net- work users. This landing page of product review is cho- sen because researcher want to seek favorable foundation features that is liked by most users on that platform. In this process, the body text, user’s age, user’s skin tones, user’s undertones, and user’s skin concern are collected. However, the main valuable data that researcher want to
76 Negative Neutral Positive Senti- = Senti- Qty Qty Qty Sentiments ments ments As shown in Table 4.1 on positive sentiments table, the glass sticky 3 2 comfortable 2 most frequent favorable keyword that is found on user’s bottle feeling product review is long lasting. Long lasting as positive strange long last- not causing sentiment is mentioned by 90 users from 288 reviews, 3 2 2 fragrance ing breakout which represents 31% of users who contributed on Estee Lauder Double Wear Stay-in-Place Foundation’s product powdery shade op- 3 3 a bit sticky 2 review. Those 31% of users agree that long lasting is one finish tions of their most favorable foundation’s specification. Based on the product review, users like the staying power of causing thick feel- 3 3 smooth 2 acne ing Estee Lauder Double Wear Stay-in-Place foundation because the product lasts more than 6 hours on their face not hy- perfect match without any oiliness and greasiness. 4 satin finish 3 2 giene for skin tones Good coverage is sitting on the second place of the most light cover dark oxidized 4 3 4 frequent keywords that is occurred on the page. As much weight spots as 42 users or 14.5% of total users on the page have said shade dry quick- many shade that Estee Lauder Double Wear Stay-in-Place Founda- 6 5 5 options ly options tion gives good coverage to their face. Good coverage is still related with some other factors on positive senti- dead matte fin- suitable for oily 8 7 5 ment’s table which are medium to full coverage, full mate ish skin coverage, and covers dark spot. Based on the review, dry expensive Estee Lauder Double Wear Stay-in-Place Foundation has 9 12 matte finish 10 quickly price medium coverage that is able to covers dark spot. Its coverage is actually can be built until full coverage. matte 10 demi matte 12 buildable 10 From buildable ability that Estee Lauder Double Wear medium to Stay-in-Place Foundation can do, this high end brand cracking 11 full cover- 19 full coverage 11 claims theirself as medium to full coverage foundation. age In line with that, Estee Lauder Double Wear Stay-in- Place Foundation’s consumers are approved it. thick full cover- 12 28 good oil control 12 feeling age In-depth Interview medium to full no pump 42 16 coverage Frequency of Using Foundation blendable 30 When the researcher wants to seek the factors that influ- encing respondents in choosing the foundation they have not oxidized 30 already had, there were several questions that researcher good coverage 42 ask at the beginning to seek whether the respondents fulfill some requirements that researcher has set or not. long lasting 90 The questions are also asked to categorize the respond- 4.1.2 Sentiment Analysis ents based on their frequency of using foundation. Ques- From scraped data, researcher divided some keywords tions that were asked by the researcher to the respond- into 3 types of sentiments which are negative sentiment, ents are “How long have you been using foundation?” neutral sentiment, and positive sentiment. How research- and “How frequent do you use foundation in a week?” er decide which keywords grouped to which sentiments are based on the context and adjective that is paired with Researcher found 2 category of consumers based on the valuable keywords. Those keywords are something that frequency of using foundation Figure 4.1. shows what is related to the foundation itself. researcher got from the respondents regarding how fre- quent respondents use foundation is a week and what After distributed keywords into 3 different sentiments, brands of foundation do the respondents have. investigator or researcher triangulation were conducted Before conducting the interview, researcher has set some to test the validity and prevent personal bias from the requirements or characteristics that are used to decide researcher (Refers to Appendix C). Table 4.1 shows the who would be the respondents. The requirements are result of researcher triangulation that has been done by 5 respondents are those who are using foundation every- researchers who have knowledge of makeup and come day, have been using foundation for more than 2 years, from different background. have more than 1 foundation brand, and has joined as Female Daily Network users. There are 7 respondents 77
who fulfill all of those requirements. According to the coding that has been done by the researcher, the final result that the researcher got are all of the respondents use foundation everyday because foundation can cover facial imperfections such as acne, acne scars, tired faces, and puffy eyes. Table 4.2 shows that respondents stated that foundation make their face fresh, make them look well dressed and professional. Respondents also stated that since they have been using foundation everyday for more than 3 years, they are able to rate each foundation that they have tried and decide what kind of product feature and formulation that match with their skin con- cern.
Researcher also set some characteristics and require- ments to decide who would be the respondents of con- Figure 0.5 Summary of Consumers Different Perception sumers who use foundation occasionally. The require- and Behavior based on their frequency of using ments consist of respondents who have been using foun- foundation dation for more than 2 years, respondents are those who are using foundation at least 3 days a week, those who Foundation Brands Chosen by Consumers have more than one foundation brand, and already regis- After knowing the frequency of respondents using foun- tered as Female Daily Network users. From that re- dation, researcher want to know what foundation brands quirements, there are 3 respondents who fulfill all of it. did respondents use to have and respondents have been The result that are found after coding has been done by using. Consumer preferences and loyalty towards certain researcher are respondents prefer to use foundation occa- foundation brands can help researcher to seek the factor sionally because they feel that foundation is used every of why respondents choose that brands as their founda- single day, once they use it on a special day, they are not tion. To know about what foundation brands did re- going to look special. Respondent stated that foundation spondents use to have and respondents have been using, is too heavy for daily use. How foundation dynamically researcher use several questions to be asked. All of those react to facial oil and humidity make it gets greasy and questions are: (1) “What foundation brands have you oily after 3 hours of usage. Table 4.3 shows what re- been using from the very first time you use foundation spondents stated that explain why they only use founda- until now?” and (2) “Mention your all-time favorite tion occasionally. foundation and why do you choose it as your all-time favorite foundation?”. Based on the interview when all respondents were asked about how frequent they usually use foundation in a Foundation Brands week, researcher found that respondents behavior in Researcher asked question regarding what foundation using foundation daily and occasionally are both related brands have respondents been using from the very first with how they want to look in front of others. Both char- time they use foundation until now to seek the variant of acters of respondents want to look good, proper, and foundation brands and analyze if consumers tend to cre- professional, but respondents who are using foundation ate some patterns of their more preferable foundation occasionally are more sensitive and have lower tolerance brands. of how foundation give thick feeling to their face, create oil and make their face feel greasy after 3 hours of usage. The first question regarding foundation brand that re- Respondents who are using foundation occasionally, spondent currently use and used to have, only 1 respond- actually use tinted moisturizer or any other product that ent who said that she is currently use local brand which give light coverage to smoothen their facial complexion is cushion from Rollover Reaction. Cushion itself is not and make their face look fresh. As conclusion, all re- considered as foundation, but it’s more like tinted moist- spondents are actually using facial products everyday in urizer with adjustable coverage and added SPF. Rollover order to cover facial imperfections such as acne, acne Reaction has also claimed this product as tinted moistur- scars, puffy eyes and tired face as well as to make their izer in a cushion package rather than a cushion founda- face look fresh. Thus, the result of interview that explain tion. Figure 4.2.1 shows the key visual of Rollover Reac- different behavior and perception of consumers based on tion face cushion tinted moisturizer. their frequency of using foundation is summarized on
Figure 4.4 Reseacher found this grouping of foundation brands
those are chosen by respondents are very interesting. To uncover what are the underlying reason of each respond- ent choose drugstore and high-end foundation brands
78 and create this pattern, researcher decided to ask several It is showed that the responses are very contradictory questions which were (1) “Why do you purchase founda- when researcher asked about high-end foundation tion from that brand?”; (2) “Do you have different factor brands. Respondents are become more indecisive and when you are choosing high-end and drugstore brands take a longer time to decide which high-end foundation foundation?”. From this question researcher want to dig brands they want to purchase compare to the drugstore deeper whether respondent have some purpose in choos- ones. From the interview, researcher found that respond- ing those brands or coincidentally choosing it. ents tend to be more considerate about the details of the product. Aside from their requirement that foundation Table 0.1 Reason in Choosing Foundation Brands shade must match their skin tones, the staying power of Based on the interview that is showed by Table 4.5, re- the product, and will not make their skin breakout, re- spondents purchased drugstore and high-end foundation spondent have an expectation that need to be fulfilled from those brands because they got a repetitive exposure that high-end foundation brand must have some addi- saying that foundation from those brands are that good tional requirements to be considered such as have skin- virtually on social media like instagram and youtube and care benefit, how the foundation set to their face, the from their friend’s recommendation. Respondents also texture and how the product feels on their skin, how interest to purchase when they see a person is able to friendly and helpful the beauty assistants in store are, the make an impressive facial complexion with that founda- packaging and applicator, and any other additional bene- tion. Impressive facial complexion that respondents fits that they can get such as product samples. Respond- meant are poreless face, smooth complexion, demi-matte ents said that they only want to splurge huge amount of and not giving powdery finish. money in high-end foundation when the products are coming from a trusted big brand with excellent reputa- tion. Table 0.2 Consumers’ Requirement in Choosing
Drugstore Foundation From the grouping of foundation brands that researcher found from the interview that is explained by Table 4.8, Table 4.6 Respondents are actually not being too detail 2 out of 10 respondents know there are some big beauty in digging product review, ingredients, product features, company groups consist of some beauty brands. Those 2 and any other things those are related to the foundation respondents are consciously choosing Maybelline, when they purchase foundation from drugstore brands. L’oreal, and Bourjois as their drugstore foundation be- What matters the most for respondents are shade of the cause they know that those brands are on the same port- foundation that match with their skin tones, longevity or folio with good high-end brands. Meanwhile the other 8 the staying power of the foundation, oil control of the respondents are choosing those drugstore brands after product after more than 3 hours of usage, the aftermath read good reviews on social media. of the product that is not causing breakout to their face. However, all of those 3 points are more likely to be Priority of Favorable Foundation Feature achieved when respondents have tried the products be- After knowing what brand that respondents use, product fore. All respondents stated that every time they want to feature that is favorable and unfavorable, and also factor purchase foundation, they have to try it first. From 10 that isn’t related with the product that influencing them respondents, only 2 respondents try to swatch foundation choosing foundation, researcher wants to know what on their hand in store and considers the suggestions from factor matters the most to the respondents. Researcher the beauty assistant. The rest of the respondents are dig- asked respondents to rank favorable foundation feature ging the product reviews from friends and beauty influ- from their number one position as the most important encer on youtube, then finally decide which drugstore factor to their least favorable feature which means less foundation they want to purchase. prioritized. The question that was asked to respondents is (1) “Can you please mention top 5 of your priorities of foundation’s feature that influence you to choose founda- Normal dan Oily No. Combination Dry Skin Sensitive Skin tion?”. Table 4.3 shows that actually there are 3 types of Skin Skin priority regarding product feature of foundation that is favorable for respondents based on their skin types. Shade op- Shade Shade 1 tions options options Shade options Table 0.3 Top 5 Priority of Favorable Product Feature Have Not causing Based on Respondents’ Skin Types 2 Good oil hydrating breakout or al- Long lasting control agent lergy From the interview, researcher found that different skin Not caus- types have different priority when it comes to their fa- 3 Good cover- Good ing crack- Have skincare vorable foundation features. How respondents’ skin react age coverage iness benefits to facial products is the main reason they have has dif- Not exag- 79 4 Long gerate dry Not oxidized lasting skin Long lasting Have 5 Not causing Not oxi- skincare breakout dized benefits Not oxidized
ferent priority based on their skin types. Shade options based on the writer’s reasoning. Data analysis and dis- become number 1 priority for all skin types. For dry and cussion should be presented in brief but clear and it is sensitive skin, their favorable product features are a not dominated by table presentation. The tables which combination between how they want their foundation are presented should not be the rough output but in the make them look as well as what health or skincare bene- processed and brief summary. Tables and pictures are fit that their foundation able to give to their face. For presented consistently in the center and the titles are respondent’s with oily skin, their priority shows that they above for the tables and below for the pictures (Daniel have concern about their natural facial oil. It is men- 2009). tioned on the table that they prioritize foundation which It presents the analysis of the related results, theo- has good oil control for their oily face. Oily, combina- ries, and hypotheses (if any) based on the writer’s rea- tion, and normal skin’s respondents mentioned that long soning (Donahue-Wallace & Chanda 2005). Data analy- lasting, good coverage, and not oxidized are also their sis and discussion should be presented in brief but clear top 5 priority. Respondents with oily, combination, and and it is not dominated by table presentation. The tables normal skin explained that they mention long lasting as which are presented should not be the rough output but their top 5 priority because Indonesia is so humid, they in the processed and brief summary. Tables and pictures need foundation with long lasting formula to prevent the are presented consistently in the center and the titles are foundation fades after some hours of usage. Respondents above for the tables and below for the pictures (Exelby with those 3 skin types also mentioned oxidized, they 1997). It presents the analysis of the related results, theo- agree that foundation that is oxidized are disappointing ries, and hypotheses (if any) based on the writer’s rea- because their face gets dark uncontrollably and make soning. Data analysis and discussion should be presented their face become dull. in brief but clear and it is not dominated by table presen- tation. The tables which are presented should not be the The result indicates that factors from variable keywords rough output but in the processed and brief summary. those are mined from opinion mining on Estee Lauder Tables and pictures are presented consistently in the Double Wear Stay-in-Place foundation and in-depth center and the titles are above for the tables and below interview are slightly different. Shade options are not for the pictures (Mortimer & Cox 1999). chosen to be top 10 product specification those are men- It presents the analysis of the related results, theo- tioned. In the other hand, shade options is contradictory ries, and hypotheses (if any) based on the writer’s rea- chosen as the most important product specification men- soning. Data analysis and discussion should be presented tioned from in-depth interview. in brief but clear and it is not dominated by table presen- tation. The tables which are presented should not be the It presents the analysis of the related results, theo- rough output but in the processed and brief summary ries, and hypotheses (if any) based on the writer’s rea- (Rathbun, West & Hausken 2003). Tables and pictures soning. Data analysis and discussion should be presented are presented consistently in the center and the titles are in brief but clear and it is not dominated by table presen- above for the tables and below for the pictures. It pre- tation. The tables which are presented should not be the sents the analysis of the related results, theories, and rough output but in the processed and brief summary. hypotheses (if any) based on the writer’s reasoning Tables and pictures are presented consistently in the (Simpson 1997). Data analysis and discussion should be center and the titles are above for the tables and below presented in brief but clear and it is not dominated by for the pictures. Bourassa (1999) emphasized it presents table presentation. The tables which are presented should the analysis of the related results, theories, and hypothe- not be the rough output but in the processed and brief ses (if any) based on the writer’s reasoning. Data analy- summary (Porteous 2007). Tables and pictures are pre- sis and discussion should be presented in brief but clear sented consistently in the center and the titles are above and it is not dominated by table presentation. The tables for the tables and below for the pictures (Albanese which are presented should not be the rough output but 2009). in the processed and brief summary. Tables and pictures It presents the analysis of the related results, theo- are presented consistently in the center and the titles are ries, and hypotheses (if any) based on the writer’s rea- above for the tables and below for the pictures change soning (University of Queensland Library 2009). Data (Bowden and Fairley 1996). analysis and discussion should be presented in brief but It presents the analysis of the related results, theo- clear and it is not dominated by table presentation (Bliss ries, and hypotheses (if any) based on the writer’s rea- n.d.). The tables which are presented should not be the soning. Data analysis and discussion should be presented rough output but in the processed and brief summary. in brief but clear and it is not dominated by table presen- Tables and pictures are presented consistently in the tation. The tables which are presented should not be the center and the titles are above for the tables and below rough output but in the processed and brief summary for the pictures (Cookson 1985). It presents the analysis (Huffman 1996). Tables and pictures are presented con- of the related results, theories, and hypotheses (if any) sistently in the center and the titles are above for the based on the writer’s reasoning. Data analysis and dis- tables and below for the pictures. It presents the analysis cussion should be presented in brief but clear and it is of the related results, theories, and hypotheses (if any) not dominated by table presentation (International Or-
80 ganization for Standardization 1982). The tables which agent, not causing crackiness, not exaggerate dry skin, are presented should not be the rough output but in the and have skincare benefits for dry skin users’ favorable processed and brief summary. Tables and pictures are foundation specification. For users with sensitive skin, presented consistently in the center and the titles are they like foundation which have shade options that above for the tables and below for the pictures (Depart- match with their skin tones and undertones, not causing ment of Mines and Energy, Queensland 1996). breakout or allergy, have skincare benefits, long lasting, and not oxidized. 5. CONCLUSION, IMPLICATION, SUGGESTION, AND LIMITATIONS Recommendation In this study, researcher tried to analyze the factor influ- This research is conducted in order to provide more encing consumers in choosing foundation by using text knowledge and insight of factors influencing consumers mining and qualitative research. Female Daily Network’s in choosing foundation with the scope of Female Daily users are chosen to be the informants that give data to be Network’s users. Therefore the researcher has several processed. This conclusion for this study are: recommendations basen on the research’s findings. There are 17 categories of cosmetics specification those are favored by Female Daily Network’s users. Those For Estee Lauder categories is mined from Estee Lauder Double Wear Stay-in-Place Foundation’s product review. There are Based on consumers review on Female Daily Network, long lasting, good coverage, not oxidized, blendable, the things that they hate the most from Estee Lauder medium to full coverage, good oil control, buildable, Double Wear Stay-in-Place Foundation are the fact that matte finish, suitable for oily skin, many shade options, the bottle does not come with pump, bu Estee Lauder covers dark spots, perfect match for skin tones, smooth, sells the pump separately instead. This costs consumers a bit sticky, not causing breakout, and comfortable. more money. To compete and win market size from Among all of those categories, long lasting is the most other brands who are also selling good quality of high- frequent foundation’s specification that is mentioned by end foundation, researcher suggests that Estee Lauder is users and has influences them to choose Estee Lauder better to consider Indonesian’s user market by making a Double Wear Stay-in-Place Foundation, followed by packaging that has pump on it or make any other appli- good coverage, not oxidized, blendable, and medium to cator options that is cheaper than pump’s price. full coverage. Long lasting is the most frequent founda- tion specification that is chosen by users because users For Local Brand Foundation in Indonesia are satisfied with how Estee Lauder Double Wear Stay- Shade options is indeed the most crucial thing that is in-Place Foundation’s product staying power claimed considered by consumers. Local brand foundation can matches with what they have been experiencing. Users learn from what global brand is doing to match consum- acknowledge that Estee Lauder Double Wear Stay-in- ers’ skin tones. If giving more shades cost a lot of money Place Foundation last for more than 5 hours in hot and for the company, local brand foundation can start to humid weather. This foundation also have good coverage correct the undertones of their existing foundation. Be- that is able to covers imperfections on users’ face and cause consumers mostly said that their face look a bit give immediate flawless look. grey with some foundation brands that they have, it Another findings from this research are the foundation's means the product that they have put on their face have specification that is favored by consumers without giv- different undertones with their personal undertones. ing any specific product or brands. Researcher seek gen- eral foundation’s specification using in-depth interview For Future Research for 10 Female Daily Network users that have been using Researcher suggests further research to add or combine foundation more than 2 years and use it for at least 3 opinion mining method with any other data collection days a week. From the research, it is found that the gen- method if the quantity of the data IS below 500. This eral foundation specification favored by users are actual- combination adds the volume of the data and helps the ly split based on their skin types. Users’ with normal and data to become more valid and help the overall analysis combination skin have same foundation classification to be more rigorous. that users prefer to have on their foundation. There are shade options, long lasting, good coverage, not oxidized, and not causing breakout. For oily skin, their foundation specification are more likely related to oil control. There are shade options, good oil control, good coverage, long lasting, and not oxidized chosen as favorable foundation specification for users with oily skin. For dry and sensi- tive skin, their favorable product specification are more focused on skin health and skincare benefits that product can provide. There are shade options, have hydrating 81
REFERENCES g/article/2018/indonesia_s_cosmetics_industry_ the_rise_of_halal_cosmetics_11842.php Gordon, R. (2011). Critical Social Marketing: Definition, Adams, & Mcvillan. (2002). Primary care for elderly Application, and Domain. Journal of Social people: why do doctors find it so hard? Marketing, 82-99. Gerontologist, 835–842. Hanneman, R. A. (2005). Introduction to Social Network Agar. (1980). The Professional Stranger. San Diego: San Methods. Diego Academic Press. Harvard Business Review. (2019, February). How Bidding, J., & Chung, C. (2014). The Hybrid Shift a Global Brands Can Respond to Local Student-Driven Restructuring of The College Competitors. Retrieved from Classroom. Computers & Education. https://hbr.org/2019/02/how-global-brands-can- Bordag, S. (2008). A Comparison of Co-occurrence and respond-to-local-competitors Similarity. Heale, R. &. (2013). Understanding triangulation in Cekindo Business Group. (n.d.). Retrieved from Where research. Evidence-Based Nursing. to Invest: Cosmetics Sector in Indonesia: Hearts. (1997). Text data mining: Issues, techniques, and https://www.cekindo.com/sectors/cosmetics the relationship to information access. UW/MS Charmaz, K. (2008). Constructing grounded theory: A workshop on data mining. practical guide through qualitative analysis. Homer, & Kahle. (1988). A Structural Equation Test of Sage. the Value-Attitude-Behavior Hierarchy. Journal Christina, V. M. (2013). A quantitative research of of Personality and Social Psychology, Vol. 54, consumer's attitude towards food products No. 4, 638-646. advertising. Computational Methods in Social Homer, P., & Kahle, L. (1998). A Structural Equation Sciences, vol.1, no.2, 11-20. Test of The Value Attitude Behaviour Clawson , C., & Vinson, D. (1978). Human values: A Hierarchy. Journal of Personality and Social historical and interdisciplinary analysis. Psychology, Vol 54(4), 638-646. Advances in Consumer Research, 396-402. Ikechukwu F , A., Daubry, P., & Chijindu H., I. (2012). Duggleby. (2005). What about focus group interaction Consumer Attitude: Some Reflections on Its data? Qualitative Health, 832–840. Concept, Trilogy, Relationship with Consumer Fayyad, & Saphiro. (1996). [1] Fayyad, U., Piatetsky- Behavior, and Marketing Implications. Shapiro, G. & Smyth, P. (1996). From data European Journal of Business and mining to knowledge discovery: An Overview. Management. In Advances in Knowledge Discovery and Data Johnson. (1996). Interviewing in Depth: the Mining. MIT Press, 1-36. Interactive)Relational Approach. California: Feldman, R., & Dagan, I. (1995). Knowledge Discory in Thousand Oak. Textual Databases. Montreal: AAAI Press. Kahle, L., Kulka, R., & Klingel, D. (1980). Low Feldman, R., & Sanger, J. (2007). Advanced Approaches adolescent self-esteem leads to multiple in Analyzing Unstructured Data. New York: interpersonal problems: A test of social Cambridge University Press. adaptation theory. Journal of Personality and Fill, C. (2009). Marketing Communications: Social Psychology, 39(3), 496-502. Interactivity, Communities and Content. Kotler, P., & Keller, K. (2005). Marketing Management, England: Pearson Education Limited. 12th Edition. Frey J, F. A. (2005). The Interview: From Neutral Kotler, P., & Keller, K. (2006). Marketing Management Stance to Political Involvement. California: 12 Edition. Pearson Education Inc. Sage. Leong, S., & Kotler. (2012). Marketing Management: Gilchrist. (1999). Doing Qualitative Research. An Asian Perspective, 6th Edition. California: Sage. L'oreal. (2018, January 23). Retrieved from The Inside Global Business Guide Indonesia. (2018). Indonesia’s Scoop in Indonesia: Cosmetics Industry: The Rise of Halal https://www.loreal.com/media/news/2018/jan/2 Cosmetics. Retrieved from 018-beauty-in-indonesia http://www.gbgindonesia.com/en/manufacturin Man, Patwardhan, M., Flore, P., & Gupta, A. (2010). Identification of Secondary Factors that
82 Influence Consumer’s Buying Behavior for Information Exchange. Science Direct, 898- Soaps and Chocolates. The IUP Journal of 903. Marketing Management Vol. IX. Teng, Y.-M., Wu, K.-S., & Huang, D.-M. (2014). The Markplus. (2018). Halal and Herbal, The Two Emerging Influence of Green Restaurant Decision Buzzwords in Indonesia Cosmetics Market. Formation Using the VAB Model: The Effect of Retrieved from Environmental Concerns upon Intent to Visit. http://www.markplusinc.com/halal-and-herbal- Sustainability, 6(12):8736-8755 . the-two-emerging-buzzwords-in-indonesias- Tse, Belk, & Zhou. (1989). Becoming a Consumer cosmetics-market/ Society: A Longitudinal and Cross- Cultural Moro et al, S. M., Rita, P., & Vala, B. (2016). Predicting Content Analysis of Print Advertisements from Social Media Performance Metrics and Hong Kong, the People’s Republic of China, Evaluation of The Impact on Brand Building: A and Taiwan. Journal of Consumer Research Data Mining Approach. Journal of Business Vol. 15, No. 4, 457-472. Research, 3341-3351. US Departement of Commerce. (2016). Indonesia: Petrovici, D., & Marinov, M. (2007). Determinants and Personal Care & Cosmetics Products. antecedents of general attitudes towards Retrieved from Cosmetics, Toiletries and advertising: A study of two EU accession Skincare Market Overviews 2016: countries. European Journal of Marketing. https://www.google.com/url?sa=t&rct=j&q=&e European Journal of Marketing, Vol 41: Issue src=s&source=web&cd=1&ved=2ahUKEwiX7 3/4. qmA5tjjAhVt8HMBHfy7A- Rajani, N. (2010). Values, attitudes and intention to YQFjAAegQIAxAC&url=https%3A%2F%2Fb consume wild fish versus farmed fish in Nha uild.export.gov%2Fbuild%2Fidcplg%3FIdcSer Trang. OAI. vice%3DDOWNLOAD_PUBLIC_FILE%26Re Reuters. (2012). Loreal Sees Indonesia as Fastest visionSelectionMethod%3DLatest%26dDocNa Growing Asia Market. Retrieved from me%3Deg_us https://www.reuters.com/article/loreal- indonesia/loreal-sees-indonesia-as-fastest- growing-asia-market- idUSL3E8M7BB320121107 Rokeach, M. (1973). The Nature of Human Values. Rowley. (1997). Focusing on Consumers. Library Review Vol. 46, No. 2, 81-89. S. P, B., & Everett, M. G. (1990). Social Network. Saldaña, J. (2009). An introduction to codes and coding. The coding manual for qualitative researchers. Saunders, M., Lewis, P., & Thornhill, A. (2009). Research methods for business students. Pearson Education. Sekaran, U. &. (2003). esearch methodology for business. Sinthamrong, P., & Rompho, N. (2015). Factors Affecting Attitudes and Purchase Intentions Toward Branded Content on Webisodes. Journal of Management Policy and Practice , 16(4):64-72 . Smith, P. C.-D. (2010). Single-question screening test for drug use in primary care. Archives of internal medicine, 1155-1160. Teber, S., & Lanza, G. (2019). Transparency in GlobaProduction Network: Improving Disruption Management by Increased 83
The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
Determinants of Firm Value : Dividend Policy and Debt Policy Theory Testing
Khusnul A’yun M.*, Rr. Iramani
STIE Perbanas Surabaya, Jl. Nginden Semolo No. 34-36, Surabaya 60118
ARTICLE INFO ABSTRACT Article history: The long-term goal of a business organization in financial perspective is to maxim- Received ize the value of the company. In public companies, firm value is the perception of Revised shareholders related to the success of the company, which can be reflected in the Accepted price of outstanding shares on the capital market. The aims of this research are to examine the dividend policy and debt policy theory, and the effect on firm value. JEL Classification: Firm value is investor’s perception about the firm success that can be seen from the outstanding stock price in stock market. Sample in this research consists of non financial firms listed in LQ 45 consistently for five years in period 2013-2017. Key words: Samples are selected with purposive sampling method and there are 73 observations Firm Value, Dividend Policy, Debt based on the defined criterias. Data analysis technique used in this research is Policy Multiple Regression Analysis (Ordinary Least Square). The results show that dividend policy has significant positive effect on firm value, while debt policy has no DOI: 10.6084/m9.figshare.9849239 significant effect on firm value. The managerial implication of this research is the importance of the company in making optimal dividend decision in order to give a positive signal to the market, so it can attracts investors which will ultimately increase the value of the company.
ABSTRAK Tujuan jangka panjang dari sebuah organisasi bisnis dalam perspektif keuangan ada- lah untuk memaksimalkan nilai perusahaan. Pada perusahaan public, nilai perusahaan merupakan persepsi para pemegang saham terkait dengan kesuksesan sebuah perusahaan, yang dapat tercemin dari harga saham yang beredar di bursa atau pasar saham. Penelitian ini bertujuan untuk menguji teori kebijakan dividen dan teori kebijakan hutang, serta pengaruhnya terhadap nilai perusahaan. Pengambilan sampel dilakukan dengan purposive sampling dengan kriteria merupakan perusahaan non keuangan yang terdaftar dalam indeks LQ 45 selama lima tahun berturut-turut pada periode 2013-2017. Teknik analisis data yang digunakan dalam penelitian ini adalah Multiple Regression Analysis (Ordinary Least Square). Hasil penelitian menunjukkan bahwa kebijakan dividen berpengaruh positif signifikan terhadap nilai perusahaan, sedangkan kebijakan hutang tidak memiliki pengaruh terhadap nilai perusahaan. Implikasi manajerial dari penelitian ini adalah pentingnya perusahaan dalam pengambilan keputusan dividen optimal agar memberikan sinyal positif pada pasar sehingga menarik investor yang pada akhirnya akan meningkatkan nilai perus- ahaan
1. INTRODUCTION is by increasing the value of the company. One of the factors supporting the progress of the Maximizing the company or firm value is the goal country’s development is the existence of a well- of the establishment of a company. running business industry. To achieve this, The firm value is the price that a buyer companies are competing to improve their quality willing to pay if the company is sold. Firm value is in order to compete in the industry and be able to also the perception of shareholders related to the attrack many consumers. There are many ways success of a company, which can be reflected in companies can do to achieve success, one of them the price of outstanding shares on the capital
* Corresponding author, email address: [email protected]
The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
market. A high firm value indicates a high level of Firm value shareholder’s prosperity (Martha & Lena, 2017). In The firm value is the perception of shareholders addition, high firm value can increase market related to the success of a company, which can be confidence in current and future company reflected in the price of outstanding shares on the performance. stock market. Firm value is also the price that a There are several factors that can influence buyer willing to pay if the company is sold. the firm value, such as dividend policy, debt The higher firm value, the higher the policy, and investment decisions. Dividend policy investor’s interest in the company’s shares. That is is the percentage of profit paid to shareholders because a high firm value indicates a high level of (Harmono, 2014). Dividend policy is related to the shareholder’s prosperity (Martha & Lena, 2017). In use of profits which are the right of shareholders, addition, high firm value can increase market whereby the company’s profits can be distributed confidence in current and future company as dividends or retained to be reinvested. performance. Dividend payment can reflect the condition of Firm value can be measured through stock’s a company. The greater amount of dividends paid price by using valuation ratio. According to to shareholders, the company’s performance is Sudana (2011), valuation ratio is a ratio associated considered to be good because the company is able with evaluating the performance of company’s to generate high profits. The amount of dividends shares that have been traded on capital market. paid is expected to increase the demand of This valuation ratio shows how much the company’s shares so that the stock’s price is also company valued by the potential investors, so that increasing. High stock’s price can indicate the high they are interested in buying shares at the higher value of the company. price than the book value. The explanation is supported by research conducted by Parminto, et al (2016) and Rehman Dividend Policy and its effect on Firm Value (2016) which state that dividend policy has a Dividend policy is the percentage of profit paid to significant positive effect on firm value. In line shareholders (Harmono, 2014). Dividend policy is with these results, research conducted by Esana & related to the use of profits which are the right of Ari (2017) and Martha & Lena (2017) also found shareholders, whereby the company’s profits can that dividend policy has a positive effect on firm be distributed as dividends or retained to be value. reinvested. Another factor that affect the firm value is Brigham & Houston (2011) stated that there debt policy. Debt policy is a company policy are several theories explaining the relationship related to how much tha amount of debt that a between dividend policy and firm value, including company will use as a source of funding (Martha Signalling Theory, Irrelevance Theory, Bird in the & Lena, 2017). Many things need to be considered Hand Theory, dan Tax Preference Theory. so that the debt they have can help the company in Signalling Theory explains that the dividend improving their operation activities, because the paid by a company is a signal to shareholders wrong debt management can make the company related to the company’s current performance and suffer loses in the future. The higher debt future prospects (Esana & Ari, 2017). An increase proportion set by the company at a certain level in dividends paid is considered good news for means the higher firm value. But, if the amount of shareholders, because it indicates that the debt has exceeded the defined proportions, then company is in a good condition, as well as the the firm value can be decrease. company’s prospects for the future. So, this theory Research conducted by Martha & Lena (2017) shows that dividend policy has a positive effect on shows that debt policy has a positive effect on firm firm value. value. This result is in line with Parminto, et al Dividend Irrelevance Theory states that the firm (2016) and Setiadharma & Machali (2017) which value is not determined by the amount of dividend state that debtpolicy has a significant positive payout ratio, but it is determined by the effect on firm value. company’s ability in managing its assets in order This research aims to reexamine the effect of to generate profits. This means that dividend dividend policy and debt policy on firm value. policy does not have effect on firm value.
2. THEORETICAL FRAMEWORK AND HYPO Bird in the Hand Theory is compared to one THESES bird in the hand is more valuable than a thousand 85
The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
birds in the air. The bird in the hand is meant to be Debt policy and its effect on Firm Value a dividend, while the thousand birds in the air are Debt policy is a decision taken by managers capital gains, which is the profit gained from the regarding the amount of debt that a company can difference between the selling price and the have to fund its operational activities. Debt policy purchase price of a stock. This theory states that will encourage managers to be more careful in dividends from owned shares can provide more using debt, both in the short and long term debt. certainty than “one thousand” capital gain in the There are several theories that provide capital market. This is because the stock price in explanations related to debt policy, two of them the capital market is always changes, so that the are Pecking Order Theory dan Trade Off Theory. capital gains can also change, even the investor Pecking Order Theory explains that companies tend can get capital loss if there’s a mistake in to look for sources of funding with low rsk (Myers predicting a stock. According to this theory, if a & Majluf, 1984). Pecking Order Theory assumptions company pays high dividends to their investors, are : (1) Companies tend to prefer internal funding the firm value will also be higher in the investor’s rather than external funding. Internal funding can point of view. This shows that dividend policy can be obtained from retained earnings from business positively effect the firm value. operations. (2) If external funding is needed, Tax Preference Theory, also known as Tax companies tend to choose to issue the safest Differential Theory, states that there are differences in securities first, those with the lowest risk to high- tax rates between capital gains and dividends. risk securities, such as bonds, preferred shares, Generally, the tax rate of capital gains is lower than the and ordinary shares. (3) Establish dividend dividends tax rate. That is the reason why investors payment that tend to be constant, where the prefer capital gains to dividends. The higher dividend amount of dividends paid is not affected by how received by the investors means the higher tax that must much profit or loss the company has. be paid, so that investors do not feel happy about the existence of dividends which is have an bad impact on The Trade Off Theory according to Myers & firm value. Based on this explanation, there is Majluf (1984) explains that the company will owe concluded that dividend policy has a negative effect on or take a debt to a certain level of debt, that is firm value, because the higher the dividends paid, the when the tax savings from additional debt cost are lower the investor’s valuation of the company. equal to the cost of financial distress. This means Based on Signalling Theory, an increase in that companies with high profitability will try to dividends paid is considered good news for reduce their taxes by increasing the value of the shareholders, because it indicates that the debt ratio, thus the additional debt cost can be company is in a good condition, as well as the used to reduce taxes. company’s prospects for the future. So, this theory Brigham and Houston (2011) provide some shows that dividend policy has a positive effect on explanations related to trade-off theory as follows: firm value. Based on the expalanatory in Bird in the (1) Debt can provide tax benefits, where by using Hand Theory, the results are obtained that if the more debt can reduce the tax. (2) Company’s debt companies pay high dividends to investors, yhe ratio target is less than 100% in order to reduce the firm value is also increase. Therefore, it can be potential of bankruptcy. (3) The capital structure of conclude that dividend policy of a company can each companies are different depending on positively affect the value of the company. business risk and bankruptcy costs. Capital Both theories are supported by researches structure will be optimal if it can maximize the conducted by Parminto, et al (2016) dan Rehman stock’s price. Based on this theory, each company (2016) which state that dividend policy has a has their respective consideratons in fulfilling the significant positive effect on firm value. In line funds need, based on the capabilities of the with these results, researches conducted by Esana company. & Ari (2017) dan Martha & Lena (2017) also found Based on pecking order theory, the company that dividend policy had a positive effect on firm will fulfill the funding needs by prioritizing value. internal funding first. If the internal funding has Based on the theory and empirical review, the not been sufficient, the company will use external first research hypothesis can be formulated : source to fulfill the funding needs, which is by H1: Dividend policy has a significant positive effect debt. The existence of these debts can make on firm value potential investors assume that the company is experiencing a lack of funds and the company’s profits are insufficient. This can impact the firm 86
The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
value, where the potential investors consider that (3) Firms that have positive equity the company is in a bad condition so that their (4) Firms that pay dividend to investors interest in company’s shares is low. Therefore, the high debt held by the company can cause the value There are 120 observations from 24 firms of the company decrease. listed in LQ 45 for five years in period 2013-2017. These explanations are supported by After selecting sample based on defined criteria, researches conducted by Parminto, et al (2016) and there are some firms that didn’t pay dividend to Setiadharma & Machali (2017) which stated that their investors. So, this research has 73 dividend policy has a significant negetive effect on observations that can be processed. firm value. The high level of debt owned by a company Research Variables and Measurement does not necessarily indicate that the company is The variables used in this research are firm value in a bad condition. The trade-off theory explains that as the dependent variable. Dividend policy and one of the goals of companies in using debt is to debt policy are the independent variables. reduce the amount of tax paid. The reduced tax 1. Firm value that must be paid can make the company’s profits Firm value is the perception of shareholders increase. Increased profits can indicate that the related to the success of a company, which company is in a good condition and can has an can be reflected in the price of outstanding impact on the stock’s price increases. This can shares on the capital market. In this research, explain that debt policy has a positive effect on firm value will be measured by Price to Book firm value. Value (PBV). PBV can be calculated by A similar explanation is found in Martha & dividing price per share with the book value Lena (2017) research which shows that debt policy per share. The higher the PBV value indicates has a positive effect on firm value. Researc that the shares sold have high prices and conducted by Rehman (2016) also shows that much in demand by the investors, so that the capital structure, in this research is debt policy, has firm value will increase. a positive effect on firm value. Based on the theory and empirical review, the second of research Market price per share PBV = hypothesis can be formulated : Book value per share H2: Debt policy has a significant positive effect on firm value 2. Dividend Policy Dividend policy is the percentage of profits Dividend Policy H1 (+) paid to shareholders. In this research,
Firm Value dividend policy is measured using the Dividend Payout Ratio (DPR). The DPR Debt Policy H2 (+) shows the amount of dividends paid to the company’s total net income. Picture 1
Theoretical Framework Dividend per share DPR = 3. RESEARCH METHOD Earning per share Data, Sample, and Sampling Technique The type of data used in this research is secondary 3. Debt policy data. Secondary data sources are annual financial Debt policy is a decision taken by the statements. manager regarding the amount of debt that The population in this research consists of will be used to fund the company’s operation non financial firms listed in Indonesian Stock activities. In this study, debt policy will be Exchange period 2013-2017. Sampling method measured using the value of Debt to Equity used in this research is purposive sampling, which Ratio (DER). The company is in a good is selecting samples based on criterias defined by condition if the DER value is not too high. the researcher (Anwar Sanusi, 2011), as follows: (1) Firms listed in LQ 45 for five years in period Total Debt 2013-2017 DER = (2) Firms in non financial sector Total Equity
87
The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
Data Analysis Technique PBV(t) = c0 + c1.DPR(t-1) + c2.DER(t-1) + e3
The statistical analysis used in this research is Information: multiple regression analysis (ordinary least Y = Firm value square) by using Eviews as analysis tool. X1 = Dividend Policy
X2 = Debt policy 4. DATA ANALYSIS AND DISCUSSION c = Regression Coefficient Descriptive Anaysis Result e3 = error term Descriptive analysis result summary is presented in Table 1 :
Result of Multiple Regression Analysis Tabel 1 The result of multiple regression analysis are Descriptive Statistic shown in table 1. Based on the results of data
processing with Eviews program, the regression Variable Mean Minimum Maximum equation used in this research is as follows: DER (x) 0,741 0,150 2,270 PBV(t) = -2,2090 + 2,552.DER(t-1) + 0,041.DPR(t-1) + e3 DPR (%) 47,247 3,648 106,688 2 PBV (x) 3,632 0,220 27,350 Determination Coefficient Test (R ) The Adjusted R Squared is 0.8748 or 87,48%. It Source : Data processed by Eviews 10 shows that firm value as the dependent variable Based on Table 1, it can be seen that DER average can be explained by two independent variables : is 0,741. It means that 74,1% of company funding dividend policy and debt policy equal to 87,48% comes from debt, which is companies use more while the rest 12,52% was explained by other debt rather than their own capital. Next, DPR factors outside the research model. average is 47,247%, which means that the company’s profits distributed as dividends to Analysis Variance (F-test) shareholders is quite high. The value of PBV Based on testing criteria from the results of data average is 3,632. It indicates that investors value processing with Eviews program, it can be seen the company more than 3,632 from what was that Fcount result is 18,172 > 3,69 or Fcount ≥ Ftable , expected. and signifance value is 0,000 < 0,005 (H0 rejected). So, it can be said that dividend policy and debt Regression Analysis Result policy as together have a significant effect on firm The research model is as follows : value. Y(t) = c0 + c1.X1(t-1) + c2.X2(t-1) + e3
Table 2 Multiple Regression Analysis Result
Variable Coefficient t-count Sig Constanta (C) -0.209 -2.719 0.0082 Dividend Policy (DPR) 0.041 4.366 *** 0.0000 Debt Policy (DER) 2.552 1.436 0.1554 F = 18,172 R-squared = 0,8748 Sig F = 0,000 Adjusted R-squared = 0,8266
Source : Data processed by Eviews 10 *** sig 1%
Hypothesis Test and Discussion direction of the dividend policy variable has 1. The Effect of Dividend Policy on Firm value positive direction. Based on table 1, it can be seen that tcount The higher the Dividend Payout Ratio of the result is 4,366 > 1,64 or tcount > ttable and company, the higher the firm value according significance value is 0,000 < 0,05 so H0 is to investors. This explanation matchs with rejected. It means that dividend policy has signalling theory which explains that an significant positive effect to firm value. increase in dividends is considered good To determine the direction of the hypothesis, news for shareholders, because it indicates beta shows the number 2,552 means the that the company is in a good condition, so 88
The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
does the company prospect for the future. concluded that dividend policy has a significant This results support the Bird in the Hand positive effect on firm value. It means that the Theory which states that investors prefer higher the Dividend Payout Ratio of the company, dividends over capital gains. Returns in the the higher the firm value according to investors. form of dividends are more certain than This study also shows that debt policy does not capital gains. Thus the high dividend significantly affect the firm value. It means that the distribution will attract investors to invest amount of debt does not determine the increase or funds in the company, so the demand for decrease of firm value. shares will increase. If this happens, than the This results imply that the importance of the share’s price will increases and ultimately the company in making optimal dividend decisions, in firm value will also increases. order to give a positive signal to the market so that The results of this study also support it attracts investors, which will ultimately increase researches conducted by Parminto, et al (2016) the firm value. and Rehman (2016) which state that dividend policy has a significant positive effect on firm Suggestion value. This reserach only included two variables affecting In line with these results, researches firm value, there are dividend policy and debt conducted by Esana & Ari (2017) dan Martha policy. It is hoped that further researcher can use & Lena (2017) show that dividend policy has several variables other than these two variables. a positive effect on firm value. It is also hoped for further researcher to increase the period or extend the observation period of the 2. The Effect of Debt policy on Firm value research to reveal different results. Based on table 1, it can be seen that tcount result is 1,436 < 1,64 or tcount < ttable and Limitation significance value is 0,1554 > 0,05 so H0 is There are several limitations in this research. First, accepted. The results show that debt policy this research only uses two variables as the has no effect on firm value. independent variable, there are dividend policy This result does not support the two theories and debt policy. Second, the research period is about debt policy, namely pecking order only five years (2013-2017). theory and trade-off theory. This means that the large proportion of debt to capital owned REFERENCES by a company will not affect the size of the Anwar Sanusi, 2011. Metodologi Penelitian Bisnis. firm value. This indicates that how much and Jakarta : Salemba Empat. from where the source of funds used by the Brigham, Eugene F., dan Houston, Joel F, 2011. company doen not have an impact on Dasar-Dasar Manajemen Keuangan. Jakarta : investor’s interest to invest their funds in the Salemba Empat. company. Investors think more realistically Esana, Ria. dan Ari Darmawan. (2017). “Pengaruh by seeing how much dividends will be Kebijakan Dividend an Keputusan Investasi received, not from where the source of funds terhadap Nilai Perusahaan serta Dampaknya used by the company. Thus, the Pecking terhadap Profitabilitas”. Jurnal Administrasi Order Theory and Trade Off Theory were not Bisnis. Vol 20. No 6, pp. 201-210. successfully proven in this study. Harmono, 2014. Manajemen Keuangan Berbasis The result of this study does not support Balanced Scorecard Pendekatan Teori, Kasus dan Martha & Lena (2017) research which states Riset Bisnis. Jakarta : PT Bumi Aksara. that debt policy has a positive effect on firm Martha, Dewi. dan Lena Farida (2017). “Pengaruh value. Kebijakan Dividen, Kebijakan Hutang, dan This result is also not in line with research Keputusan Investasi terhadap Nilai conducted by Rehman (2016) that shows Perusahaan”. Jurnal Online Mahasiswa. Vol 4. capital structure, in this case is debt policy, No 2, pp. 1-15. has a positive effect on firm value. Myers, Stewart C. and Nocholas S. Majluf. (1984). “Corporate Financing and Investment 5. CONCLUSION, IMPLICATION, SUGGES- Decisions When Firms Have Information that TION, AND LIMITATIONS Investors Do Not Have”. Journal of Financial Based on the results in this study, it can be Economics. Vol 13. 89
The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
Parminto, Ardi. Djoko Setyadi. dan Jhonny Sinaga. Rehman, Obaid Ur. (2016). “Impact of Capital (2016). “The Effect of Capital Structure, Firm Structure and Dividend Policy on Firm Growth and Dividend Policy in Profitability Value”. Journal of Poverty, Investment, and and Firm Value”. European Journal of Business Development. Vol 21, pp. 40-57. and Management. Vol 8. No 33, pp. 123-134. Sudana, I Made, 2011. Manajemen Keuangan Setiadharma S. dan Machali M. (2017). “The Effect Perusahaan : Teori & Praktik. Jakarta : Erlangga. of Asset Structure and Firm Size on Firm V. Wiratna S. Dan Poly Endrayanto, 2012. Statistika Value with Capital Structure as Intervening untuk Penelitian. Yogyakarta : Graha Ilmu. Variable”. Journal of Business and Financial Affairs. Vol 6. No 4, pp. 1-5.
90
The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
Organizational Commitment as a Mediator of The Relationship between Islamic Work Ethic and Employee Attitude towards Organizational Change in Islamic Bank XYZ Region East Java, Bali and South East Nusa
Monika Ayuningtyas1, Tatik Suryani2 1 STIE Perbanas Surabaya, Nginden Semolo Street 34-36, Surabaya, 60118, East Java, Indonesia
ARTICLE INFO ABSTRACT Article history: The objective of this study is to examine the role of organizational Received commitment as a mediator between Islamic Work Ethic (IWE) and attitudes Revised toward organizational change. Research was conducted in Islamic bank Accepted XYZ region East Java, Bali and South East Nusa. The samples consist of all 81 employees as respondent. Data will be analysed by using warpPLS JEL Classification: method. In this study, organizational commitment categorized as affective commitment, continuance commitment and normative commitment. Then, attitudes toward organizational change consist of cognitive attitude Key words: toward change, effective attitude toward change, and behavioural tendency Islamic, Work Ethic, attitude toward change. The implication of the research, it is very important Organizational Commitment, for Islamic bank during changing to strengthen IWE and their employees Organizational Change, Sharia commitment for building attitude toward organizational change. Bank ABSTRAK DOI: 10.6084/m9.figshare.9849341 Tujuan dari penelitian ini adalah untuk menguji pengaruh komitmen organisasi sebagai mediator antara etika kerja Islami dan perilaku karyawan terhadap perubahan organisasi. Penelitian ini dilakukan di Unit Usaha Syariah PT Bank XYZ Jawa Timur Bali dan Nusa Tenggara. Sampel yang digunakan terdiri dari 81 responden. Analisa data menggunakan metode warpPLS. Pada penelitian ini, komitmen organisasi dikategorikan menjadi affective commitment, continuance commitment dan normative commitment. Selanjutnya, perilaku karyawan terhadap perubahan organisasi terbagi atas cognitive attitude, effective attitude dan behavioural tendency attitude. Pentingnya mengetahui seberapa besar hubungan etika kerja Islami dan komitmen organisasi pada karyawan bank syariah terhadap perubahan organisasi merupakan implikasi dari penelitian ini.
1. INTRODUCTION another and not a few who remain in conventional In Indonesia, which has a majority of Muslim banks population, almost all banks try to create Sharia Sharia banks or in some countries known as Business Units in their businesses. Not a few also Islamic Banks are sharia-based financial institutions have succeeded in becoming Sharia Banks, namely (Suryani, 2015). Sharia or Islamic law is an enforced Sharia banks that have spin-off from their previous principle guided by the Qur'an and Hadith. Unlike company (conventional banks). Until September conventional banks that refer to interest rates, 2018, according to data from the Financial Services Sharia banks have contracts based on profit sharing Authority (OJK) at ojk.go.id, in Indonesia there or transparency margin. were 13 (thirteen) Sharia Commercial Banks and 3 In the process of becoming a Sharia Commercial 4 Sharia Business Units. They competes each Bank (BUS) after being released from its holding other to dominate the market with a variety of company while still in the Sharia Business Unit products, but the maximum socialization has not (UUS), many things need to be prepared. Changes been carried out in the community so that in organizational structure, information systems, customers tend to only try one Sharia bank to product features to branch office locations will
* Corresponding author, email address: [email protected] often be found in the spin-off process of Sharia Sharia Work Ethic (IWE) on employees attitude to banks from their holding company. For this reason, organizational change with organizational the readiness of human resources (employees) is commitment as mediator. This research was also one of the factors in the success of the Sharia conducted on one of Sharia Banking in Indonesia. bank spin-off process towards a better. According to Yousef (2000), changes in the environment will 2. THEORETICAL FRAMEWORK AND be followed by companies to fulfill existing market HYPOTHESES demand. Changes in the organization can take the Islamic Work Ethic form of changes in structure, vision, mission, In Islam, work is an obligation and form of human capital, and information technology. worship to Allah SWT as a sincere effort that Change becomes important thing in the encourages each individual to create a work that is development of an organization as a form of beneficial to themselves, others and all humanity. organizational flexibility towards its environment. Islam has clear rules for the ummah in carrying out When there is a change in a company, morals a work activity. According to Yousef (2001), work and ethics work is an important capital for the ethics with the concept of religion are more success of change. Having good morals and ethics developed in western countries using the concept of work will certainly have a good impact on an of Protestant Work Ethic (PWE) carried by Max organization (Khadijah, Kamaludin and Salin, Weber. Islamic Work Ethic (IWE) and PWE each 2015). Some company losses are caused by have similarities in the focus of cooperation, employee morale that is not appropriate with the commitment, dedication to work, and avoiding the company's vision and mission. It is undeniable that collection of wealth in ways that are not ethically bringing Sharia labels makes customers expect a appropriate (Khan et al 2013). Added by Yousef value added in Sharia banking that will be different (2000), PWE has roots in Protestant and from conventional banking. Meanwhile, the reality Philosophical ideology, while IWE is guided by the is that the majority of human resources in Sharia Qur'an as a holy book and Sunnah (sayings and banking have had a career in conventional banking. actions of the Prophet Muhammad SAW). For this reason, the need to apply a value added in Sharia banking, namely Islamic Work Ethics, so Organizational Commitment that employees work with appropriate work ethics, According to Anik and Arifuddin (2003), not only products that are in accordance with organizational commitment is a psychological Islamic law. condition or orientation of members in the Khadijah, Kamaludin dan Salin (2015) in organization to work more extra without being journal Islamic Work Ethics Practice among Employees forced to achieve the goals of the organization. By of Banking Sector, explained Sharia work ethics in 4 having a commitment in organization that is (four) components, namely Effort, Teamwork, something that is more than passive loyalty to the Honesty and Accountability. The study shows the organization, so employees will play an active role results that Sharia work ethics have a positive effect in being responsible and contributing positively to on organizational commitment to work. Hayati and the company where they work. Caniago (2012) added that Islamic Work Ethics and Added by Wartini and Harjiyanti (2014) that intrinsic motivation have impact on job organizational commitment creates loyal and satisfaction, organizational commitment, and proactive employees in establishing relationships employee performance. If a company has between people in a corporate environment. This is employees with high Islamic Work Ethics, it will caused by employees who have high organizational have a positive effect on job satisfaction, commitment who will have the will from within organizational commitment, and employee themselves to produce the best and more performance. By working in accordance with the responsible for the success and welfare of the ethics taught in Islam, human resources company. (employees) who work in Sharia banks will be Allen and Meyer (1993) distinguishes better equipped to apply these values in the work organizational commitment into three dimensions: environment. Affective commitment is based on emotional ties from From the gap phenomenom and those research individuals because of a high sense of belonging to presented, there are problems related to the the organization, Continuance commitment arises employees attitude in the acceptance of change. The because of the need for something primary such as aim of this research is to determine the influence of salary and other benefits obtained by an employee
92 of a company or something not found elsewhere, significant influence between Islamic Work Ethic and Normative commitment is a reflection of and Organizational Commitment in Malaysian individual personal values who survive in an Banking Sector (Manan et al, 2013). The same point organization because they have the awareness that is shown by Yousef (2000) which state that a person should be done. The same point is shown by who does good Islamic Work Ethics seems to be Salahudin et al (2016) which state Affective more committed to the organization the the poor commitment as a sign of positive work experience one. that became the reason of the employee want to In Islam, every Moslem have to be responsible stay longer in organization because they meet the for what they did. So that the employee must be expectation of fulfilling individual needs. survive through Quran an Hadits as their guidance. Continuance commitment is a willingness to stay in Then, regardless of what circumtances are, they an organization based on financial issues which will face and live as a worship to Allah SWT. means about cost if leaving or stay in the Thus, it can be formulated hypotheses : organization. Normative commitment is related with H1 : Islamic Work Ethic directly and positively social loyalty norm to organization, such as the influence Organizational Commitment. perceived to meet other’s expectation or need to meet valued outcomes. Employee’s Attitude towards Organizational Change, Organizational Commitment and Islamic Employee Behavior towards Organizational Work Ethic Change Based on Khadijah, Kamaluddin and Salim In developing an organization the main focus (2015), Islamic Work Ethic divided into effort, is on aspects of human resources and social aspects. teamwork, honesty and accountability. Their Bennis (1969) explained in Yousef (2000) that the research shows that the employees of Islamic development of an organization almost always Banking of Malaysia have a good organizational focuses on values, attitudes, leadership, commitment. The employees with good organizational climate, and worker variables. Thus, organizational commitment have trust to the the readiness of human resources to deal with company in making policy because they always changes in the organization needs to be prepared support anything to achieve the company’s goal. from the beginning of joining the organization. Thus, they more likely to accept the organizatioal According to Dungham et al (1989) individual change well. behavior towards organizational change is divided Wartini and Harjiyanti (2014) explained that into 3 categories: namely Cognitive Attitude, in this Islamic Work Ethic related positively and behavior, an individual tends to avoid change. significant on employees attitude towards Then, Affective Attitude is to respond to changes in organizational change through Civil Servants as the organization positively and support change in a their respondent. Civil Servants are the employee better direction. Next is Behavioral Tendency, namely of government office. Their working environment individuals who are eager to welcome change by also can be changed easily based on the taking the initiative to approach in various ways. government policy. As mentioned by Yousef (2000) in his research that Organizational Commitment is the second divided into three dimensions namely Cognitive determinant factor of the employees attitude Attitude towards Change is an empirical factual towards organizational change, after union knowledge, Affective Attitude towards Change is any membership (Iverson, 1996). If an employee already emotionally respond to the change in positive way, join union membership, then it will increase sense and Behavioral Tendency Attitude towards Change is of belonging the employees to company. By having reaction to support the changing as their goal to get a good sense of belonging to the company, it also better achievement. increase the employee commitment to the organization. Thus, they will be easily to adapt Islamic Work Ethic and Organizational with the organization changing. Commitment Mentioned by Ali (1999) that Islamic Work As mentioned by Salahudin et al (2015), Ethic influence the organizational change in Uni Islamic Work Ethic can affect organizational Emirate Arab. “Allah will not change the condition of commitment which divided into affective people until they change what is in themselves.” (Q.S. commitment, normative commitment and 13:11) it shows that understanding of Islamic Work continuance commitment. There is a positive and Ethics is adaption to the organization changing that
93 can bring goodness to ummat. The population of this study was all of Completed by Yousef (2000) explained that employees in Unit Usaha Syariah and Office three of organizational commitment (affective, Channeling PT Bank XYZ Jatim Bali Nusra, which continuance and normative) can be the mediator of consist of 81 employees. Thus in the research used the influence between Islamic Work Ethic on census method. Variables that examined in this Employees attitude towards organizational change. study are Islamic Work Ethic, Organizational Thus, the good preparation of Islamic Work Ethics Commitment and Employee’s Attitude towards and Organizational Commitment of the employees Organizational Change. Data will be analysed by can be related in planned organizational change. using warpPLS method. Thus it can be taken hypotheses : The following instruments were used in this H2 : Organizational Commitment (affective research are Islamic Work Ethic scale by Ali (1988) commitment, continuance commitment, dan in Yousef (2000) consist of 17 items, Organizational normative commitment) directly and positively Commitment scale by Meyer an Allen (1991) in influence Employees Attitudes towards Yousef divided into 18 items and Employees Organizational Change (cognitive attitude toward Attitude towards Change by Dunham et al (1989) in change, affective attitude toward change dan Yousef (2000) consist of 18 items. Those behavioral tendency attitude toward change). instruments were measured by five points Likert H2a : Affective commitment directly and positively scale which 1 indicating strongly disagree and 5 is influence Employees Attitudes towards strongly agree. Organizational Change (cognitive, affective dan behavioral tendency attitude toward change). 4. DATA ANALYSIS AND DISCUSSION H2b : Continuance commitment directly and The Analysis of Respondent’s Characteristics negatively influence Employees Attitudes towards All of the questionnaire were collected and it Organizational Change (cognitive, affective dan shows the characteristics of employees in Unit behavioral tendency attitude toward change). Usaha Syariah and Office Channeling PT Bank XYZ H2c : Normative commitment directly and Jatim Bali Nusra. The number of population is 81 positively influence Employees Attitudes towards respondents, in which 41 (49,4%) are male. The Organizational Change (cognitive, affective dan majority among them are 26-35 years old (63%). behavioral tendency attitude toward change). From eductaion side, almost most of them (86,4%) H3 : Islamic Work Ethics directly and positively are undergraduate degree. Then, the majority of influence Employees Attitudes towards them are working under 5 years (49,4%) and Organizational Change (cognitive, affective dan around 5 ≤ 10 years (32,1%). It means the rest are behavioral tendency attitude toward change). working > 11 years(18,5%). H4 : Organizational Commitment (affective Reliability and Validity Test commitment, continuance commitment, dan normative The realibility test of this research was done by commitment) mediates the influences of Islamic using the reference to the value of composite Work Ethics on Employees Attitudes towards reliability and cronbach alpha for independent Organizational Change (cognitive, affective dan variable. behavioral tendency attitude toward change). Table 1. Result of Validity and Reliability INDICA- COMP. RELIA- CRONBAC RELIABIL- VALIDI- NO H4a : Affective commitment mediates the influences TOR BILITY H ALPHA ITY TY of Islamic Work Ethics on Employees Attitudes 1 IWE 0,932 0,922 Reliable Valid towards Organizational Change (cognitive, affective 2 AC 0,883 0,845 Reliable Valid dan behavioral tendency attitude toward change). H4b : Continuance commitment mediates the 3 CC 0,921 0,901 Reliable Valid influences of Islamic Work Ethics on Employees 4 NC 0,882 0,845 Reliable Valid Attitudes towards Organizational Change 5 CA 0,904 0,871 Reliable Valid (cognitive, affective dan behavioral tendency attitude 6 NA 0,879 0,827 Reliable Valid toward change). H4c : Normative commitment mediates the influences 7 BTA 0,915 0,886 Reliable Valid of Islamic Work Ethics on Employees Attitudes Source : WarpPLS 5.0 (2019) towards Organizational Change (cognitive, affective dan behavioral tendency attitude toward change). Based on Table 1, all of the indicators which consist of Islamic Work Ethic (IWE), Affective 3. RESEARCH METHOD Commitment (AC), Continuance Commitment
94 (CC), Normative Commitment (NC), Cognitive The next step is to examine the influence Attitude (CA), Affective Atitude (AA) and between those variables whether it is significant or Behavioral Tendency Attitude (BTA) are insignificant. This study using Partial Least Square reliable because the value of composite reliability (PLS) warpPLS 5.0. and croncbach alpha >0,60. Hypotheses Testing
Table 2. Estimation Result of Hypotheses P- Variable value Beta R Square Result Variable P-value Beta R Square Result IWE -> AC <0,01 0,48 0,23 significant AC -> CA 0,06 0,17 0,23 Insignificant AC -> AA 0,22 0,08 0,31 Insignificant AC -> BTA 0,32 0,05 0,28 Insignificant IWE -> CC <0,01 0,33 0,33 significant CC -> CA 0,21 0,09 0,23 Insignificant CC -> AA <0,01 0,35 0,31 Significant CC -> BTA 0,01 0,24 0,28 Insignificant IWE -> NC <0,01 0,43 0,18 significant NC -> CA 0,02 0,22 0,23 Significant NC -> AA <0,01 0,29 0,31 Significant NC -> BTA 0,04 0,19 0,28 Significant IWE -> CA <0,01 0,32 0,23 significant IWE -> AA <0,01 0,33 0,31 significant
IWE -> BTA <0,01 0,43 0,28 significant Source : WarpPLS 5.0 (2019) accepted and the rest are rejected. The point of rejected are p value of AC and CC to AA are > 0,05. According to the Table 2 above, Islamic Work It still proves that there is positive and significant Ethic (IWE) variable to Organizational Commitment influence between IWE, Organizational (AC, CC and NC) has p value <0,05. It means that Commitment and Employees Attitude towards IWE directly and positively influence Organizational Change, but the insignificant result came from Commitment. Thus, H1 is accepted. Affimative Commitment to Employee Attitudes Next, in Organizational Commitment (AC, CC, toward Organizational Change and Cognitive and NC) variable to Attitude towards Commitment to Cognitive Attitude. Organizational Change (CA, AA and BTA) only The implication for the organization could be NC that shown the p value <0,05. This means, useful as an effort to implement the better work partially Organizational Commitment has influence ethic environment. Implication for the future to Attitude towards Organizational Change. Thus, research is to expand the research by adding other H2 is rejected. variables, such as employee satisfaction, turnover, Then, IWE variable to Employees Attitude organization performance or any other human towards Organizational Change has p value < 0,05 resource management subject. The relationship and positive beta value. It means that IWE directly between Islamic Work Ethic, Organizational and positively influence Employees Attitudes Commitment and Employees Attitude towards towards Organizational Change (CA, AA and Organizational Change also worth to study in other BTA). Thus, H3 is accepted. sample and object. Last, the result of the test, beta value of IWE to This study, like other studies, has its own Employees Attitudes towards Organizational limitation. The specific organization and area in Change is higher than beta value of Organizational this study creates less than 100 respondents, which Commitment to Employees Attitudes towards in turn might limit the ability to generalize its result Organizational Change. This means that H4 is and conclusion. rejected. Then, suggestion to the next researcher to do this study into wider sample and respondents in 5. CONCLUSION, IMPLICATION, different way. It can be conducted to the employees SUGGESTION, AND LIMITATIONS all sharia banking or non financial industry, also As a conclusion, half of the hypotheses are the comparative study between different industry.
95 Khan, K., Abbas, M., Gul, A. dan Raja, U. (2013). REFERENCES Organizational Justice and Job Outcomes : moderating role of Islamic Work Ethic. Ali, A. (1988). Scaling an Islamic Work Ethic. The Journal of Business Ethics, DOI Journal of Social Psychology : 128(5), 575-583 10.1007/s10551-013-1937-2 Ali, A. J dan Azim, A. (1996). Islamic Work Ethic Manan, S. K., Kamaluddin, N., dan Puteh Salin, A. and Organisational Development. Chinmaya S. A. (2013). Islamic Work Ethics and Management Review Organizational Commitment: Evidence from Anik, S. dan Arifuddin (2003). Analisis Pengaruh Employees of Banking Institution in Komitmen Organisasi dan Keterlibatan Kerja Malaysia. Pertanika J. Soc. Sci. & Hum. 21 (4): terhadap Hubungan antara Etika Kerja Islam 1471 – 1489 (2013) dengan Sikap Perubahan Organisasi. JAAI Meyer, J.P., dan Allen, N.J. (1991). A Three- Volume 07 No. 02, Desember 2003. ISSN : 1410 Component Conceptualization of – 2420 Organizational Commitment. Human Dunham, R.B., Grube, J.A., Gardner, D.G., Resource Management Review : Volume 01, No. Cummings, L.L., dan Pierce, J.L. (1989). The 01., 1991, pages 61-89 Development of an Attitude toward Change Mohammad, J., Quouquab, F., Makhbul, Z. M., dan Instrument. Paper presented at Academy of Ramayah, T. (2016). Bridging The Gap Management Annual Meeting, Washington DC between Justice and Citizenship Behavior in Ghozali, Imam. (2001). Aplikasi Analisis Multivariate Asian Culture. Emerald Insight : Cross Cultural dengan program SPSS. BP Undip Semarang & Strategic Management, Vol. 23, No. 04, 2016 Ghozali, I. dan Latan, H. (2015). Partial Least Squares pp 633-656 : Konsep, Teknik dan Aplikasi menggunakan Ravangard, R., Sajjadnia, Z., Jafari, A., Shahsavan, Program SmartPLS 3.0. BP Undip N., Bahmaie, J., dan Bahadori, M. (2014). The Hayati, K. dan Caniago, I. (2012). Islamic Work Association between Work Ethics and Ethic: The Role of Intrinsic Motivation, Job Attitudes towards Organizational Changes Satisfaction, Organizational Commitent and among Administrative, Financial, and Job Performance. Procedia – Social and Support Employees of General Teaching Behavioral Sciences 65 (2012) 272-277 Hospitals. Journal of Medical Ethics and History Hendryadi. (2018). Islamic Work Ethics (IWE) : of Medicine : 2014, 7 : 12 Tinjauan dan Penelitian. Jurnal Riset Salahudin, S.N., Baharuddin, S. S., Abdullah, M. S., Manajemen dan Bisnis (JRMB) Fakultas dan Osman, A. (2016). The Effect of Islamic Ekonomi UNIAT : Vol. 03, No. 02, Juni 2018 : Work Ethics on Organizational Commitment. 183-190 P-ISSN 2527-7502 E-ISSN 2581-2165 Procedia Economics and Finance 35 (2016)582- Iverson, R. D. (1996). Employee Acceptance of 590 organizational change : The role of Siregar, Syofian. (2014). Statistika Deskriptif untuk organization commitment. The International Penelitian dilengkapi Perhitungan Manual dan Journal of Human Resource Management 7 : 1 Aplikasi SPSS 17. Jakarta : PT Raja Grafindo February 1996 Persada Jahangir Y. F., Razie P. S., Forgh R., Yaghoub Z. A. Suryani. (2015). Customers Perceived Value (2012). Investigating the Relationship towards the Service in Islamic Banking : between Islamic Work Ethics and Confirmatory Factor Analysis. Journals of Organizational Commitmentand Its Economics, Business and Accountancy Ventura : Components (A Case Study of Gilan Volume 18, No. 02, August-November 2015, Province Police Employees). International pages 201-212 Journal of Business and Behavioral Sciences Vol Wartini, S., dan Harjiyanti. (2014). Organizational 2, No 12, Dec 2012 Commitment as The Black Box to Connect Khadijah, S., Kamaluddin, N., Salin, A.S.A.P. The Islamic Box Ethic and Employees (2015). Islamic Work Ethics Practice among Behavior Toward Organizational Change. Employees of Banking Sectors. Middle-East Jurnal Dinamika Manajemen : JDM Vol 5, No, Journal of Scientific Research 23 (5) : 924-931, 2, 2014, pp : 228-240 2015. ISSN 1990-9233 Widyanti, R., Thoyib, A., Setiawan, M., dan Solimun. (2012). The Perception of Individual and Organizational Careers in Increasing the
96 Organizational Commitment. Journals of as a mediator of the relationship between Economics, Business and Accountancy Ventura : Islamic Work Ethic and Attitudes toward Volume 15, No. 02, August 2012, pages 231- Organizational Change. Human Relation 2000; 244 53; 513 Yousef, D. A. (2000). Organizational Commitment
97 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings
The Effect of Loan to Deposit Ration, BOPO, Non-Perform- Loan, and Net Interest Margin Against Lending Rate Base
Herman Kristyono
STIE Perbanas, Jl. Nginden Semolo No.34-36, Nginden Jangkungan, Kec. Sukolilo, Kota SBY, Jawa Timur 60118
ARTICLE INFO ABSTRACT Article history: This research was conducted to determine the effect of LDR, BOPO, NPL. NIM to Received BLR. The main purpose of this study was to analyze the influence of Loan to Deposit Revised Ratio (LDR), BOPO, Non-Performing Loans (NPL) and Net Interest Margin (NIMI) Accepted for determining Corporate Base Lending Rate (BLR). Secondary data sources were taken from the Financial Services Authority (OJK). The sampling technique uses pur- JEL Classification: posive sampling at Government Banks in Indonesia every quarter from 2013 to 2018. The data analysis technique uses panel data. Based on research shows that simulta- neously Loan To Deposit Ratio (LDR), BOPO, Non-Performing Loan (NPL) and Net Key words: Interest Margin (NIMI) variables significantly influence the Base Lending Rate Base Lending Rate (BLR), Loan to De- (BLR) at a confidence level of 37.92%. In addition, the values shown by the coefficient posit Ratio (LDR), BOPO, Non-Per- of determination indicate that the Loan to Deposit Ratio has a significant positive forming Loans (NPL) and Net Interest effect on the Base Lending Rate (BLR), BOPO has a significantly positive effect on Margin (NIM). the Base lending rate, the Non-Performing Loan (NPL) has a negative effect on the Base Lending Rate (BLR), Net Interest Margin (NIM) have a significant negative DOI: 10.6084/m9.figshare.9849290 effect on the Base Lending Rate (BLR).
ABSTRAK Penelitian ini dilakukan untuk mengetahui Pengaruh LDR, BOPO, NPL. NIM ter- hadap BLR. Tujuan utama penelitian ini untuk menganalisis pengaruh Loan to Deposit Ratio (LDR), BOPO, Non-Performing Loan (NPL) dan Net Interest Margin (NIMI) untuk penentuan Base Lending Rate (BLR) Korporasi. Sumber data sekunder diambil dari Otoritas Jasa Keuangan (OJK). Teknik pengambilan sampel menggunakan purpos- ive sampling di Bank Pemerintah di Indonesia setiap triwulan dari 2013 hingga 2018. Teknik analisis data menggunakan data panel. Berdasarkan penelitian menunjukkan bahwa secara simultan variabel Loan to Deposit Ratio (LDR), BOPO, Non-Performing Loan (NPL) dan Net Interest Margin (NIMI) berpengaruh signifikan terhadap Base Lending Rate (BLR) pada tingkat kepercayaan 37,92%. Selain itu, dari nilai-nilai yang ditunjukkan oleh koefisien determinasi menunjukkan bahwa Loan to Deposit Ratio ber- pengaruh Positif secara signifikan terhadap Base Lending Rate (BLR), BOPO Ber- pengaruh Positif secara signifikan terhadap Base lending rate, Non-Performing Loan (NPL) berpengaruh Negatif terhadap Base Lending Rate (BLR), Net Interest Margin (NIM) berpengaruh Negatif tidak signifikan terhadap Base Lending Rate (BLR).
Kata Kunci : Base Lending Rate (BLR), Loan To Deposit Ratio (LDR), BOPO, Non- Performing Loan (NPL) dan Net Interest Margin (NIM).
1. INTRODUCTION borrowers. Mindset that banking profits are only de- The banking industry has experienced rapid devel- rived from interest on loans has now shifted to not opment from the time of pre-deregulation to post- only from interest income on loans but coupled with banking deregulation. For the National Banking it is the existence of e-channel e-channel income owned very necessary that national banking architects cre- by banks, or what we know as feebase income. In ate a healthy and strong banking system. As we determining the credit interest rate becomes very know that banking activities are three dominant in- important for national banks, especially for the na- dividuals namely the bank itself, depositors and tional economy so that the Central Bank in this case
* Corresponding author, email address: [email protected]
in Indonesia, namely Bank Indonesia must deter- of Base Lending Rate, this triggers the ups and mine the benchmark interest rate known as the BI downs of third party deposits, but what if these third rate. On the other hand, the determination of credit party funds are not used productively. LDR (Loan to interest rates will trigger consumers' decisions in Deposit Ratio) is a comparison of third party funds finding loan facilities. with credit or a type of credit, which if not distrib- Bank Indonesia began March 31, 2011, requiring uted causes many funds to be unemployed. The banks to widely announce base lending rates (SBDK) large number of unemployed funds will result in to the public. The policy was carried out to increase lower profitability (Adusei, 2015). According to Po- transparency regarding banking products. This ar- lat and Al-Khalaf (2014) in his research revealed that rangement will improve good governance and be a LDR is a measure of liquidity and shows the ability target for encouraging healthy competition in the of banks to provide additional loans. banking industry through the creation of better mar- Starting in 2014, Bank Mandiri and BRI experi- ket discipline. Transparency will also increase con- enced a decrease in LDR, each of which Bank Man- sumer protection because it can form the same level diri dropped 0.95 percent and Bank BRI dropped of playing field between banks and customers / the 6.86 percent, while Bank BTN from 2014 to June 2018 public, so that the costs and risks of bank credit appeared to have decreased from minus 0.08 percent products will be more easily understood in order to in 2014, minus 6.12 percent in 2015, even though the support better credit decision making by customers. LDR was already above 100%. With regard to the de- BI also explained, the prime lending rate calcu- cline in LDR, it certainly has an impact on the unem- lation is the result of the calculation of three compo- ployment of these funds so that the profit is low, nents, namely: Cost of funds for credit or (HPDK), does the bank dare to lower the Base Lending Rate overhead costs incurred by banks in the process of or the Base Lending Rate is smaller with these con- giving credit and profit margins set for credit activ- ditions? The recommended percentage of the LDR ity. by Bank Indonesia, the LDR percentage should be in Criteria for banks that are required to publish the range of 85 percent to 110 percent (Manurung SBDK are Banks that on and / or after February 28, and Rahardja, 2004: 112). If you see the recom- 2011 based on the position of the Commercial Bank mended LDR from Bank Indonesia, it appears that Monthly Report (LBU) have total assets of Bank BTN in the position of June 2018 is already Rp.10,000,000,000,000.00 (ten trillion rupiah) or above 110%, meaning that Bank BTN is already in an more are required to publish information SBDK. The unhealthy condition according to Bank Indonesia, above prime lending rate does not take into account because Bank BTN lacks the capacity of funds that the risk premium component, the amount of which are ready to lend. depends on the bank's assessment of the risk of each The phenomenon of the development of tech- debtor / group of debtors such as the amount, time nology in the current decade has made banks strive period, risk, and financed projects. to utilize technology, hoping to streamline bank op- Banking income from loan interest in operations erational costs. According to Brando Pratenta Gint- is influenced by bank operational costs (BOPO). ing and Syarief Fauzie (2013), the BOPO variable BOPO is a ratio group that measures the efficiency partially has a negative but not significant effect on and effectiveness of a company's operations by com- retail prime lending rates. According to Darna paring one to another. The lower the BOPO means (2012), prime lending rate is associated with an in- the more efficient the bank is in controlling its oper- crease or decrease in BOPO although it is very low ational costs, with the existence of cost efficiency the and the amount of prime lending rate is not only in- greater profits the bank will get. fluenced by the BI rate and the amount of BOPO or According to Hashifah Nabilah, Wisnu the efficiency of bank operating costs, but is also in- Mawardi (2016), Base lending rate is the process of fluenced by other factors such as the expected prof- implementing bank funding management. In a more itability of banks, competition and others -other. competitive banking industry, banks are required to The increasing ratio reflects the lack of ability of offer low interest rates on loans. The base lending banks to reduce operational costs and increase oper- rate or Base Lending Rate becomes a reference for ating income which can cause losses because banks debtors in choosing credit services, so it must be are less efficient in managing their business (SE, In- published. ternal BI 2004). Bank Indonesia has determined the Associated with the calculation of Base Lending best number for BOPO ratios is below 90 percent, be- Rate or the Basic Credit Interest Rate, namely the cause if the BOPO ratio exceeds 90 percent to close Cost of Funds is part of the component calculation to 100 percent then the bank can be categorized as 99
inefficient in carrying out its operations. In a Circular Letter of Bank Indonesia SE BI Mardi Liya Faradila, 2016, revealed that if the No.15 / 1 / DPNP, Prime Lending Rate is the lowest NPL rises, profitability will decline and vice versa. interest rate used as a basis for banks in determining This happens because the bank loses the oppor- the lending rates charged to bank customers based tunity to earn income if the level of problem financ- on the Bank Indonesia Circular Letter, the calcula- ing increases so that it has a negative impact on prof- tion of prime lending rate does not include a risk itability in this case, ROA. predictive component thus, the prime lending rate The number of NPLs in banks in a country can component consists of cost of funds, overhead costs cause economic stagnation (Zablon, 2015). Non-per- and profit margins. The formula for determining forming loans are non-performing loans that de- SBDK according to SE BI No.15 / 1 / DPNP 2013 is: scribe the situation of loan repayment agreements SBDK = COLF + OC + SPREAD + CKPN + TAX that run the risk of default on loans, and even tend With, COLF = Cost Of Loanable Fund, OC = Over- to lead to or suffer potential losses. The potential loss head Cost, SPREAD = Spread, CKPN = Allowance referred to can be in the form of write-offs, causing for impairment losses, TAX = Estimated tax on prof- the burden of credit write-offs by banks and this will its obtained. reduce the bank's net profit (Permatasari and Retno, 2014). According to Roman and Şargu (2013), the ra- Effect of LDR, NPL, BOPO, NIM on Base Lend- tio of problem loans to total loan ratio is used to ing Rate measure the quality of loans and the quality of bank The relationship between these variables is ex- assets indicated by NPLs. pected to explain the effect of the independent vari- Revenue is an important part that must be able (influence) on the dependent variable (bound). achieved by all companies, including banks, one of The dependent variable here is the Base Lending the steps in maximizing revenue is to measure the Rate. While the independent variable (influence) ability of banks to manage their productive assets in consists of LDR (Loan to Deposit Ratio), BOPO (Op- generating net interest income, or known as NIM erational Cost to Operating Income), NPL (Non Per- (Net Interest Margin). forming Loan) ratio, NIM (Net Interest Margin). From the description above, by looking at the Where in this study intended to answer whether the Base Lending Rate, Loan to Deposit Ratio, Non Per- Loan to Deposit Ratio, BOPO, Non Performing Loan forming Loan, BOPO and Net Intererest Margin Ratio and Net Profit Margin affect the Base Lending data, the researchers took the title "Effect of Loan to Rate. Deposit Ratio, BOPO, Non Performing Loans, and H1: Loan to deposit ratio, BOPO, NPL and NIM Net Interest Margin Against Base Lending Rate on simultaneously influence the Base Lending Rate. State-Owned Banks in Indonesia for the period Jan- uary 2013 - December 2018 ". Relationship of Loan to Deposit Ratio (LDR) to Base Lending Rate. 2. THEORETICAL FRAMEWORK AND HY- In the research of Hashifah Nabilah, Wisnu POTHESES Mawardi, 2016, the deposit rate is the interest paid Theory by banks to depositors who have invested their According to Kasmir (2014: 14) in his book the funds in the form of deposits and are paid based on Bank is a business entity that collects funds from the a predetermined grace period. The amount of inter- public in the form of deposits and channel them back est offered, attracts people to invest their funds in to the public in the form of credit and or other forms the form of deposits. This provides benefits for in order to improve the lives of many people. While banks to plan lending to their debtors (Hasibuan, the banking business includes three activities, 2006: 79). namely raising funds, channeling funds and provid- However, the proportion of deposits that domi- ing other bank services. nates the composition of third party funds makes the According to Law No. 10 of 1998 dated Novem- cost of funds larger due to the large interest rates on ber 10, 1998 concerning banking, it can be concluded deposits, so banks set a higher BLR. This is sup- that the banking business includes three activities, ported by Mbao et al. (2014) which states that an in- namely raising funds, channeling funds, and crease in deposit rates has an impact on increasing providing other bank services. The activity of col- lending rates and Sudono (2011) which states that in- lecting and distributing funds is the main activity of terest rates have a positive influence on BLR. the bank while providing other bank services is only H2: Loan to Deposit Ratio has a positive effect a supporting activity on Base Lending Rate (BLR). 100
Relationship of BOPO (Operational Cost to Op- obstacles in channeling bank credit. In Aloisius Ir- erating Income) to Base Lending Rate. tantyo Prabowo's research Harjum Muharam (2009) Operating costs and operating income (BOPO) the Non Performing Loan variable (NPL) had no sig- are a reflection of bank efficiency. The higher the nificant effect on lending rates. But according to BOPO, the higher the operational burden borne by Arisandi's research (2007) NPL has a positive effect the bank which can have an impact on the determi- on lending rates. nation of credit interest rates. The loan interest rates H4: Non Performing Loans (NPL) have a posi- are derived from the calculation of the prime lend- tive effect on the Base Lending Rate (BLR). ing rate (SBDK) and the risk premium of each cus- tomer. So indirectly the ups and downs of BOPO Relationship of Net Interest Margin (NIM) to will affect the determination of the prime lending Base Lending Rate rate of each bank. Net Interest Margin (NIM) is a ratio used to From the research of Brando Pratenta Ginting measure the level of profitability, which is the level Syarief Fauzie (2013) concluded that the BOPO vari- of bank effectiveness between net interest income able partially has a negative but not significant effect compared to the average earning asset. The higher on retail prime lending rate. In line with Darna's re- the Net Interest Margin (NIM) ratio shows the more search (2012) revealed that BOPO has an influence effective the bank's activities in making a profit. In on SBDK. This study is consistent with the results of line with this, the theory of money supply presented research obtained by Darna (2012) where in the re- by Keyness shows that there are other factors out- sults of his study revealed the value of prime lend- side the interest rate factor that affect lending. This ing rate weakly associated with the ups and downs is reflected in the level of interest income that is of the BOPO ratio. The weak relationship that occurs higher than the interest expense, this shows that the between BOPO and SBDK means that the rise or fall debtor makes payments well and shows the econ- of BOPO is not necessarily followed by an increase omy is in good condition. Such conditions can indi- or decrease in retail SBDK charged by each state- cate that the money supply can be done by banks be- owned bank to the customer. cause of good economic conditions (Sukirno, 2011: The results of this study are also supported by 302). the results of a study by Nusantara (2009) which re- According to Satrio B. Haryanto's research, En- vealed a negative value shown by BOPO indicating dang Tri Widyarti 2017, the results of the study show that the smaller the BOPO indicates the more effi- that Net Interest Margin (NIM) has a significant in- cient the bank is in carrying out its business activi- fluence and positive impact on lending. According ties. The results of this test are in accordance with to research conducted by Iwanicz and Witkowski the theory put forward by Riyadi (2004) which states (2015) shows that Net Interest Margin (NIM) has a that the lower the BOPO ratio means the better the positive effect on lending. Another study conducted performance of the bank's management because it is by Prayudi (2011) states that Net Interest Margin more efficient in using existing resources in the com- (NIM) has a positive influence on lending. Thus it is pany. estimated that Net Interest Margin (NIM) has a pos- H3: BOPO has a positive effect on the base lend- itive influence on lending. ing rate. Other research conducted by Igan and Pinheiro (2011) states that Net Interest Margin (NIM) has a Relationship of Non Performing Loans to Base positive effect on lending. Researchers suspect that Lending Rate if the NIM has a positive effect on lending, then the Non Performing Loans (NPLs) reflect bank NIM has a negative effect on lending rates. credit risk, where the higher the level of NPLs, the H5: Net Interest Margin (NIM) has a negative greater the credit risk borne by the bank. As a result effect on the Base Lending Rate (BLR). of high NPLs, banks will be more careful (selective) in lending. This is due to the potential for uncollect- Framework ible loans. The high NPL will increase risk premiums The picture frame of mind is as follows: which have an impact on high lending rates. Exces- sively high loan interest rates will reduce people's demand for credit. The high NPL also resulted in the emergence of greater reserves, so that in the end the bank's capital also eroded. Thus the magnitude of NPLs is one of the 101
NPL = (Total Non-performing Loans) / (Total Loans) X100%
Net Interest Margin (NIM) The Net Interest Margin Ratio is used to meas- H 1 ure the ability of bank management to manage their productive assets to generate net interest income. Net interest income is derived from interest income less interest expense from the pooled funds. Sources
of bank funds consist of: (1) funds from the first party (own capital), (2) funds from second parties 3. RESEARCH METHOD (loans from other banks), (3) funds from third parties Research variable (funds from the public). NIM ratio in state-owned Based on the theoretical basis and research hy- banks in Indonesia from January 2013 to December potheses on the influence analysis, the variables 2018. used in this study include the independent variables NIM = (Net Interest Income) / (Earning Assets) and the dependent variable which the independent X100% variables consist of: Base Lending Rate 1. Loan To Deposit Ratio (LDR): X1 In a Circular Letter of Bank Indonesia SE BI 2. (BOPO): X2 No.15 / 1 / DPNP, Prime Lending Rate is the lowest 3. Non Performing Loans (NPL): X3 interest rate used as a basis for banks in determining 4. Net Interest Margin (NIM): X4 the lending rates charged to bank customers based 5. Base Lending Rate (BLR): Y on the Bank Indonesia Circular Letter, the calcula- The dependent variable in this study uses Non tion of prime lending rate does not include a risk Base Lending Rate (BLR) symbolized by Y while the predictive component thus, the prime lending rate independent variables include Loan To Deposit Ra- component consists of cost of funds, overhead costs tio (LDR), BOPO, Non Performing Loans (NPL), Net and profit margins. BSL (Base Lending Rate) or Interest Margin (NIM) symbolized by X1, X2, X3 , SBDK ratio is taken from OJK Publication Report X4. data for the period of January 2013 to December Loan To Deposit Ratio (LDR) 2018. This ratio is used to find out how much the Determination of Samples Bank's ability to repay obligations to customers who The population in this study is the Financial Re- have invested their funds by providing loans to ports of SOE Banks in Indonesia, namely Bank Man- banks BUMN in Indonesia from January 2013 to De- diri, Bank BRI, Bank BNI '46, and Bank BTN. cember 2018. Formula: Data Types and Sources LDR = (Total Credit) / (Total Deposits) x100% The sampling of the population is done by using Operational Costs Operating Income a purposive sampling method, which is a sampling The ratio of Operating Costs to Operating In- technique based on certain criteria determined in ac- come (BOPO) or the ratio often called efficiency ratio cordance with the research objectives. The determi- is used to measure the ability of bank management nation criteria for sampling are the quarterly SOE in controlling operational costs to operating income Bank Publication Financial Reports for the period at state-owned banks in Indonesia from January 2013 to 2018. 2013 to December 2018. The formula Analysis Method BOPO = (Total Operating Costs) / (Total Oper- The analytical method used in this study is Mul- ating Income) X100% tiple Regression Analysis. This analysis is used to NPL (Non Performing Loan) test the effect of the five independent variables on Non-performing loan ratio (NPL) shows the the dependent variable. Following are the regression ability of bank management in managing non-per- equations used in this study: forming loans provided by banks. Credit in this case Yit = α + β₁ X1it-1 + β₂X2it-1 + β₃X3it-1 + β₄X4it-1 + is credit given to third parties, not including credit ei to other banks. Non-performing loans are loans with Information : substandard, doubtful and bad quality. NPL ratio at Yit = Base Lending Rate state-owned banks in Indonesia from January 2013 α = Constant to December 2018. β₁ - β4 = Regression Coefficient 102
X1t-1 = Loan To Deposit Ratio (LDR) Based on the results of the Chow test, the best ap- X2 t-1 = BOPO proach model results obtained using CE (Common X3 t-1 = Non Performing Loan (NPL) Effect), then the next test uses the Breusch-Pagan La- X4 t-1 = Net Interest Margin (NIM) grange Multiplier Test. BREUSCH-PAGAN test is i = Bank i (1,2,3,4) performed to choose the best estimation model be- t = Period to t (quarterly) tween Random Effect or Common Effect. The hypoth- esis is as follows: H0: Common Effect Model (CE), H1: 4. DATA ANALYSIS AND DISCUSSION Random Effect Model (RE), Reject H0 if Prob> Chi- Descriptive statistics bar2 = <α, Fail to Reject H0 if Prob> Chibar2 => α. Descriptive analysis is used to provide infor- From the Breusch-Pagan Test at STATA 12 the mation and general description of the data variables following results were obtained: used in the study, namely the variable Base Lending Table 4.3 Rate (BLR), Loan To Deposit Ratio (LDR), BOPO BREUSCH-PAGAN Test Results (Operational Costs Against Operational Income), Non Performin Loans (NPL ), Net Interest Margin Chibar2 (01) 0,000 (NIM). Descriptive Analysis provides a description of the minimum, maximum, average (Mean), and Prob>chibar2 1,000 Standard deviation of each of these variables. To find out the descriptive statistics of the research can From Table 4.3 above obtained Prob> chi2 = be seen in table 4.1 below: 1.0000 which means the value> α so that the conclu- Table 4.1 sion fails to reject H0 so that the best model of the Descriptive Statistics of Research Variables BREUSCH-PAGAN model is chosen. This test uses Variable N Min Max Mean Std. Dev. the Common Effect Model (CEM). BLR overall 96 9.75 12.5 10.5701 0.543264 Panel Data Regression Model through the Com- LDR overall 96 77.52 112.83 92.23802 9.398884 mon Effect Model (CEM) Approach BOPO overall 96 59.93 89.91 73.10698 8.125371 The results of the CEM approach panel data re- NPL overall 96 1.55 5.01 2.772188 0.9197119 gression are as follows: NIM overall 96 4.17 9.06 6.176458 1.311863 Table 4.4
Source: Secondary data processed Common Effect Model Panel Data Regression Results Hypothesis testing To determine the best test model approach to be Variable Beta P>(t) used, a panel data test is performed with the follow- Constanta 6,511627 0.000 ing steps: Chow test LDR 0,017371 0.032 Chow test is a test to determine whether the BOPO 0,0468385 0.000 Common Effect (CE) or Fixed Effect (FE) model is the NPL -0,3189103 0.000 most appropriate to be used in estimating panel data. NIM -0,0135882 0.749 If Result: H0: Select Pooled Least Square / Common F-Test 15,51 Effect Model (CE) H1: Select the Fixed Effect Model (FE). From the results of the CHOW Test on STATA Signifikansi F 0.000 12 the following results were obtained: Adj R-squared 0.3792 Table 4.2 CHOW Test Results T Test >> See P> (t) >> If
assumption test in this study uses 4 tests, namely: between the error of the intruder in t-tide with the Multicollinearity Test, heteroscedasticity test, auto- error of the intruder in the period t-1 (previous) correlation test, and normality test. The classic as- (Ghozali, 2006: 95). If there is a correlation, then sumption test is performed with the help of STATA there is a problem called the autocorrelation prob- 12 software. After conducting a panel data regres- lem. One way to detect the presence of autocorrela- sion test using the Common Effect, it is then per- tion is the utocorrelation test or Wooldridge test for formed with the Classic Assumption Test with the autocorrelation according to table 4.7 as follows: following results: Table 4.7 Multicollinearity Test Autocorrelation test / Wooldridge test for autocor- Multicollinearity test aims to test that the regression relation model found a correlation between independent Remarks Value variables (independent). A good regression model F (1, 3) 78,060 should not occur correlation between independent Prob> F 0.0031 variables. To detect the presence or absence of mul- ticollinearity, it can be seen the tolerance value and Prob> F = 0.0031, the result is less than Alpha, the opposite variance inlation factor (VIF). Multicol- so the HO refutation occurs when autocorrelation linearity occurs when the tolerance value <0.10 and means there is a violation, but this test is not used VIF value> 10. The following are the results of mul- because the research data uses panel data, while the ticollinearity test. autocorrelation test is used when the data is time se- Variabel VIF Conclusion ries data. BOPO 4,97 Free Multikolinearitas Normality test NPL 2,96 Free Multikolinearitas Normality Test aims to test a regression model, LDR 2,91 Free Multikolinearitas dependent variable, independent variable, or both NIM 1,60 Free Multikolinearitas have normal distribution or not. A good regression Mean VIF 3,11 Free Multikolinearitas model is if all data are normally distributed or close to normal. Shapiro Wilk's normality test results can From Table 4.5 above there is no VIF value be seen from Table 4.8 shows the following: greater than 10, it can be said that the model meets Table 4.8 the assumptions of non-multicollinearity, meaning Shapiro Wilk Normality Test that no violations occur Z 2,029 Heteroscedasticity Test Prob> F 0.02125 Heteroscedasticity test aims to test whether in the regression model there is a variable inequality From Table 4.8 it appears Prob> z = 0.02125 from the residuals of one observation to another. If where below 0.05 means Failure to reject H0 is not the variable is fixed, then it is called homokedasticity normally distributed means a violation has oc- and if it is different is called heteroscedasticity. A curred. Because the normality test is basically not a good regression model is homokedasticity. This BLUE (Best Linear Unbias Estimator) requirement study uses the Breusch-Pagan / Cook-Weisberg test and some opinions do not require this condition as for heteroskedasticity. Heterokedasticity Test Re- something that must be fulfilled, this normality test sults using Breusch-Pagan / Cook-Weisberg test for is not used. heteroskedasticity according to table 4.6: Determination Coefficient Test and F Test Table.4.6 The coefficient of determination test is per- Heterokedasticity Test formed to determine the effect of the entire inde- Remarks Value Conclusion pendent variable used on the Base Lending Rate. Chi2 (1) 3.76 Free of Heterokedastisitas The coefficient of determination test is measured Prob> chi2 0.0526 based on the Adjusted R Square value generated from the analysis of multiple linear regression mod- Prob> Chi2 = 0.0526 where above alpha means els. The results of the determination coefficient test that there is a failure to reject H0 or there is no het- are presented in table 4.9 below. erokesdatisitas but homokesdatisitas, it means there Table 4.9 is no violation. Determination Coefficient Test Autocorrelation Test Autocorrelation test is used to test whether in the linear regression model has a correlation 104
Adjusted NPL and NIM that are reported by BUMN Bank Model R R Square Prob>F a R Square banks every quarter will affect the corporate Base Lending Rate at the BUMN bank 4 91 0,4053 0,3792 0 0,05 Hypothesis 2 (Two) states that the Loan to De- Attachment source 4 posit Ratio has a positive effect on the Base Lending Based on the results of Table 4.9 obtained Ad- Rate (BLR). The results showed that the LDR varia- justed R Square of 0.3792 (37.92%). This shows that ble had a positive effect on the Base Lending Rate, the independent variables used in this study can af- which proved to be significant on the Base Lending fect the Base Lending Rate of 37.92%, while the re- Rate (BLR). This is indicated by the positive coeffi- maining 62.08% is influenced by other variables cient value of 0.017371, which means that the LDR used in this study. has a positive effect on the Base Lending Rate, and Based on the F Test results obtained that Prob> the value of P> [t] = 0.032 is still below alpha (0.05), F = 0,000 which is less than alpha (0.05). This shows which means that the LDR has proven significant to that together the independent variables used in the the Base Lending Rate. study affect the Base Lending Rate (BLR), meaning Loan To Deposit Ratio (LDR) is the ratio of loans the H1 hypothesis is accepted. disbursed compared to the amount of third party Individual Parameter Test funds. Loan To Deposit Ratio (LDR) is important be- Individual parameter test is a test to see the effect of cause it must be reported by banks every month to each independent variable on the Base Lending Bank Indonesia and must be published. Bank Indo- Rate. As well as how much the level of influence of nesia set the Standard for this LDR ratio is 80% to each of these variables. Individual parameter test in 110%, meaning that if banks with a ratio around that this study was used to measure the influence of Loan area are classified as healthy. To Deposit Ratio (LDR), BOPO, Non Performing The large number of unemployed funds will re- Loans (NPL), and Net Interest Margin (NIM) on sult in lower profitability (Adusei, 2015). According Base Lending Rate (BLR) analyzed using the statisti- to Polat and Al-Khalaf (2014) in his research re- cal t test produced in the multiple linear regression vealed that LDR is a measure of liquidity and shows model. The results of multiple linear regression the ability of banks to provide additional loans. The models to see the effect of the independent variable results showed that the greater the Loan To Deposit on the Base Lending Rate as the dependent variable Ratio (LDR) ratio, it would have an impact on the are presented in table 4.10. increase in the Base Lending Rate. This means that Variable. Coef P> [t] Remarks Conclusion the increase in loan delta is greater than the increase LDR 0.017371 0.032 H2 Significantly in third party funds will cause an increase in Loan Accepted positive effect To Deposit Ratio (LDR). Delta increases lending that BOPO 0.0468385 0.000 H3 Significantly is greater than the delta increase in third party funds Received positive that has exceeded the upper limit set by Bank Indo- effect NPL -0,3189103 0,000 H4 Significantly nesia, which is 110%, encouraging banks to make Rejected negative policies to reduce lending by raising lending rates effect and will reduce lending rates if the Loan to Deposit NIM -0,0135882 0.749 H5 No Rejected significant Ratio limit has been touch the lower limit of 80%. negative Therefore, managers make a policy to minimize risk effect to the standard Loan to Deposit Ratio by providing
Discussion understanding to the lending department to always Hypothesis 1 (one) states that the Loan to de- coordinate with the fund collection section, so that it posit ratio, BOPO, NPL and NIM simultaneously in- is always committed to maintaining the ratio of fluence the Base Lending Rate. The results showed loans channeled to third party funds so that lending that together with the independent variables namely rates can be controlled well. Loan to deposit ratio, BOPO, NPL and NIM used in The results of this study are not in line with the the study affect the Base Lending Rate (BLR). This is research of Ni Luh Ita Nofita, A.A. Ketut Ayun- indicated from the value of Prob> F = 0,000 lending should be reduced by increasing the BLR. position below 90%, so that they are always This complements the opinion of H Mbao et al. committed to maintaining the BOPO ratio so as not (2014) which states that an increase in deposit rates to impact the increase in the corporate Base Lending has an impact on increasing lending rates and Su- Rate. dono (2011) which states that deposit rates have a The results of this study are not in line with the positive effect on the Base Lending Rate. High inter- research of Brando Pratenta Ginting Syarief Fauzie est on deposits triggers a large amount of deposits (2013), concluding that the BOPO variable partially so that the bank is very possible to extend credit, due has a negative but not significant effect on retail to opportunities for lending, the delta of lending has prime lending rates. This is due to the increase in the increased sharply. The increase in credit delta dis- delta of operational costs which is greater than the bursement that is too large compared to the third delta of the increase in operating income, which party fund collection delta that exceeds the 110% encourages state-owned banks to raise the base limit is what causes banks to determine policies to lending rate to cover operational costs. The results of raise credit interest rates, so that credit distribution this study differ from Brando Pratenta Ginting decreases. Syarief Fauzie (2013), due to the dependent variable Hypothesis 3 states that BOPO has a positive used is the Corporate Loan Base Interest Rate, the effect on the Base Lending Rate. The results showed higher operational costs encourage bank that BOPO was proven to have a positive effect on management to cover operational costs by raising Base Lending Rate. This is indicated by the corporate lending rates. coefficient value of 0.0468385 which means that Hypothesis 4 states that the Non Performing BOPO has a positive effect on the Base Lending Rate, Loan (NPL) has a positive effect on the Base Lending and the value of P> [t] = 0,000 is still below alpha Rate. The results showed that the Non Performing (0.05), meaning that the BOPO is proven to be Loan (NPL) had a negative effect on the Base significant towards the Base Lending Rate. Lending Rate. This is indicated by the coefficient BOPO is the ratio of operating costs compared value of -0.3189103, which means that the Non to operating income. BOPO ratios are important Performing Loan (NPL) has a negative effect on the because they must be reported by banks every Base Lending Rate, and the value of P> [t] = 0,000 is month to Bank Indonesia and must be published. still below alpha (0.05), meaning that the Non Bank Indonesia sets the Standard for BOPO ratios Performing Loan (NPL) is proven significant against not to exceed 90%, meaning that if a bank has a the Base Lending Rate. BOPO ratio above 90%, the bank is inefficient. Non Performing Loan (NPL) is the ratio of total In terms of obtaining income, the bank will have arrears in arrears, doubtful, and loss compared to income if the pricing credit is greater than the cost of the total loans disbursed. The Non Performing Loan funds. The desired profit of the bank in making (NPL) ratio is important because it must be reported transactions is the maximum profit. Determination by banks every month to Bank Indonesia and must of profit is determined by the amount of credit be published. Bank Indonesia sets the NPL standard interest rates (Kasmir, 2008). According to Kiryanto set by BI at a maximum of 5%, meaning that if a in (Sun'an and Kaluge, 2007), setting loan interest banking NPL with a ratio above 5% is classified as rates is a dilemma for banks. Even though in reality, unhealthy. credit interest rates that tend to be still high will Non-performing loans are non-performing cause credit disruptions. loans that describe the situation of loan repayment The results showed the greater the ratio of agreements that run the risk of default on loans, and BOPO will have an impact on the increase in Base even tend to lead to or suffer potential losses. The Lending Rate. This means that the increase in potential loss referred to can be in the form of write- operational cost delta is greater than the increase in offs, causing the burden of credit write-offs by banks operating income delta will cause an increase in and this will reduce the bank's net profit BOPO. Delta increases operating costs that are (Permatasari and Retno, 2014). The number of NPLs greater than the delta increase in operating income in banks in a country can also cause economic that has exceeded the limit set by Bank Indonesia, stagnation (Zablon, 2015). According to Roman and which is 90%, encouraging banks to make policies to Şargu (2013), the ratio of problem loans to total loan cover operational costs by raising credit interest ratio is used to measure the quality of loans and the rates. Therefore, managers make a policy to quality of bank assets indicated by NPLs. minimize the risk of increasing BOPO by providing The results of this study indicate an increase in understanding to management to control BOPO at a the Non Performing Loan (NPL) ratio will have an 106 impact on the decrease in the Base Lending Rate. impact on increasing the Base Lending Rate. This This means that the delta increase in lending is means that the increase in net interest income delta greater than the delta increase in the total loan is smaller than the increase in earning assets will disbursed will cause an increase in Non-Performing cause a decrease in Net Interest Margin (NIM). Loans (NPL). Delta increase in lending is greater Delta's increase in lending is smaller than the delta than the delta increase in total loans disbursed that of the increase in earning assets at the minimum has exceeded the upper limit set by Bank Indonesia limit set by Bank Indonesia, which is 5%, which is 5%, encouraging banks to make policies to encouraging banks to adopt a policy of raising reduce lending rates. Therefore, managers make a lending rates. Therefore, bank management made a policy to minimize risks to the Non Performing Loan policy to maximize CASA (Current Account Saving (NPL) standard by providing understanding to the Account) funds because of their low costs. lending division to always be careful with always The results of this study complement Satary B. cross checking, implementing a comprehensive Haryanto's research, Endang Tri Widyarti 2017, credit supervision system through continuous which states that Net Interest Margin (NIM) has a guidance, so that they are always committed to significant effect and positive impact on lending. maintaining Non Performing Loan (NPL) ratio is According to research conducted by Iwanicz and below 5%. Witkowski (2015) shows that Net Interest Margin The results of this study are in line with the (NIM) has a positive effect on lending. Another results of research by Aloisius Irtantyo Prabowo study conducted by Prayudi (2011) states that Net Harjum Muharam (2009) which states that the Non Interest Margin (NIM) has a positive influence on Performing Loan (NPL) variable does not have a lending. Thus it is estimated that Net Interest significant effect on lending rates. And not in line Margin (NIM) has a positive influence on lending. with Arisandi's research (2007) which states that Other research conducted by Igan and Pinheiro NPL has a positive effect on lending rates. This is (2011) states that Net Interest Margin (NIM) has a due to the economic conditions between 2013 and positive effect on lending. The above results suggest 2018, where the increase in Non-Performing Loans that if the NIM has a positive effect on lending, then (NPLs) is actually not followed by an increase in the NIM has a negative effect on lending rates but is credit interest rates because corporate credit debtors not significant. This is due to the increased NIM will be more difficult to pay high credit interest. which has an impact on the lower loan interest rates, Hypothesis 5 states that Net Interest Margin which allows banks to be able to extend more loans. (NIM) has a negative effect on the Base Lending 5. CONCLUSION, IMPLICATION, SUGGES- Rate. The results showed that the Net Interest TION, AND LIMITATIONS Margin (NIM) had a negative effect on the Base Based on the results of the research discussion Lending Rate. This is indicated by the coefficient previously described, the following conclusions can value of -0.0135882 which means the Net Interest be concluded: Margin (NIM) has a negative effect on the Base 1) Test and analysis results show that together Lending Rate, and the value of P> [t] = 0.749 ie above the independent variables used in the study are alpha (0.05) means that the Net Interest Margin Loan to Deposit Ratio, BOPO, Non Performing (NIM) is not significant against the Base Lending Loans, and Net Interest Margin significantly influ- Rate. ence Base Lending Rate (BLR). Net Interest Margin (NIM) is a ratio used to 2) Test and analysis results show that the Loan measure the level of profitability, which is the level to Deposit Ratio has a positive effect on the Base of effectiveness of banks between net interest Lending Rate (BLR) and is proven significant. This income compared to the average earning assets. The finding is not in line with research by Ni Luh Ita Net Interest Margin (NIM) ratio is important Nofita, A.A. Ketut Ayuningsasi, I Wayan Yogi because it must be reported by banks every month Swara (2017) stated that the Loan to deposit ratio to Bank Indonesia and must be published. Bank partially had no effect on the credit extended. This Indonesia sets the Net Interest Margin (NIM) complements the opinion of H Mbao et al. (2014) standard set by BI above 5% to be classified as which states that an increase in deposit rates has an healthy. The theory of money supply presented by impact on increasing lending rates and Sudono Keyness shows that there are other factors outside (2011) which states that deposit rates have a positive the interest rate factor that affect lending effect on the Base Lending Rate. High interest on de- The results of this study indicate a decrease in posits triggers a large amount of deposits so that the the Net Interest Margin (NIM) ratio will have an bank is very possible to extend credit, due to 107 opportunities for lending, the delta of lending has In this study there are several limitations of the increased sharply. The increase in credit delta dis- study, including the following: bursement that is too large compared to the third 1. The research period used in this study is rela- party fund collection delta that exceeds the 110% tively short, namely from 2013 to 2018. limit is what causes banks to determine policies to 2. This research is only focused on the internal raise credit interest rates, so that credit distribution performance variables of banking companies in the decreases. form of financial ratios of Loan To Deposit Ratio, 3) Test results and analysis show that BOPO is BOPO, Non Performing Loans, Net Interest Margin proven to have a significant positive effect on Base and Base Lending Rate without regard to the macro Lending Rate. This finding is not in line with re- banking factors of BUMN banks or other economic search by Brando Pratenta Ginting Syarief Fauzie risk factors outside the performance of state-owned (2013) concludes that the BOPO variable partially banks. has a negative effect but is not significant on the base 3.Net Interest Margin is not able to predict the lending rate (SBDK) ) retail. This is due to the in- Base Lending Rate. crease in the delta of operational costs which is Suggestion greater than the increase in the delta of operating in- Some suggestions to consider due to limitations come to encourage state-owned banks to raise the in this study are: base lending rate to cover high operational costs. 1.For further research to use longer time sample 4) Test and analysis results show that Non-Per- data not only 6 years. forming Loans (NPL) have a negative effect on the 2.For further research, the independent varia- Base Lending Rate. This finding is not in line with bles used in the form of financial ratios related to in- research by Aloisius Irtantyo Prabowo Harjum Mu- ternal performance plus the external financial ratios haram (2009) which states that the Non Performing of banking companies such as inflation, the develop- Loan (NPL) variable does not have a significant ef- ment of other macro factors. fect on lending rates. And not in line with Arisandi's 3.Net Interest Margin (NIM), which is used as a (2007) research, that NPL has a positive effect on ratio measure, is unable to predict the Base Lending lending rates. This is because banks will not be care- Rate (BLR), so another measure can be used to pre- less, if the NPL of corporate credit increases then dict the lending rate. This is because banks will be raises the base rate of the corporate credit, but rather more careful when the NIM goes down to raise lend- so that the credit can return well by lowering the ing rates, while raising lending rates is stalling. The base rate of credit. recommended Net Interest Margin (NIM) for pre- 5) Test and analysis results show that Net Inter- dicting Base Lending Rate (BLR) includes: Return est Margin (NIM) has no significant negative effect On Asset (ROA) on Base Lending Rate. This finding complements Sa- trio B. Haryanto's research, Endang Tri Widyarti REFERENCES 2017, which states that Net Interest Margin (NIM) Adusei, Michael. 2015. General & Applied Econom- has a significant influence and positive impact on ics Research Article Bank Profitability: Insights lending. According to research conducted by from the Rural Banking Industry in Ghana. Bul- Iwanicz and Witkowski (2015) shows that Net Inter- letin of Indonesia Economic Studies, Vol 3: est Margin (NIM) has a positive effect on lending. 1078270. Another study conducted by Prayudi (2011) states Aloisius Irtantyo Prabowo Harjum Muharam, SE., that Net Interest Margin (NIM) has a positive influ- ME , 2010, Analisis faktor – faktor yang ence on lending. Thus it is estimated that Net Inter- mempengaruhi suku bunga deposito berjangka est Margin (NIM) has a positive influence on lend- dan suku bunga kredit serta dampak suku ing. Other research conducted by Igan and Pinheiro bunga deposito berjangka dan suku bunga (2011) states that Net Interest Margin (NIM) has a kredit terhadap interest spread (2006-2009) positive effect on lending. The above results suggest Anwar, Sanusi. 2013. Metodologi Penelitian Bisnis. that if the NIM has a positive effect on lending, then Cetakan Ketiga. Jakarta: Salemba Empat the NIM has a negative effect on interest rates on Bank Indonesia 2011,Surat Edaran No.13/24/DPNP loans accepted but not significantly. This is due to tanggal 25 Oktober 2011, Penilaian Tingkat the increased NIM which has an impact on the lower Kesehatan Bank Umum, Jakarta loan interest rates, which allows banks to be able to Bank Indonesia. 2001. Penerapan Manajemen Risiko extend more loans. Bagi Bank Umum. Peraturan Bank Indonesia Research Limitations Nomor 5/8/PBI/2003. Tanggal 19 Mei 2003. 108 Jakarta. Teori dan Aplikasi, BPFE Jogjakarta. Bank Indonesia. 2004. Surat Edaran Bank Indonesia Manurung, Mandala, dan Prathama Ra- Nomor 6/23/DPNP Perihal Sistem Penilaian hardja.o2004. Uang, Perbankan, dan Ekonomi Tingkat Kesehatan Bank. www.bi.go.id. 31 Mei. Moneter (Kajian Kontekstual Indonesia). Ja- Bank, Kenya. Journal of Economics and Sustain- karta: Penerbit FE UI. able Development, 6(9) 2222-2855. Mardi, Liya Faradila Fakultas Ekonomi Universitas Brando Pratenta Ginting , Syarief Fauzie. (Studi Em- Negeri Jakarta, 2016, Pengaruh Non Per- piris pada Bank BUMN di Indonesia Periode forming Loan (NPL) dan bunga pinjaman ter- Oktober 2011 – Maret 2013), Analisis Penentuan hadap tingkat profitabilitas bank umum Suku Bunga Dasar Kredit Ritel. swasta nasional. Budisantoso, Totok dan Sigit Triandaru. 2006. Bank Mayasari, 2010, Loan To Deposit Ratio Dalam dan Lembaga Keuangan Lain. Edisi 2. Salemba Meningkatkan Tingkat Suku Bunga Empat : Jakarta Dana Pihak Ketiga 2004-2008 Cory Michelin Ginting, Shalahuddin Haikal, 2017, Mbao, F.Z. et al., 2014. Determinants of Bank Lend- Pengaruh Cost Of Loanable Fund, Overhead ing Rates in Zambia : A Balance Sheet Ap- Cost, Spread, & CKPN terhadap SBDK periode proach**, 2011-2015 Ni Luh Ita Nofita , A.A. Ketut Ayuningsasi, I Wayan Damodar N. Gujarati,Dawn C Porter. Basic Yogi Swara,2017, Pengaruh DPK, NPL, LDR Econometrics, Edisi 5, Buku 2 dan BI rate terhadap jumlah kredit yang Darna, Nana, 2012. Penurunan BI Rate dan Efisiensi disalurkan oleh BPR di Provinsi Bali 2008 Biaya Operasional Bank Umum Untuk triwulan I -2017 triwulan III. Menurunkan Suku Bunga Kredit. Jurnal BLK Peraturan Bank Indonesia Nomor 15/11/PBI/2013 Galuh, Volume No 1 Bulan Pebruari 2013. tentang Prinsip Kehati-hatian dalam Kegiatan Dendawijaya,Lukman.2005. Manajemen Perbankan. Penyertaan Modal (Lembaran Negara Republik Edisi Kedua, Cetakan Pertama. Ghalia Indone- Indonesia Tahun 2013 Nomor 187 sia, Bogor. DPNP/DPbS/DKSP,Tambahan Lembaran Desti Dirnaeni, Lies Handrijaningsih, 2016, Faktor Negara Republik Indonesia Nomor 5466) yang Mempengaruhi Base Lending Rate Pada Permatasari, Ika dan Retno Novitasari.o2014. Bank Milik Pemerintah Daerah Provinsi Di Pu- Pengaruh Implementasi Good Corporate lau Jawa Periode 2009-2014 Governance terhadap Permodalan dan Kinerja Dr Kasmir, 2014, Dasar- Dasar Perbankan . Edisi Re- Perbankan di Indonesia: Manajemen visi, Raja Grafindo Persada, Depok Risiko Sebagai Variabel Intervening. Jurnal Ghozali, Imam. 2011.“Aplikasi Analisis Multivariate Ekonomi Kuantitatif Terapan, (7) 52-59 Dengan Program SPSS”. Semarang: Badan Polat, Ali, and Al-khalaf, Hassan.p2014. What Deter- Penerbit Universitas Diponegoro mines Capital Adequacy in the Banking System Hashifah Nabilah , Wisnu Mawardi, 2016 , Pengaruh of Kingdom of Saudi Arabia? A Panel Data Giro Wajib Minimum, Suku Bunga, Deposito Analysis on Tadawul Banks. Journal of berjangka, dana pihak ketiga dan cost loanable Applied Finance & Banking, 4(5) funds terhadap Base Landing Rate. Riyadi, S., 2006. Banking Assets and Liability Man- Hasibuan, M.S.P., 2006. Dasar-Dasar Perbankan, Ja- agement, Jakarta: Lembaga Penerbit Fakultas karta: PT. Bumi Aksara. Ekonomi Universitas Indonesia. Johar Manikam, Muchamad Syafruddin, 2013, Ana- Roman, A., dan Şargu, A. C.02013. Analysing the fi- lisis pengaruh capital adequacy ratio nancial soundness of the commercial banks (car), net interest margin (nim), Loan To Deposit in Romania: An approach based on the Camels Ratio (LDR), Non Performing Loan (NPL) dan framework. Procedia Economics and Finance, BOPO terhadap profitabilitas bank 6(2). persero di indonesia periode 2005-2012 Satrio B, Haryanto, Endang Tri Widyarti 2017, Ana- Kasmir. 2012. Bank dan Lembaga Kuangan Lainnya. lisis Pengaruh NIM, NPL, BOPO, BI Rate dan Jakarta: PT. Raja Grafindo Persada CAR Terhadap Penyaluran Kredit Bank Umum Komisi Pengawas Persaingan Usaha. “KPPU Masih Go Public Periode Tahun 2012-2016. Akan Terus Mengawasi Sektor Perbankan-Wa- Selamet Riyadi, Rushadi, Indra Siswanti, Puji Had- wancara dengan Syarkawi Rauf”. Juli 2013. 3 iyati,2012, Evaluasi pengaruh BI Rate Januari 2017 (sbir), cost of loanable fund (colf), overhead cost Kuncoro, Mudrajad, 2002, Manajemen Perbankan, (ohc) dan spread (spr) terhadap tingkat suku 109 bunga kredit (sbk) perbankan tahun 2012. Manajemen Dalam Praktek Perbankan. Edisi 3 Siamat, Dahlan (2005) Manajemen Lembaga Keu- BPFE Yogyakarta. angan: Kebijakan Moneter dan Perbankan, Undang – Undang RI Nomor 10 Tahun 1998 tanggal Edisi Kelima. Jakarta: Lembaga Penerbit FE UI. 10 November. Tentang Perbankan. Sudono, 2011. Pengaruh Perubahan Giro Wajib Min- Zablon, Evusa. 2015. Evaluation of the Factors Lead- imum (GWM) Terhadap Volume Kredit dan ing to Loan Default at Equity Suku Bunga Kredit Pada Bank Umum Periode Zulfiqar Ali1, Zahid Bashir, Muhammad Usman Ar- TW.I/2000-TW.III/2011. Universitas Indonesia. shad, Ahmed Ghazali, Muhammad Asif, Sugiyono, 2013, Metodelogi Penelitian Kuantitatif, Fahad Najeeb Khan, 2016, Analysis Of Some In- Kualitatif Dan R&D. (Bandung: ALFABETA) ner Factors Affecting The Lending Rate And Surat Edaran Bank Indonesia, Sistim Penilaian Ting- Commercial Bank Behavior (An Empirical kat Kesehatan Bank Umum, Tahun 2004. Study Based on the Commercial Banking Sector Teguh Pudjo Mulyono,1999. Aplikasi Akuntansi of Pakistan) 2007-2014. 110 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings Determinant of Sharia Banking Profitability in Indonesia With NPF (Non Performing Financing) as Moderation Fithrony Kurniawan 1STIE Perbanas, Jl. Nginden Semolo No.34-36, Nginden Jangkungan, Kec. Sukolilo, Kota SBY, Jawa Timur 60118 ARTICLE INFO ABSTRACT Article history: Every company, including Islamic banking, was established with the aim of seeking Received profit and increasing profitability. Considering the importance of profitability, Revised knowledge of deteminants profitability is needed so that Islamic banking can develop Accepted strategies in a systematic and planned manner to achieve it. This study aims to examine the factors that affect profitability as proxied by Return on Assets (ROA) of JEL Classification: Sharia Banks in Indonesia. The independent variable consists of Operating Efficency (BOPO), Financing Deposit Ratio (FDR), Capital Adequacy (KPMM), Inflation and Non Performing Financing (NPF) as moderation variables. Secondary data sources Key words: were taken from the Financial Services Authority (OJK). The sampling technique uses Return On Asset (ROA), Operating purposive sampling in 6 (six) Sharia Banking in Indonesia on a quarterly basis from Efficiency (BOPO), Financing Deposit 2015 to 2018. The data analysis technique uses panel data. Based on the results of Ratio (FDR), Capital Adequacy research and discussion, it was concluded that BOPO had a significant negative effect (KPMM), Inflation, Non Performing on ROA of Sharia Banking. Whereas FDR has significant positive effect while KPMM Financing (NPF), panel data, Sharia has insignificant positive effect and Inflation has insignificant negative effect on ROA Banking of Sharia Banking. While NPF moderates the positive influence of BOPO on ROA, it does not moderate the influence of FDR and KPMM on ROA of Sharia Banking. DOI: 10.6084/m9.figshare.9848015 ABSTRAK Setiap perusahaan termasuk perbankan syariah didirikan bertujuan mencari keuntungan dan meningkatkan profitabilitas. Mengingat pentingnya profitabilitas maka diperlukan pengetahuan faktor apa saja yang mempengaruhi profitabilitas sehingga perbankan syariah dapat menyusun strategi secara sistematis dan terencana untuk dapat mencapainya. Penelitian ini bertujuan menguji faktor yang mempengaruhi profitabilitas yang diproksikan dengan Return On Asset (ROA) Bank Umum Syariah di Indonesia. Variabel independen terdiri dari Biaya Operasional Pendapatan Operasional (BOPO), Financing Deposit Ratio (FDR), Kewajiban Pemenuhan Modal Minimum (KPMM), Inflasi serta Non Performing Financing (NPF) sebagai variabel moderasi. Sumber data sekunder diambil dari situs Otoritas Jasa Keuangan (OJK). Teknik pengambilan sampel menggunakan purposive sampling di 6 (enam) Bank Umum Syariah Devisa di Indonesia per triwulanan mulai tahun 2015 hingga 2018. Teknik analisis data menggunakan data panel. Berdasarkan hasil penelitian dan pembahasan, diperoleh kesimpulan bahwa BOPO berpengaruh negatif signifikan terhadap ROA Bank Umum Syariah. Sedangkan FDR berpengaruh positif signifikan sementara KPMM berpengaruh positif tidak signifikan serta Inflasi berpengaruh negatif tidak signifikan terhadap ROA Bank Umum Syariah. Sementara NPF memoderasi positif signifikan pengaruh BOPO terhadap ROA, namun tidak memoderasi pengaruh FDR dan KPMM terhadap ROA Bank Umum Syariah. Kata kunci : Return On Asset (ROA), Biaya Operasional Pendapatan Operasional (BOPO), Financing Deposit Ratio (FDR), Kewajiban Pemenuhan Modal Minimum (KPMM), Inflasi, Non Performing Financing (NPF), data panel, Bank Umum Syariah 1. INTRODUCTION The monetary crisis that occurred in 1998, had a number of conventional banks liquidated because customers as a result of the high interest policy set they were unable to carry out their obligations to * Corresponding author, email address: 1 [email protected] by the government during the crisis, but not so for If seen in more detail, it can be seen that during Islamic banks. As a banking system that does not the period of 2015 to 2018 there were still many adopt an interest system, Islamic banks do not expe- Sharia commercial banks that experienced a rience negative movements. Islamic banks have no negative trend. As a result there are still problems obligation to pay interest on deposits to their that affect the results of these trends, so it is customers. Islamic banks only pay profit sharing to necessary to research what factors are causing the their customers in accordance with the profits decline in ROA. obtained by the bank from the results of its This research was conducted to examine ivestments. several factors that are expected to affect the Return After the issuance of Law Number 21 of 2008 on Assets (ROA) of Sharia Banks in Indonesia, concerning sharia banking, the sharia banking especially Sharia Commercial Banks. The industry in Indonesia has a breath of fresh air in independent variables used include the Minimum enter-ing a new era. Where is intended that Islamic Capital Requirement (KPMM), Operational Costs to banks are not only as counterparts of conventional Operating Income (BOPO), Financing to Deposit banking but as banks that are able to meet the real ratio (FDR) and macroeconomic variables, namely needs of the customers concerned. Therefore the inflation with Non Performing Financing (NPF) as a existence of Islamic banks is expected to be able to moderating variable. While profitability is measured contribute to the economic growth of the community by using ROA as a dependent variable that aims to through the distribution of funds measure the level of health performance of assets Given the immense role of the Islamic Bank as owned by Islamic Commercial Banks in obtaining a financial institution that supports economic profits. growth in a country, it is necessary to have good The main problem in the above research is perfor-mance supervision by banking regulators. whether the factors that influence the return on as- One indicator that can measure the level of financial sets (ROA) of Islamic banks in Indonesia with Non- performance of a bank is the profitability ratio. Performing Financing (NPF) as moderation. Based Where the higher the level of profitability of a bank, on the background description, in detail the problem the better the performance of the bank can be described as follows: The purpose of the bank's operations is to make Does BOPO affect the Sharia Commercial Bank a profit, the importance of the bank's profit is needed ROA in Indonesia? Does FDR affect the Sharia to keep the bank alive and growing. The bank's Commercial Bank ROA in Indonesia? Does KPMM ability to earn profits can be measured by the Return affect ROA Sharia Banks in Indonesia?, Does On Assets (ROA) ratio, which is the level of the Inflation Affect ROA Sharia Banks in Indo-nesia?, bank's ability to get pre-tax profits using its assets. Does BOPO, FDR, KPMM, Inflation simulta-neously In order for bank management to succeed in getting affect ROA of Sharia Banks in Indonesia ?, Does NPF the ROA level as expected, bank management needs moderate the influence of BOPO on ROA of Sharia to know and pay attention to the variables that can Banks in Indonesia? Does NPF moderate the affect the level of ROA in each of the strategies and influence of FDR on ROA of Sharia Banks in policies taken. The following is a table that shows Indonesia? And Does NPF moderate the influence of the ROA position of Islamic commercial banks in KPMM on ROA of Sharia Banks in Indonesia? 2015 to 2018 In detail the objectives to be achieved in this The tendency of obtaining a very small positive study are to examine the effect of BOPO on ROA of trend at Islamic Commercial Banks is due to the fact Sharia Banks in Indonesia, Test the effect of FDR on that there are still many customers who do not yet ROA Sharia Banks in Indonesia, Test the influence of fully trust the performance of Islamic Banks in using Capital Adequacy (KPMM) on ROA Sharia Banks in assets for funding / lending activities and the lack of Indonesia, Test the influence of Inflation on ROA technological developments owned by Islamic Sharia Banks in Indonesia, Test the influence commercial banks in Indonesia. This is evidenced by simultaneously BOPO, FDR , KPMM, and Inflation the acquisition of an average negative trend that is on (ROA) of Sharia Banks in Indonesia, Testing the equal to -0.24 percent. Based on data published by influence of NPF as a moderation of BOPO on ROA OJK, there are six Sharia Commercial Banks that of Sharia Banks in Indonesia, Testing the influence experi-enced a decline in 2018, namely Mega Sharia of NPF as FDR moderation on ROA Sharia Banks in Bank -0.46%, Muamalat Bank -0.02%, BRI Sharia Indonesia, Testing the influ-ence of NPF as KPMM Bank -0.05%, Sharia BJB Bank -4.94% , Bank Bukopin moderation on ROA of Sharia Commercial Banks in Syariah -1.52%, Bank Maybank Syariah -6.86% Indonesia he. 112 With the achievement of these objectives, this stable and even increases is very important. The research is expected to benefit researchers, which reason is to fulfill obligations to shareholders, to can increase the knowledge and insight of research- increase the attractiveness of investors in investing ers about the factors that affect ROA of Sharia Banks capital, and increase public confidence to save in Indonesia, while Sharia Commercial Banks are excess funds held in banks. expected to be a reference to find out the factors According to PBI No. 13/1 / PBI / 2011 affecting Return On Asset (ROA). So that it can concerning Rating of Soundness of Commercial develop Islamic banks more profitably and Banks explained that profitability is one of the main healthier. In addition, the bene-fits for researchers elements assessed in determining the soundness of can further provide references and be able to banks and one indicator commonly used in develop this research better and for financial measuring the profitability of companies is the ratio advisors as reference material when giving advice or of Return on Assets (ROA) . ROA shows the ability input to Islamic banks. of bank management to generate profits from the management of assets owned (Kasmir, 2014) 2. THEORETICAL FRAMEWORK AND Wibowo (2013) further explained that the ROA HYPOTHESES level is used to measure bank profitability because According to Safii Antonio (2001) Islamic Bank Bank Indonesia as a banking supervisor and or hereinafter referred to as Islamic bank, is a bank supervisor prioritizes the value of a bank's that operates without relying on interest. This bank profitability measured from assets whose funds is the main business of providing fees and other come from the majority of public savings funds. services in the payment traffic and circulation of Formula of ROA is: money whose operations are adjusted to the IncomebeforeTax principles of Islamic law. ROA = x100% AverageTotalAsset Another thing that most distinguishes Islamic banks and conventional banks is the distribution of 2.2. Operating efficiency (BOPO) profit sharing system. In conventional banks, profits According to Dendawijaya (2005) the ratio of are shared with the interest system. While in Islamic operational costs is used to measure the level of banks, profits are divided based on the profit efficiency and the ability of banks to carry out their sharing system. Islam encourages the practice of operations profit sharing and forbids usury. Both of them BOPO calculations use the following formula provide benefits for fund owners, but have a real BiayaOperasional difference BOPO = x100% Pendapatan Operasional The banking financial performance itself can be measured through several instruments. Some 2.3. Financing Deposit Ratio (FDR) indicators of banking financial performance Kuncoro (2002) revealed that the loan to deposit including Islamic banks can be measured from the ratio (LDR) is a comparison of the amount of credit profitability, efficiency, liquidity, health and capital financing provided with public deposits. In Islamic of the bank itself. The level of bank profitability can banking, the loan to deposit ratio is commonly be seen from the ratio of Return On Assets (ROA) referred to as the Financing to Deposit Ratio, which while the level of efficiency can be measured from is formulated as follows BOPO (Operating Efficiency). The level of Islamic PembiayaanYangDiberikan FDR = x100% banking liquidity can be measured from the FDR DanaPihakKetiga (Financing to Deposit Ratio) ratio, while the level of The liquidity requirements of each bank differ - capital can be seen from the Capital Adequacy depending on the specificity of the bank's business, (KPMM) and Bank Size measurements. the size of the bank and so on. Therefore, to assess Furthermore, the level of banking health can be the adequacy of liquidity of a bank by using one of measured and assessed from the NPF (Non the FDR's, it is necessary to examine whether the Performing Financing) ratio. Explanation of each bank has taken into account various aspects related banking financial performance indicator is to its obligations, such as meeting com- mitment described as follows loans, anticipating the provision of bank guarantees 2.1. Return On Asset (ROA) which in turn will become liabilities for banks and According to Defri (2012) profitability is the so on. The measurement results are then compared ability of a company to generate profits for a certain with the predetermined liquidity targets and limits. period. For banks, maintaining profitability remains Thus it will be known whether the bank experiences 113 liquidity problems or excess liquidity (Kuncoro, 2.6. Non Performing Financing (NPF) 2002). Credit risk in conventional banks is reflected in 2.4. Capital Adequacy (KPMM) the ratio of NPLs (non-performing loans), while KPMM is capital adequacy which shows the financing risks in the banking sector are reflected in ability of banks to maintain sufficient capital and the the ratio of NPF (Non-Performing Fi-nancing). ability of bank management to identify, measure, Problematic financing in Islamic banks, namely a supervise, and control the risks that arise that can loan that has difficulty in repayment due to affect the amount of capital (Almilia, 2005). intentional factors or external factors beyond the KPMM calculation is based on the principle that ability of the debtor. Non Performing Financing is every investment that carries risk must be provided the number of non-performing loans and the with a certain amount of capital to the amount of possibility of non-billability. investment. In line with the standards set by the The greater the value of the NPF, the worse the Bank of International Settlements (BIS), all banks in performance of the Islamic bank is, with the Indonesia are required to provide a minimum existence of problematic fees that are reflected in the capital of 8% of RWA (Kuncoro and Suhardjono, NPF can result in loss of opportunity to obtain 2002). revenue from financing provided that affect (KPMM) formula is as follows: profitability. NPF reflects the risk of financing, the ModalSendi ri higher this ratio, shows the quality of Islamic bank KPMM = x100% ATMR profitability. NPF reflects the risk of financing, the higher this ratio, shows the quality of Islamic bank 2.5. Inflation financing is getting worse. According to Khalwati (2000), inflation is a In the decision letter of the Board of Directors of condition where there is a sharp increase in prices Bank Indonesia No. 31/147 / KEP / DIR dated (absolute) which lasts continuously for a long period November 12, 1998, concerning the quality of of time. In line with the increase in prices, the value Earning Assets divides the level of credit of money fell sharply also in proportion to the collectibility into 5 types, namely: increase in prices. a. Lancar Meanwhile, according to Boediono (1990) b. Dalam Perhatian Khusus inflation is the tendency of prices to rise generally c. Kurang Lancar and continuously. An increase in the price of just one d. Diragukan or two goods is not called inflation, except if the e. Macet. increase extends to (or results in an increase) in large To calculate the Sharia Bank NPF Percentage, part from the prices of other goods. the following formula is used In theory, inflation affects the banking world as PembiayaanBermasalah(KL + D + M ) a financial institution. As an institution whose main NPF = x100% function is mediation, banks are very vulnerable to TotalPembiayaan inflation risks related to the mobility of their funds. 2.7. Relationship Between Variables and Research One theory that explains this linkage is the theory of Hypothesis lending funds (the Loanable Fund Theory). This section discussed the relationship of the In this theory, if the amount of money requested influence of independent variables on the exceeds the amount provided, it can lead to an dependent variable used in this study, including increase in the price of money or interest rates. The inflation, KPMM, BOPO, FDR, to ROA and NPF as interest rate in this case is the interest rate that moderating variables of influence between BOPO, reflects the match between the deposit interest rate FDR and KPMM on ROA (supply side) and loan interest rate (demand side). The biggest advantage of banks is the difference 2.7.1. Effect of BOPO on ROA between savings and offer interest, so banks must be According to Bank Indonesia, operating able to manage and anticipate inflation as far as efficiency is measured by comparing total possible so that the level of mediation is maintained. operational costs with total operational income, or Inflation calculation is based on price changes what is often referred to as BOPO. So that it can be with the following formula arranged a logic that the operational efficiency P1− P0 variable which is proxied by BOPO has a negative Inflasi = x100% P0 effect on banking performance which is proxied by ROA. So that the greater the BOPO, the financial 114 performance of banks is getting smaller or performance, especially related to credit / financing decreasing, and vice versa, if the BOPO gets smaller, allocations that have been given to financing it can be concluded that the financial performance of customers. In the perspective of producers, the a company (banking) is increasing or improving. higher inflation will cause an increase in output The results of research conducted by Muhammad prices in the market. The increase in output prices if Yusuf and Surachman Surjaatmadja (2018) showed not offset by an increase in public income, can the results that BOPO has a negative effect on ROA. reduce product sales in the market. So that H1 : BOPO has a negative effect on ROA producers will have difficulty selling the goods they produce. This condition can ultimately affect the 2.7.2. Effect of FDR on ROA company's financial performance, where some of the According to Bank Indonesia, the ability of bank funds are funds obtained from bank loans. So that liquidity can be seen in the Financing to De-posit the higher inflation can cause the level of ratio (FDR), which is the ratio between credit and profitability of bank to be reduced, because of the Third Party Funds (DPK). This ratio is used to assess existence of a number of bad loans / financing. In the liquidity of a bank by divided the amount of addition, real sector companies are also reluctant to credit provided by bank against third party funds. increase capital to finance their production, which in The more optimal the level of liquidity, the turn will have an impact on the decline in greater the amount of DPK disbursed in the form of profitability of Islamic banks. loans (financing). The greater of the financing, the This is in accordance with the results of research profit obtained by the bank will be increase conducted by Sirajo Aliyu and Rosylin Mohd Yusof (assuming that the bank is able to distribute the (2016) who founded that macroeconomic variables, financing effectively). namely inflation had a significant negative impact Research conducted by Muhammad Yusuf and on the profitability (ROA) of Islamic commercial Surachman Surjaatmadja (2018) showed the results banks. that Financing to Deposit Ratio (FDR) has a H4 : Inflation has a negative effect on ROA significant positive effect H2 :FDR affects ROA 2.7.5 NPF moderate the influence of BOPO over the ROA of the Sharia General Bank 2.7.3 Effect of KPMM on ROA NPF moderates significantly positive effect The Capital Adequacy (KPMM) is also between BOPO variables on ROA. This shows that commonly referred to as the capital adequacy ratio, the increase in NPF will further strengthen the which means the amount of capital needed to cover influence of BOPO on ROA which has a significant the risk of loss arising from the investment of risk- negative effect. This means that increasing the BOPO bearing assets and financing all fixed assets and and increasing the NPF will further strengthen the bank investment. decline in profitability (ROA) of commercial bank. According to Pandu Mahardian, capital can This is according to research conducted by absorb losses experienced so that activities will be Muhammad Yusuf, Surachman Surjaatmadja (2018) efficient, which in turn will increase profits. With the who found the NPF results to negatively increase in profits, the bank's performance has significantly influence the BOPO effect on ROA. improved. Therefore it can be concluded that the H6: NPF moderates the influence of BOPO on ROA greater the KPMM, ROA will also be even greater, in of Islamic Commercial Bank this case the performance of bank will increase or improve. 2.7.6. NPF moderates the effect of FDR on ROA of The results of research conducted by Islamic Bank Muhammad Yusuf, Surachman Surjaatmadja (2018) NPF moderates the effect of the FDR variable on showed the results that the Minimum Capital ROA. This shows that the increase in NPF Requirement has a significant positive effect on significantly influences the influence of FDR on Return on Assets (ROA). ROA which has a significant effect. This means that H3 : KPMM affects ROA with the increase in FDR and rising NPF, it can strengthen or weaken the increase in profitability 2.7.4 Influence of Inflation on ROA (ROA) of Islamic commercial bank. Inflation reflects the increase in prices of goods This is according to research conducted by and services in the economy over a certain period of Rahmad Hidayat, Isfenti Sadalia, Khaira Amalia time. For bank, inflation can affect their financial Fachrudin (2018) who found the NPF results to 115 moderate the influence of FDR on ROA. The population in this study were 14 Islamic H7: NPF moderates the influence of FDR on ROA of banks registered in the OJK as of December 31, 2018. Islamic Commercial Bank In sampling the population was carried out using a purposive sampling method, which is a sampling 2.7.7. NPF moderates the influence of KPMM on technique based on certain criteria determined in Islamic Banks ROA according with the research objectives. The criteria NPF moderates the influence of KPMM for determining the sample used in this study were variables on ROA. This shows that the increase in Sharia Commercial Banks which included foreign NPF significantly influences the influence of KPMM exchange bank as of December 2018 from existing on ROA which has a significant influence. This population members so that a total sample of 6 means that increasing the KPMM and increasing the Islamic Foreign Exchange Sharia Bank was obtained. NPF can strengthen or weaken the increase in The technique that used is descriptive and profitability (ROA) of Islamic commercial banks. statistical using panel data analysis techniques. The This is according to research conducted by stages are as follows: Rahmad Hidayat, Isfenti Sadalia, Khaira Amalia 3.1 Descriptive Analysis Fachrudin (2018) who founded the NPF results to This analysis is carried out to provide an moderate the effect of KPMM on ROA. overview of the financial ratio of KPMM, BOPO, H8: NPF moderates the influence of KPMM on ROA NPF, FDR, ROA and Inflation of Sharia Commercial Banks 3.2. Test the Selection of the Best Method 3.2.1 CHOW Test 2.7.8. Theoretical Framework 3.2.2. HAUSMAN Test 3.2.3. LAGRANGE Test 3.3. Classic assumption test 3.3.1. Multicollinearity Test 3.3.2. Heteroscedasticity Test 3.3.3. Normality test 3.3.4. Autocorrelation Test 3.4. Hypothesis Analysis 3.4.1. Multiple Linear Regression Analysis: Regression analysis was carried out to determine the direction and magnitude of the effects of the independent variables on the dependent variable by using the multiple linear regression formula as follows Y1 = α + β₁X₁(t) + β₂X₂(t) + β₃X₃(t-1) + β₄X₄(t) + ei 3. RESEARCH METHOD Y2 = α + β1X1 + β2X5 + β3X1X5 + ei Based on the problem formulation and research Y3 = α + β2X2 + β5X5 + β6X2X5 + ei objectives, this study is limited to aspects of the Y4 = α + β₃X₃ + β₅X₅ + β6X3X5 + ei effect of the ratio of NPF, Inflation, KPMM, BOPO, Keterangan : FDR to ROA and the effect of NPF as a moderating Y1 =ROA variable BOPO, FDR and KPMM on ROA at Islamic Y2 =ROA as result of NPF moderation on BOPO commercial banks with the research period used Y3 =ROA as result of NPF moderation on FDR from 2015 to 2018. Y4 =ROA as result of NPF moderation on KPMM Based on the theoretical basic and research α = Konstanta hypothesis on the influence analysis, the variables β₁ - β4 = Koefisien Regresi used in this study include independent variables X1(t) = BOPO and dependent variables with groupings as follows: X2(t) = FDR a. Independent Variabel : X3(t-1) = KPMM previous periode 1.BOPO X4(t) = Inflation 2.FDR Ei =Error (Variabel pengganggu) 3.KPMM 3.4.2. F Test (simultan), Determination Test (R2) serta 4.Inflation Parsial Test ( t Test) b. Dependent Variabel : ROA c. Moderating Variabel : NPF 4. DATA ANALYSIS AND DISCUSSION 116 4.1. Analisis Deskriptif the average (mean) of 17.29% with a standard Std deviation of 4.54. This shows that the Capital of Bank Variabel Overall/Between/Within Mean (%) Min(%) Max(%) Deviasi BRIS has increased quite significantly obtained from ROA Overall 0.719375 1.412765 -10.77 4.86 the accumulation of profits generated with a value BOPO Overall 94.48146 13.494 84.92 217.4 above the average of other Sharia Bank. The KPMM FDR Overall 86.89396 7.747575 68.7 99.11 KPMM Overall 17.2874 4.536619 10.16 29.79 standard deviation is smaller than its mean, this Inflasi Overall 4.103125 1.389026 2.88 7.26 shows that the variation of KPMM data is relatively NPF Overall 4.277917 1.847424 0.88 12.52 small. This shows that the KPMM variable data is ROA as a whole has the highest value of 4.86%, quite good. namely Mega Bank Shari'ah occurred in 2016 quarter Inflation as a whole has the highest value of 1 while the lowest value of -10.77%, namely Panin 7.26% in 2015 quarter 2 while the lowest value of Dubai Syariah Bank which occurred in 2017 Quarter 2.88% occurred in 2018 quarter 3. While the mean 4. Average average (mean) of 0.719% with a (mean) of 4.10% with a standard deviation of 1.39. standard deviation of 1.412. ROA standard The standard deviation of inflation is smaller than deviation is greater than the mean value, this shows the mean, this shows that the variation of inflation that the variation of data on ROA in this study there data is relatively small. With these small data are several outliers (data that are too extreme). The variations, it shows that the Inflation variable data is decline in ROA of Bank Panin Dubai Syariah to quite good. reach -10.77% in 2017 quarter 4 was due to high NPF as a whole has the highest value of 12.52%, operating costs as reflected in the BOPO ratio which namely Panin Dubai Syariah Bank which occurred reached 217.4% so that Bank Panin Syariah had in 2017 in the 4th quarter, while the lowest value was experienced losses. 0.88%, namely Panin Dubai Syariah Bank, which BOPO as a whole has the highest value of occurred in 2015 at 1Q. The average ( mean) of 4.28% 217.40%, namely Panin Dubai Syariah Bank which with a standard deviation of 1.85. A high NPF ratio occurred in 2017 fourth quarter while the lowest indicates a deterioration in the quality of productive value was 84.92%, namely Bank Mega Syariah which activity resulting from the large number of occurred in 2016 Quarter 1 2016 The large increase problematic financing managed by Bank Panin in BOPO at Panin Syariah Bank was due to the large Syariah. The NPF standard deviation is smaller than number of non-performing financing reflected in the the mean, this shows that the variation of NPF data NPF ratio of 12.52% in the same period. While the is relatively small. With these small data variations, mean (mean) was 94.48% with a standard deviation it shows that NPF variable data is quite good. of 13.49. Even though the BOPO standard deviation 4.2.. Choice of Approach (Panel Data Test) is smaller than the mean, this shows that the To determine the best test model approach, a variation of BOPO data is relatively small. With panel data test is performed with the following these small data variations, it shows that the BOPO steps: variable data is quite good. 4.2.1 CHOW Test FDR as a whole has the highest value of 99.11%, Testing is done by comparing the Common namely Bank Muamalat occurred in 2016 quarter 2 Effect Model (CEM) with the Fixed Effect Model while the lowest value of 68.70%, namely Bank BRI (FEM). From the results of the CHOW Test Syariah occurred in 2018 Quarter 1 2018. The high F-Test 4.57 value of Bank Muamalat FDR shows the ability to Prob > F 0.0000 channel financing reaches 99.11% of third-party Overall R² 0.902 deposits held so that it can be concluded that almost all deposits can be distributed to all customers who From Table above obtained Prob> F = 0.000, need financing. While the mean (mean) of 86.89% which means the value <α so that the conclusion with a standard deviation of 7.75. The FDR standard Reject H0 so that the best model chosen from the deviation is smaller than the mean, this shows that CHOW Test is to use the Fixed Effect Model (FEM) the variation of FDR data is relatively small. With such small data variations, it shows that the FDR 4.2.2 HAUSMAN Test variable data is quite good. Hausman test is done if the best model of the KPMM as a whole has the highest value of Chow Test is Fixed Effect. The Hausman test was 29.79%, namely Bank BRIS occurred in 2018 quarter carried out to choose the best ice-timation model 3 while the lowest value was 10.16%, namely Bank between the Fixed Effect model or the Random Muamalat which occurred in 2018 quarter 1. While Effect model 117 according to the table below Chi 2 -Test 2.93 Chi2 (6) 9352.13 Prob>Chi 2 0.7103 2 Prob > Chi 0.0000 From the table above obtained Prob> chi2 = 0.7103 which means the value> α so that the From table above the results obtained Prob> conclusions Fail to Reject H0 so that the best mod-el Chi2 = 0.0000 (value <α) so that it can be concluded of the Hausman Test is chosen using the Random Reject H0 which means het-eroskedastisitas Effect Model (REM). (heterogeneous data) 4.3.3 Autocorrelation Test: 4.2.3 BREUSCH PAGAN- LAGRANGE Test One way to detect the presence of autoko- This test is carried out if the best model of the relations is the Wooldridge test for autocorrelation HAUSMAN test results is the Random Effect. according to table as follows BREUSCH-PAGAN LAGRANGE test is performed to choose the best estimation model between Random Effect or Common Effect From table above the results obtained Prob> F = Chibar2-Test 13.71 0.0002 (value <α) so that it can be concluded Reject Prob > Chibar2 0.0001 H0 which means autocorrelation. 4.3.4 Normality Test From Table above obtained Prob> chibar2 = Normality Test aims to test a regression model, 0.0001, which means the value <α so that the dependent variable, independent variable, or both conclusion is Reject H0 and the best model of the have normal distribution or not. A good regression BREUSCH-PAGAN LAGRANGE model is selected model is if all data are normally distributed or close using the Random Effect Model (REM). to normal. Shapiro Wilk's normality test results can be seen in Table shows the following 4.3.. Classic Assumption Test 4.3.1 Multicollinearity Test This test is conducted to see whether there is a relationship between perfect relationships between From the table normality test using the Shapiro- independent variables. The results obtained are as Wilk Test as written above the results obtained Prob follows: value> Z = 0.00000 (value <α) so that it can be concluded Reject H0 which means abnormal (there is a violation of the normality test) 4.4. Panel Data Regression Model through Random Effect Model (REM) Approach The results of the REM approach panel data regression are as follows: Variable Β Nilai P>(t) Konstanta 7.892 0.0000 BOPO -0.099 0.0000 From Table above we get the results of the FDR 0.023 0.0050 occurrence of multicollinearity for all variables, KPMM 0.161 0.1900 namely FDR, BOPO, KPMM and Inflation and NPF Inflasi -0.046 0.1840 due to VIF> 10 NPF 0.045 0.150 4.3.2 Heteroscedasticity Test F-Test 901.58 Heteroscedasticity test aims to test whether in Signifikansi F (Prob > chi2) 0.000 Overall R² 0.9043 the regression model there is a variable inequality from the residuals of one observation to another The determination test (R2) is carried out to observation. If the variable is fixed, then it is called measure how much the ability of the model in homokedasticity and if it is different is called explaining variations on the dependent variable. heteroscedasticity. A good regression model is The greater the coefficient of determination, the homokedasticity. This study uses the Breusch-Pagan greater the variation of the independent variables in / Cook-Weisberg test for heteroscence-dasticity. influencing the dependent variable. Based on the Heterokedasticity Test Results using Breusch-Pagan data table 4.9 above, the results of the calculation of / Cook-Weisberg test for heteroskedasticity the R2 overall test obtained a value of 0.9043. This means that 90.43% level of profitability (ROA) can 118 be explained by the variables BOPO, FDR, KPMM, Inflation and NPF. While the remaining 9.57% ROA can be explained by other variables not included in this regression model. Test the suitability of the model through the F test by looking at its significance. Based on the The equation obtained as follows: results of data processing in table 4.9 above shows Y3^ = 6.51 – 0.045FDR - 1.578 NPF + 0.013FDRxNPF that the significance value (Prob> chi2) of 0.0000. Based on the data table 4.17 above, the test With a significant value of less than 0.05, it can be results obtained the value of P> (z) variable concluded that the regression model can be used to FDRxNPF of 0.319 with a β coefficient of 0.013. With predict ROA or it can be said that BOPO, Fancing a value of Prob> (z) greater than α indicates that the FDR, KPMM, Inflation, NPF together affect the influence of the FDRxNPF variable does not ROA. significantly moderate the effect of the NPF on FDR The equation obtained as follows: which affects ROA of Islamic Commercial Banks. So Y^ = 7.892 – 0.099 BOPO + 0.023 FDR + 0.016 KPMM it can be proven that the H7 test which states the – 0.046 Inflasi + 0.045 NPF NPF moderates the influence of FDR on ROA of Furthermore, testing the hypothesis is done by Sharia Commercial Banks in Indonesia is rejected. doing a partial test (t test) and the results are Based on the data in table 4.10 above, from the according to table 4.10 as follows: results of panel data regression testing using the 1. BOPO significantly negative effect on ROA of Ran-dom Effect Model (REM) it is concluded that Islamic Commercial Banks (H1 accepted) the KPMM conclusion has a significant positive 2. (FDR) significantly positive effect on ROA of effect on ROA. So the testing of the moderating effect Islamic Commercial Banks (H2 accepted) cannot be continued because the main influence 3. KPMM has insignificant positive effect on ROA of between KPMM on ROA is insignificant so that the Sharia Commercial Banks (H3 rejected) NPF as a moderating variable cannot be tested for its 4. Inflation has an insignificant negative effect on moderating effect on the effect of KPMM on ROA. ROA of Islamic Commercial Banks (H4 is rejected) Thus it can be proven that the H8 test which states Then the moderation test gets the following that the NPF moderates the influence of KPMM on results: ROA of Sharia Commercial Banks in Indonesia is Variable β Nilai P>(z) rejected. Konstanta 16.816 0.0000 BOPO -0.174 0.0000 4.5. Discussion NPF -0.526 0.0000 Based on the results of the study in accordance BOPOxNPF 0.006 0.0000 with table 4.10 above, explanation can be given as Wald-Chi2 1165.96 The equation obtained as follows: follows: 2 Y2^ Signifikansi = 16.812 F (Prob– >0.174 chi ) BOPO 0.0000- 0.526NPF + 4.5.1. BOPO has a significant negative effect on ROA 0.006BOPOxNPFOverall R² 0.896 of Islamic Commercial Banks Based on the data in table 4.16 above, from the Based on the results of testing the effect of test results obtained the value of Prob> (z) efficiency variables which are proxied by (BOPO) BOPOxNPF variable of 0,000 with a coefficient of β on profitability (ROA) above, it can be stated that equal to 0.006. With a value of Prob> (z) smaller than BOPO has a significant negative effect on α indicates that the effect of the NPF variable profitability (ROA). This means that the increase in moderates a significant positive effect of BOPO on BOPO causes a decrease in profits of Islamic ROA of Islamic Banks. So it can be proven that the Commercial Banks. H6 test which states the NPF moderates the influence The results of this study support the research of of BOPO on ROA of Sharia Commercial Banks in Muhammad Yusuf and Surachman Surjaatmadja Indonesia failed to reject (accepted). (2018) with the conclusion that BOPO has a Furthermore, testing the effect of NPF significant negative effect on the ROA of Public moderating the effect of FDR on ROA obtained the Banks in 2012 to 2016. An increase in Operational following results Costs of a Bank that is not followed by an increase in operating income will result in a decrease in profit before tax so that also causes it to decrease ROA. The high BOPO ratio is not only influenced by OPEX (Operational Ex-penses), but is also caused by the 119 cost of problem financing (NPF). Thus it can be financing, the Sharia Commercial Banks will also get concluded that the BOPO has a significant negative even greater profits effect on profitability (ROA) of Islamic Commercial Banks 4.5.4 Inflation has an insignificant negative effect on ROA of Islamic Banks 4.5.2 Financing Deposit Ratio (FDR) has a significant Based on the results of testing the influence of positive effect on ROA of Sharia Commercial Banks macroeconomic variables which are proxied by Based on the results of testing the effect of inflation to profitability (ROA) above, it can be liquidity variables proxied by Financing De-posit stated that inflation has a significant negative effect Ratio (FDR) on profitability (ROA) above, it can be on profitability (ROA). This means that the inflation stated that FDR has a significant positive effect on rate does not affect the profitability of Islamic banks. profitability (ROA). This means that the higher the The results of this study support the research of FDR, the higher the profit rate of Islamic commercial Omar Masood and Muhammad Ashraf (2012) who banks. FDR affects the profit of Islamic banks concluded that inflation had a non-significant because FDR describes the level of financing negative effect on ROA of Islamic banks. disbursed. The higher the level of financing, the This is due to the fact that Islamic banks do not apply higher the profit rate of Islamic banks because the loan interest rates but financing margins whose main source of income of Islamic banks comes from amounts remain stable until the financing period financing, assuming the financing is not included in ends. So that the fixed financing margin makes the category of problem financing. Islamic banks also get a steady profit without being The results of this study support the research of affected even though inflation has increased. These Muhammad Yusuf and Surachman Surjaatmadja results indicate that Islamic banks have a strong (2018) with the conclusion that FDR has a significant resistance to inflation. positive effect on ROA of Sharia Commercial Banks for the period of 2012 to 2016. By channeling as much 4.5.5 NPF moderates the influence of BOPO on ROA funding as possible, banks will also get large of Islamic Commercial Banks incomes too, both from profit margins of sales and Based on the results of testing the effect of asset purchases, rent and income derived from profit quality variables proxy by Non-forming Financing sharing, which in turn will increase profits and lead (NPF) which moderates the influence of BOPO on to a positive relationship with profitability. profitability (ROA), it can be stated that NPF Therefore, the success of an Islamic banks in moderates the effect of BOPO on profitability achieving profit requires financing services as its (ROA). This means that the NPF level can strengthen main service, in accordance with the targets and the effect of the level of efficiency on the profitability plans set by the Islamic banks. Thus it can be of Islamic Commercial Banks. The results of this concluded that Financing to Deposit Ratio (FDR) has study are in accordance with the research of a significant positive effect on profitability (ROA). Muhammad Yusuf and Surachman Surjaatmadja 4.5.3 Cpital Adequacy (KPMM) has not a significant (2018) who found the conclusion of the NPF positive effect on ROA of Islamic Banks moderating a significant positive (strengthening) Based on the results of testing the effect of effect of BOPO on ROA of Islamic Commercial capital adequacy variables which are proxied by the Banks. Minimum Capital Requirement (KPMM) on This shows that the existence of problematic funding profitability (ROA) above, it can be stated that can increase operational costs so that the BOPO is KPMM has a positive significant effect on getting bigger. The increase in BOPO due to the profitability (ROA). This means that the amount of influence of the NPF has led to a greater decline in capital does not affect the profitability of Islamic Return on Assets (ROA) of Islamic Banks. In general, banks to a significance level of 5%. the NPF makes a large contribution to the The results of this study support the research of operational cost structure of Islamic Commercial Rahmad Hidayat et al (2018) which concluded that Banks in Indonesia in the form of CKPN (Allowance KPMM had a non-significant positive effect on ROA. for Impairment Losses). This shows that the greater the capital does not bring the greater the profitability of Islamic Commercial 4.5.6 NPF does not moderate the influence of FDR on Banks. This is because not all capital owned by ROA of Islamic Banks Islamic Commercial Banks is used for distribution of Based on the results of testing the effect of asset financing. By channeling increasingly large quality variables which are proxy by NPF which 120 moderates the effect of FDR on profitability (ROA) Commercial Banks will decrease. above, it can be stated that NPF does not moderate 2. Financing Deposit Ratio (FDR) has a significant the effect of FDR on profitability (ROA). This means positive effect on Return on Assets (ROA) of Islamic that the NPF level cannot strengthen the effect of the Commercial Banks in Indonesia. This means that if level of liquidity on the profitability of Sharia FDR increases, the ROA of Islamic Banks also Commercial Banks. The results of this study support increases. the research of Muhammad Yusuf and Surachman 3. Capital Adequacy (KPMM) has not a significant Surjaatmadja (2018) that the NPF results did not positive effect on Return On Assets (ROA) of Sharia moderate the effect of FDR on ROA of Islamic Commercial Banks in Indonesia. This shows that if Commercial Banks. KPMM increases, it does not affect ROA of Islamic This is due to the average NPF of Sharia Commercial Commercial Banks. Banks still below the regulatory requirements 4. Inflation has no significant negative effect on required by the OJK, which is a maximum of 5%, Return on Assets (ROA) of Islamic Commercial thus indicating that the existence of financing does Banks in Indonesia. This means that if inflation rises not greatly increase or reduce the level of the ROA of Islamic Commercial Banks does not distribution of Sharia Commercial Bank financing so experience significant changes (fixed) it also does not affect the profit of the Sharia 5. Operating Efficiency (BOPO), Financing to Commercial Bank itself. Although Panin Dubai Deposit Ratio (FDR), Minimum Capital Syariah Bank in 2017 quarter IV and 2018 quarter 1 Requirement (KPMM), Inflation, together have a decreased the quality of financing with NPF significant effect on Sharia Commercial Banks reaching above 10%, but this did not significantly Return On Assets (ROA) in Indonesia influence the overall results of the moderation of the 6. NPF moderates significantly positive influence of FDR on ROA of Islamic Commercial (strengthens) the influence of BOPO on ROA of Banks due to only a number of 2 (two) data only. Sharia Commercial Banks in Indonesia. This shows that the increase in problematic financing can 4.5.7 NPF does not moderate the effect of KPMM on increase operational costs so that the BOPO is ROA of Islamic Commercial Banks getting bigger. The increase in BOPO due to the Based on the results of testing the influence of influence of the NPF led to a greater decline in asset quality variables which are proxy by NPF Return on Assets (ROA) of Islamic Commercial which moderate the influence of KPMM on Banks. Basically, the NPF provides a large profitability (ROA) above, it can be stated that NPF contribution to the operational cost structure of does not modify the effect of KPMM on profitability Islamic Commercial Banks in Indonesia in the form (ROA). This means that the NPF level cannot of CKPN (Allowance for Impairment Losses) strengthen or weaken the effect of the capital level 7. NPF moderates the insignificant positive effect of on the profitability of Islamic Commercial Banks. FDR on ROA of Islamic Commercial Banks in The results of this study are in accordance with the Indonesia. This shows that although the NPF has research of Muhammad Yusuf and Surach-man increased, it does not affect the FDR on ROA has not Surjaatmadja (2018) with the conclusion that the changed. NPF does not moderate the influence of KPMM on 8. The NPF does not moderate the influence of ROA of Islamic Commercial Banks, KPMM on ROA of Islamic Commercial Banks in This is because the results of the study found that Indonesia. This is because the results of the study KPMM had not a significant positive effect on ROA found that KPMM had a not significant positive of Sharia Commercial Banks. So that the NPF test effect on ROA of Islamic Commercial Banks. So that moderates the influence of KPMM on ROA of Sharia testing the NPF moderate the influence of KPMM on Commercial is that cannot be continued. ROA of Islamic Commercial Banks cannot be 5. CONCLUSION, IMPLICATION, continued SUGGESTION, AND LIMITATIONS The findings and conclusions above were Based on the results of the research discussion obtained by estimating parameters through the REM previously described in Chapter IV, the following (Random Effect Model) approach to panel data re- conclusions can be concluded: classification specifically using the General Least 1. Operating Efficiency (BOPO) has a significant Square estimation method where the es-timination negative effect on Return on Assets (ROA) of Sharia procedure is different from the OLS (Ordinary Least Commercial Banks in Indonesia. This shows that if Square) estimation method. the BOPO continues to increase, the ROA of Sharia In this study there are several limitations, 121 namely the occurrence of a violation of the classic financing as moderating variable in sharia business assumption test on the research results. The above unit of bank sumut (Bank of North Sumatera) in mentioned violations have been carried out several North Sumatera. stages of handling and settlement according to the Masood, O., & Ashraf, M. (2012). Bank-specific available methods but have not found the results as and macroeconomic profitability determinants of expected Islamic banks: The case of different countries. Test results (t) the influence of BOPO on ROA Qualitative Research in Financial Markets, 4(2/3), of Islamic Commercial Banks showed a large 255-268. coefficient approaching the value of 1 (equal to Yusuf, M., & Surjaatmadja, S. (2018). Analysis of 0.099) so that it was almost close to the relationship Financial Performance on Profitability with Non of identity variables that could cause a statistical Performace Financing As Variable Moderation. concept bias. International Journal of Economics and Financial From the research findings above, it can be Issues, 8(4), 126. beneficial for several parties, namely: Zarrouk, H., Ben Jedidia, K., & Moualhi, M. For Sharia Commercial Banks, it can be the basis (2016). Is Islamic bank profitability driven by same and guideline in developing company business, forces as conventional banks?. International Journal especially how to increase profitability in this case of Islamic and Middle Eastern Finance and Return On Assets (ROA) by conducting sound Management, 9(1), 46-66. financing management so that NPF of Sharia Muhammad Syafi’i Antonio, 2001. Bank Commercial Banks can be maintained properly. In Syariah: Dari Teori ke Praktik. Jakarta,: Gema Insani addition, the Sharia Commercial Bank must always Press strive to improve efficiency by reducing BOPO so Kasmir, 2014. Manajemen Perbankan. Jakarta,: that ROA increases. Raja Grafindo Persada Furthermore, the profitability of Islamic Syahyunan, 2004. Manajemen Keuangan I: Commercial Banks can also be increased by Perencanaan, Analisis, dan Pengendalian expanding financing by applying prudential Keuangan. Medan,: USU Press. banking principles. With the increasing FDR, the Eduardus Tandelilin, 2010. Portofolio dan ROA that is formed will also increase. Investasi Teori dan Aplikasi, Yoyakarta,: Kanisius For further researchers, it can be a material for S Munawir, 2002. Analisis Informasi Keuangan, further research, especially if the aim is to predict Yogyakarta: Liberty future conditions. So it must overcome and resolve Harahap dan Sofyan Syafri, 2009. Analisis Kritis the limitations and weaknesses of the research, Atas Laporan Keuangan. Jakarta : Raja Grafindo namely the violation of this classic assumption test Persada so that it can improve with better results. Mudrajad Kuncoro dan Suhardjono, 2002. REFERENCES Manajemen Perbankan: Teori dan Aplikasi. Akhtar, M. F., Ali, K., & Sadaqat, S. (2011). Yogyakarta: BPFE Factors influencing the profitability of Islamic banks Dahlan, Siamat, 1993. Manajemen Bank Umum. of Pakistan. International Research Journal of Jakarta : Intermedia Finance and Economics, 66(66), 1-8. Achmad, T, Kusuno. Analisis Rasio-Rasio Aliyu, S., & Yusof, R. M. (2016). Profitability and Keuangan sebagai Indikator dalam cost efficiency of Islamic banks: A panel analysis of Memprediksi Potensi Kebangkrutan Perbankan some selected countries. International Journal of Indonesia. Media Ekonomi Economics and Financial Issues, 6(4). dan Bisnis, Vol XV, No 1, Juni, Hal 54-75.Albanese, Asma’Rashidah Idris, F. F. A., Asari, H., Taufik, A 2009, Fairer compensation for air travellers, N. A. A., Salim, N. J., Mustaffa, R., & Jusoff, K. media release, 29 January, Minister for (2011). Determinant of Islamic banking institutions’ Infrastructure, Transport, Regional Development profitability in Malaysia. World Appl. Sci. J, 12, 01- and Local Government, viewed 30 January 2009, 07. 122 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings Brand Positioning for Tribute Watch Daniel Krisna Sudjati School of Business and Management, Institut Teknologi Bandung, Indonesia ([email protected]) ARTICLE INFO ABSTRACT Article history: Indonesia has more than 58 million of businesses all around the country, including Received fashion and accessories industry. Fashion and accessories industry is a very compet- Revised itive business. Not just having to compete with other local businesses, but also with Accepted so many international brands, with big or even small companies. For a business to be able competing with each other, the company needs to formulate its brand positioning JEL Classification: strategy. By implementing brand positioning, it can help a business to dominate the market and ensuring that the business gives a clear message to its market. There are Key words: two brand positioning strategy tested in this research, symbolic and functional. The Brand Positioning, Brand Positioning objective of this research is to know the perception of people about a certain brand of Strategy, Fashion and Accessories, Mul- watches and using the knowledge to help build Tribute Watch marketing strategy. tidimensional Scaling, Watches Busi- Data collected through questionnaire was analyzed using Multidimensional Scaling ness (MDS) to map the perception towards Tribute Watch and its competitors’ brand. Furthermore, Factor analysis was conducted to help understand the underlying var- DOI: 10.6084/m9.figshare.9848009 iables in the perceptual mapping. Thus, from the perceptual mapping, it can be used to help Tribute Watch formulating the strategy needed in order to grow the business and give a clear position in the market for the business. ABSTRAK Indonesia memiliki lebih dari 58 juta bisnis yang tersebar di seluruh negeri, termasuk industri fashion dan aksesoris. Industri fashion dan aksesoris memiliki karakteristik yang sangat kompetitif. Tidak hanya harus bersaing dengan bisnis lokal lainnya, tetapi juga dengan begitu banyak merek internasional, baik dengan perusahaan besar ataupun kecil. Agar suatu bisnis dapat bersaing satu sama lain, perusahaan perlu merumuskan strategi positioning untuk mereknya. Menerapkan positioning dapat membantu bisnis untuk mendominasi pasar dan memastikan bahwa bisnis mem- berikan pesan yang jelas kepada pasarnya. Ada dua strategi positioning merek yang diuji dalam penelitian ini, simbolis dan fungsional. Tujuan dari penelitian ini adalah untuk mengetahui persepsi orang tentang merek jam tangan tertentu dan menggunakan pengetahuan untuk membantu membangun strategi pemasaran Trib- ute Watch. Data yang dikumpulkan melalui kuesioner dianalisis menggunakan Mul- tidimensional Scaling (MDS) untuk memetakan persepsi terhadap Tribute Watch dan merek pesaingnya. Selanjutnya, analisis Faktor dilakukan untuk membantu me- mahami variabel yang terdapat di dalam peta persepsi. Dengan demikian, dari hasil MDS, dapat digunakan untuk membantu Tribute Watch merumuskan strategi yang diperlukan untuk menumbuhkan bisnis dan memberikan posisi yang jelas di pasar untuk bisnis. 1. INTRODUCTION country (Walfajri, 2018). Therefore, competition Indonesia is a big country with more than is inevitable. Either it is a small, medium, or big 264 million people live in Indonesia enterprises, competition among businesses is (Rosenberg, 2018). According to Yuana inevitable. In order to stand out in the competi- Sutyowati from Deputi Bidang Pembiayaan Ke- tion, a business needs its brand positioning mentrian Koperasi dan UKM said there were strategy. The objective in this research is to 58.91 millions of micro businesses, 59,620 small study about brand positioning for five watches businesses, and 4,987 big businesses across the brands, Casio, Roodolph Watch, Parlént, * Daniel Krisna Sudjati, email address: [email protected] Timex, and Tribute Watch. The objective was concept should be either symbolic and func- achieved using Multidimensional Scaling tional. This will make a clear message about (MDS) method to create a perceptual mapping. how a brand can do for their customers (Park, Thus, in order to understand the underlying Jaworski, & MacInnis, 1986). Symbolic brand variables, Factor Analysis was conducted. positioning strategy taps the desire for custom- One of the factors that hold Indonesia small ers who want to improve their social status or and medium enterprise (SME) from effectively self-image. Meanwhile in functional brand, competing with other regional businesses is they exploit their “functional” brand concept lack of business plan and know-how issues (Bhat & Reddy, 1998). (Global Business Guide Indonesia, 2016). Mean- One of the key activities in a business, as while, creating a powerful and memorable well in the fashion and accessories industry, is brand to customers can create a business to mo- branding, including how an enterprise make nopolize the market (Thiel & Masters, 2014). the brand position among its competitors. A Therefore, if one business has to compete with business has to be able to distinguish them- the other businesses, the business has to make selves compare to the others. If a business can- sure that they can win the competition by mak- not be different against the other businesses, ing a distinction compared to another brand. then it is hard for the business to maintain its The way to make the business stand out existence in the industry. When a customer is from the competition is to make sure that it po- satisfied with the brand, the customer’s pleas- sitions the brand right and suit to the market. ure will lead to a further purchase and becomes Brand position creates a clear differentiation be- loyal to the brand (Ju, 2012). Once the brand can tween one brand compares to the other (Keller satisfy its customers and deliver its value, they & Lane, 2008). By doing brand positioning, a will get loyalty from its existing customers. business can make a distinct value of its prod- This positioning marketing strategy can ucts perceived by customers when the custom- help business to be more sustainable and grow. ers associate to the brand. Brand positioning Seeing the importance of branding, a business must focus on how different one brand to an- has to pay much attention to what the brand other (Claudiu-Cat̆ alin,̆ 2014). perceived by its customers. It will help the busi- Positioning is a strategy to propose a com- ness to focus on what the customers feel about pany’s offering and image to get a clear differ- them and offer suitable products with fit strate- entiation in the target market’s mind (Kotler & gies to market it. Keller, 2016). For fashion industry with its char- Thus, the purpose of this research is to an- acteristics which are deep and has a dynamic alyze what customers perceive about Tribute competition, resulting to the need for develop- Watch and its competitors’ brand and give rec- ing an innovative structure and processes sup- ommendation of brand positioning strategy for porting market growth, sustaining the business Tribute Watch. The researcher hopes that by ad- competitive advantage, and take advantage of justing to existing competitor’s brand position- new product segment and consumers (Wigley, ing, it will help Tribute Watch, as a new busi- 2010). Therefore, because in the industry has a ness, to determine where the position in the dynamic competition, a business needs to have fashion and accessories industry and develop a distinct differentiation in the mind of its mar- the marketing strategy appropriate according ket when the brand is compared to the other to the positioning. businesses. In order to tap the two types of consumers’ 2. THEORETICAL FRAMEWORK AND needs, Park, Jaworski, and MacInnis suggested HYPOTHESES for every brand to have “brand concept”. Brand Brand Positioning concept is a general summary that identifies a According to American Marketing Associ- brand. In creating the brand concept, Park, Ja- ation, brand is either one or combination of a worski, and MacInnis proposed that a brand name, term, sign, symbol, or design, to identify 124 one or group of sellers and differentiate them MacInnis proposed that a brand concept should from the other competitors. The role of the be either symbolic or functional. This will make brand is to make consumers able to assign re- a clear message about how a brand can do for sponsibility for the product’s performance to their customers (Park, Jaworski, & MacInnis, the producer or distributor (Kotler & Keller, 1986). Symbolic brand positioning strategy taps 2016). Furthermore, brand positioning is a mar- the desire for customers who want to improve keting strategy that is usually applied along their social status or self-image. Meanwhile in with segmenting and targeting. Positioning is a functional brand, they exploit their “func- way to design a distinct company’s offering and tional” brand concept (Bhat & Reddy, 1998). impression in target customer’s mind (Kotler & Harley-Davidson and Honda can illustrate Keller, 2016). In practice, brand positioning these two different concepts of brand position- strategy makes a specific and distinct of a brand ing. To Harley-Davidson motorcycle owners, in a customer’s mind (Keller & Lane, 2008). they will say that Harley-Davidson is not just a In making a brand positioning, it requires 3 mode of transportation, but it is an experience, things that are needed by marketers to define an attitude, a way of life, and a vehicle who ex- and communicate similarities and differences press they are. Meanwhile the owners of Honda between one brand compares to their competi- motorcycle mostly ride their vehicles because of tors. Those 3 requirements are (Kotler & Keller, the functional reasons, transportation, and do 2016): not interpret the brand as having any symbolic 1. Choosing a frame of reference by identify- value (Bhat & Reddy, 1998). ing who brands’ target market and the rele- Park, Jaworski, & MacInnis (1986) recom- vant competition of their business. The com- mended for a brand to either choose one brand petitive frame of reference defines what are the positioning strategy, either functional or sym- brands that a brand competes with and which bolic. Meanwhile, Bhat & Reddy (1998) argue of those competitors that a brand should focus that a brand can have several brand concepts on. and still widely accepted by customers. For ex- 2. From the frame of reference, the business ample, Apple Macintosh. To Macintosh users, needs to identify the optimal points-of-parity the brand shows the functionality advantages and points-of-difference of the brand associa- of its computers and also the image of it, ex- tions. Points-of-difference (POD) are any kind press the image of the users as being individu- of attributes and advantages that consumers alistic, creative, or even self-establishment. strongly associate with a brand, positively Nevertheless, if the brand association does not evaluate, and believe they could not find the fit well, it can result confusion among consum- same benefits with other brands. Meanwhile, ers and as the result, the brand can be perceived points-of-parity are attribute or benefit that as- neither functional nor symbolic and in this way, sociate to a brand that are not necessarily not really useful for the customers. (Bhat & unique but possibly in fact be shared with Reddy, 1998). Positioning strategy can be bro- other brands. ken down into three sub-components that relate 3. Creating the brand mantra that summa- to each other, those are customer targets, com- rize the brand’s essence and positioning. petitor targets, and competitive advantage (Brooksbank, 1994). Brand Positioning Strategy Consumers’ needs can be categorized into 2 3. RESEARCH METHOD groups, functional and symbolic. In order to tap 3.1. Construct Questionnaire the two types of consumers’ needs, Park, Jawor- In this research, 5 objects and 10 attributes ski, and MacInnis suggested for every brand to that was tested in the survey. The objects were have “brand concept”. Brand concept is a gen- Casio, Roodolph Watch, Parlént, Timex, and eral summary that identifies a brand. In creat- Tribute Watch, while the attributes were styl- ing the brand concept, Park, Jaworski, and ish, plain, expressive, subdued, unique, 125 ordinary, usefulness, value for money, watches The sample of this research was people finishing, and benefit of the watches. who lives in Indonesia who at least own one Further operational definition of each at- watch and using them regularly once a week. tributes will be explained as follow: By studying a sample of one population, survey delivers a quantitative or numeric description 1. Stylish = Fashionable, Sophisticating design of trends, attitudes, or opinions. From the sam- 2. Plain = Uncomplicated, Simple design ple that had been gathered by the researcher, it 3. Expressive = Showing how the users feel or was generalized or make claims about the pop- thought through the design ulation. (Creswell, 2003) 4. Subdued = Not expressing the idea of the users 3.3. Data Analysis 5. Unique = Unusual, different compared to In order to map the perception toward cer- other watches brand and design tain brands, researcher performed multidimen- 6. Ordinary = Common, Easy-to-find design sional scaling in this thesis. In order to deter- 7. Usefulness = The watches function and mine how many represented dimensions in the specifications data that is processed through MDS is com- 8. Value for money = Do the users want to buy monly gone through one of three approaches: the same brand again? subjective evaluation, scree plots of the stress 9. Watches finishing = Materials of the measures, or an overall index of fit. Stress val- watches, Smooth and comfort to use ues measures badness-of-fit or the proportion 10. Benefit of the watches = Warranty, After of the variance of the disparities, dissimilarity sales among objects on the perceptual map and the similarity judgments of the respondents, not ac- 3.2. Data Collection counted for by the MDS model (Hair, Black, The number of respondents in this research Babin, & Anderson, 2014). Stress values of less was calculated using Cochran Formula than 10% are considered acceptable. (Cochran, 1963) because the unknown of the Index of fit can be indicating the proportion population: of variance of the disparities accounted for by the MDS procedure. Index of fit, or R-square 푍2 푥 푝 푥 푞 values, is a degree of how good the raw data fit 푛 = 푒2 the MDS model. To qualified as acceptable, R- square values must be 0.60 or better. The higher Where: the R-square values, the better the fit (Hair, Z = Standard normal deviation set at a cer- Black, Babin, & Anderson, 2014). tain percentage of confidence level There are 3 basic steps that a researcher p = The proportion of approximate popula- needs to do in order to perform the multidimen- tion that has attribute in the question (response sional scaling analysis (Hair, Black, Babin, & rate) Anderson, 2014): q = 1-p 1. Collect measures of resemblance or e = Margin of error preference within the entire set of objects to be analyzed. In this first step, one or more Therefore, based on the equation, sample respondents needs to be collected by researcher required in this research was 140 people with to obtain the similarity judgements. 10% response rate and 95% confidence interval. 2. Use multidimensional scaling analysis to approximate the relative spot of each object in 2 1,96 푥 0,1 푥 (1 − 0,1) the multidimensional space. 푛 = 0,052 3. Identify and understand the axes of the = 138,29 ~ 140 푝푒표푝푙푒 dimensional space in terms of perceptual and/or the features of the objects itself. 126 1.00000, or higher than 0.60. Hence, R-square Furthermore, when MDS had been con- values are acceptable. ducted resulting the perceptual mapping, to understand more about the dimension of X- Axis and Y-Axis, the researcher performed Fac- tor Analysis to understand fundamental struc- ture among variables in the analysis. 4. DATA ANALYSIS AND DISCUSSION Multidimensional Scaling Multidimensional Scaling (MDS), or also known as perceptual mapping, is a technique to conclude the perceived relative impression of a Figure 2 Multidimensional Scaling Result set of objects, for example firms, products, One of the objectives in this research is to ideas, or any objects related to. The application identify people’s association toward a certain of this technique is often to identify key dimen- brand that has a close relationship with Tribute sions underlying customer evaluations of prod- Watch. In this research, there are five brands ucts, services, or companies. Multidimensional that were being tested, those are Casio, Timex, scaling is also common to be used to compare Parlént, Roodolph Watch, and Tribute Watch. of physical qualities, perceptions of any politi- From Figure 2, it can be concluded that Tribute cal candidates or a certain of issue, and the as- Watch and Roodolph Watch have a similar sessment cultural differences between groups. association in people’s perception according to Therefore, the intention of using MDS is to con- the MDS model. Meanwhile, Parlént, Timex, vert consumer judgement of general similarity and Casio located on three different quadrant. or preference into distances symbolized in mul- In order to understand the dimension 1 and tidimensional space (Hair, Black, Babin, & dimension 2 in the model, the researcher Anderson, 2014). performed Factor Analysis To determine people’s perception towards five brands that were being tested with ten dif- Factor Analysis ferent attributes, the researcher used Multidi- Factor analysis is an interdependence mensional Scaling to create a perceptual map- method to determine the fundamental structure ping within each object. among variables in the analysis. Factor analysis is used to analyse the correlations’ structure be- tween a large number of variables by determin- ing sets of variables that are highly interrelated, known as factors. In order to perform Factor Analysis, there are seven stages include the fol- Figure 1 Stress Values & R-square lowing (Hair, Anderson, Tatham, & Black, 2014): If the stress values conducted in the MDS 1. Determining the factor analysis objectives analysis is less than 10%, it is considered ac- 2. Designing a factor analysis, including ceptable. In Figure 1, the stress values are variables’ selection and sample size 0.00000 which mean less than 10%. Therefore, 3. Assumptions of factor analysis the stress values are considered acceptable. 4. Deriving the factors and assessing overall To qualified as acceptable, R-square values fit, including what factor model to use and must be 0.60 or better. The higher the R-square the number of factors. values, the better the fit (Hair, Anderson, 5. Interpreting the factors Tatham, & Black, 2014). From Figure 1, R- 6. Validation of factor analysis solutions square values in processing the MDS data is 7. Additional uses of factor analysis results 127 To determine the Dimension 1 and Thus, Factor Analysis can be conducted using Dimension 2 from the perceptual mapping, the this data. researcher conducted Factor Analysis to reduce the variables into two main groups that was shown as following. Figure 3 KMO Measure of Sampling Adequacy and Bartlett's Test of Sphericity Result To be acceptable, Bartlett’s Test of Sphericity must be less than 0.50 which mean Figure 5 Factor Analysis Result there are significant correlations between variables, therefore factor analysis is possible to Factor analysis was performed to divide conduct. Thus, Kaiser-Meyer-Olkin Measure of the variables into two categories that will help sampling adequacy (MSA) values has to be 0.50 define Dimension 1 and Dimension 2 in or greater for not only the overall test but also Multidimensional Scaling analysis. From the every individual variable. If the variables’ value Figure 5, those two underlying categories was is less than 0.50, it should be deleted from the explained in Table 1. analysis one at a time, with the smallest value Table 1 Factor Analysis Grouping being excluded every time (Hair, Black, Babin, & Anderson, 2014). From Figure 3, the result of the Watch Performance Simplicity Factor Analysis’ KMO Measure of Sampling Adequacy score is 0.848, which is higher than Stylish Plain 0.50. Meanwhile, The significance of Bartlett Expressive Subdued Test of Sphericity score from the test is 0.000, below than 0.05. Therefore, all the variables can Unique Ordinary be analyzed using Factor Analysis. Usefulness Value for Money Watches Finishing Benefit of the Watch Based on the two dimensions of factor Figure 4 Anti-image Correlation Result analysis, the researcher divided the dimension into watch performance and simplicity. From Figure 4 in Anti-image Correlation Therefore, to understand deeper the perceptual section, all the factors KMO Measure of mapping in Figure 2, Dimension 1 became Sampling Adequacy score is greater than 0.50. 128 simplicity and Dimension 2 was watch Meanwhile, the POPs might be the watch use- performance as shown in Table 1. fulness with Quartz movement. Tribute Watch can find its own color in the market by clear de- fining the PODs. Thus, the POPs still should be expressed to state the presence of the brand in the competition. Beside pursuing the brand po- sitioning to the middle of watch performance and simplicity, Tribute Watch can try to work at different dimension to find where there is a quadrant that has no competitor in it. When there is no competition, it helps Tribute Watch to state the PODs much clearer and easier. In or- Figure 6 Final Result of Multidimensional Scaling der to find the new dimension, further research about perceptual mapping needs to be con- In Figure 6 can be concluded that Tribute ducted. Watch is the simplest among other four other With the purpose of identifying what peo- brands, meanwhile Parlént is the least simple. ple perceive when they hear certain brands re- In term of watch performance, Casio has the lated to fashion and accessories business, this highest score, meanwhile Roodolph Watch is in study analyzed the open-ended questions using the lowest position compare to the other brand open coding analysis. However, it can be done in the perceptual mapping. using text analysis with word cloud to capture 5. CONCLUSION, IMPLICATION, SUG- the respondent’s reaction to the specific brands. GESTION, AND LIMITATIONS Text analysis will be more objective analysis to There are two ways Tribute Watch can study the responses. boost the brand to face the competition using Since in this research only study about two the brand positioning strategy, points-of-differ- dimensions of brand positioning using Multidi- ence (PODs) and points-of-parity (POPs). PODs mensional Scaling method, thus in the further are all types of attributes and advantages that research can try to explore new dimensions in consumers can associate with a brand, positive order to find a quadrant where there are no ex- evaluation, and believe they cannot find the isting competitors. By understanding more same benefits with other brands. Meanwhile, competitors’ brand positioning, Tribute Watch POPs are attribute or advantages associated to can position its brand better in a fashion and ac- a brand that are not always unique but can ac- cessories industry. tually be shared with other brands. PODs are as REFERENCES much important as POPs in creating a brand po- sitioning of a brand. (Kotler & Keller, 2016). Bhat, S., & Reddy, S. K. (1998). Symbolic and Even though in the perceptual mapping each functional positioning of brands. Journal quadrant has existing competitor, Tribute of Consumer Marketing, 32-43. Watch can try to aim in the middle of the sim- Brooksbank, R. (1994). The Anatomy of plicity and watch performance. In order to do Marketing Positioning Strategy. that, Tribute Watch needs to increase the com- Marketing Intelligence & Planning, 12(4), plexity of its watches design without making it 10-14. too complicated and in the same time improv- Hair, J. F., Black, W. C., Babin, B. J., & Anderson, ing a little bit of its watch performance, either R. E. (2014). Multivariate Data Analysis. one of multiple attributes from the watch per- London: Pearson Education Limited. formance side as shown in Table 3. Based on the Ju, H. W. (2012). Who Are Fashion Brand Fans? points-of-difference and points-of-parity side, An Investigation Of Antecedents And the PODs of Tribute Watch can be its inexpen- Outcomes Of Brand Commitment (Doctoral sive yet stylish, unique, and good quality. Dissertation). Ann Arbor: Faculty And 129 Graduate School Of The University Of populous-countries-today-1433603 Minnesota. Saunders, M., Lewis, P., & Thornhill, A. (2007). Kotler, P., & Keller, K. L. (2016). Marketing Research Methods for Business Students Management Global Edition. Harlow: (Fourth Edition). Edinburgh Gate: Pearson Education. Pearson Education. Park, C. W., Jaworski, B. J., & MacInnis, D. J. Walfajri, M. (2018, October 5). Keuangan: (1986). Strategic Brand Concept-Image Kontan. Retrieved from Kontan: Management. Journal of Marketing, Vol. https://keuangan.kontan.co.id/news/j 50, pp. 135-45. umlah-pelaku-umkm-di-2018- Rosenberg, M. (2018, December 14). Geography: diprediksi-mencapai-5897-juta-orang ThoughtCo. Retrieved from ThoughtCo.: https://www.thoughtco.com/most- 130 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings Analyzing Employee Engagement Improvement in CV. Crisbar Using AON Hewitt and Deloitte Model 1 2 Muhammad Khasan Abdurrohman , Hary Febriansyah, S. Si.,MT., Ph.D. 1 Institut Teknologi Bandung, Jalan Ganesha 10, Bandung, 40132, Jawa Barat, Indonesia 2 Institut Teknologi Bandung, Jalan Ganesha 10, Bandung, 40132, Jawa Barat, Indonesia A R T I C L E I N F O A B S T R A C T Article history: CV. Crisbar is a private company established in August 29th, 2017. This business Received working on the sector of fast-food-service which based in Bandung. The issues occured Revised when the rate of turnover is considered as high and also there is no KPI as an indicator Accepted to assess the employee performance. Based on the issue, this research aims to reveal: (1) current condition & kind of factors that affect the employee engagement, (2) provides JEL Classification: recommendation. The researcher is using employee engagement model from two credi- ble human resource consulting company, AON Hewitt and Deloitte. Those two model is combined into a new model which has a simplification model from both. This re- Key words: search uses two major data collections (1) primary data and (2) secondary data. The Employee Engagement, AON Hewitt researcher use SPSS statistical tests such as reliability, validity, normality, multicol- Model. Deloitte Model, Factor Analy- linearity, heteroscedasticity, autocorrelation, linearity, factor analysis, and MLR. sis, MLR. From the data analysis, the finding for current employee engagement level in CV. Crisbar is in very good and need to be maintained, with average score of 4.37 out of 5. DOI: 10.6084/m9.figshare.9847988 There also two factors (work motivation and welfare) that affect the employee engage- ment, work motivation is considered as the most significant with score of 0.989 out of 1.527. Welfare factor has the score of 0.538 out of 1.527. The partial improvement decided by the lowest score from each of the factor which categorized as “acceptable, need to be improved”. The items are in the areas of enabling infrastructure and also corporate responsibility. A B S T R A K CV. Crisbar adalah perusahaan swasta yang didirikan pada 29 Agustus 2017. Bisnis ini bergerak di sektor layanan makanan cepat saji yang berbasis di Bandung. Masalah terjadi ketika tingkat turnover dianggap tinggi dan juga tidak ada KPI sebagai indikator untuk menilai kinerja karyawan. Berdasarkan masalah tersebut, penelitian ini bertujuan untuk mengungkapkan: (1) kondisi saat ini & jenis faktor yang memengaruhi keterlibatan karyawan, (2) memberikan rekomendasi. Peneliti menggunakan model keterlibatan karyawan dari dua perusahaan konsultan sumber daya manusia yang ternama, AON Hewitt dan Deloitte. Kedua model tersebut digabungkan menjadi model baru yang memiliki model penyederhanaan dari keduanya. Penelitian ini menggunakan dua koleksi data utama (1) data primer dan (2) data sekunder. Peneliti menggunakan uji statistic SPSS seperti uji reliabilitas, validitas, normalitas, multikolineritas, heteroskedastisitas, autokorelasi, linearitas, analisis faktor, dan MLR. Dari analisa data, temuan untuk tingkat keterlibatan karywan saat ini di CV. Crisbar sangat baik dan perlu dipertahankan, dengan skor rata-rata 4,37 dari 5. Ada juga dua faktor (motivasi kerja & kesejahteraan) memengaruhi keterlibatan karyawan, motivasi kerja dianggap yang paling signifikan dengan skor 0,989 dari 1,527. Faktor kesejahteraan memiliki skor 0,538 dari 1,527. Perbaikan parsial diputuskan oleh skor terendah dari masing-masing faktor yang dikategorikan “dapat diterima, perlu ditingkatkan”. Bagian tersebut yaitu di bidang infrastruktur dan juga tanggungjawab perusahaan. 1. INTRODUCTION Human resource concept itself also a transmis- Human capital terminology is very sion of Personnel Management which is per- well known in this century of the industrial ceiving the employee as an asset and liability. era. This has been broadly used as the trans- Thus, the company stated their goals to mini- mision of the previous human management mize as much as possible the cost of employ- concept that is Human Resource Management. ee’s salaries. However, Human Resource shifts * Corresponding author, email address: [email protected] that concept into better ways. “The distinctive versity, UNJANI, UNPAD Dipatiukur, Gerlam characteristic of HRM rests on the assumption UNPAD, Ciseke, Jatinangor Raya, Cibogo Ma- that performance is attained through human ranatha. elements in an organization” (Owoeye and This company vision is “menjadi merek Muathe : 2018, 67). This concept applies in sev- jaringan gerai makanan cepat saji langganan eral elements of human management such as mahasiswa Indonesia”. Now, CV. Crisbar is employee recruitment, selection and training, employing a few full-time employee around 50 career, retirement, performance appraisal, persons to operates a daily business in 10 compensation, and benefit. It also perceived branches. Beside, this company got achieve- the employee as a resource which has to be ment from Grab food as the most wanted maintained carefully cause its limitation. menu in the Grab application. Nowadays, human capital manage- Besides providing fast-food-service, ment has been intensively developed in this CV. Crisbar also has another business unit that information and technology era after Human is “Catering Crisbar”. Filbert as the Chief Fi- Resource Management concept. It embraces in nancial Officer said there is a symptom re- several elements in the human resource pro- vealed. He said that the employee turnover is cess (start from recruiting until compensating) categorized as high because of the employee with different values and also considered as usually stayed in the company for several capital. months of working. Only a few employees Thus, human capital management who stayed along one year in the company. needs to be modelled and measured very well Besides, he stated that there is no Human Re- as stated by Dash “ source department on the company. However, “The research results suggest that the measur- the job is being done by Board of Director ing and modelling of human capital are critical. management. Moreover, the performance ap- The reason for this view can be attributed to the praisal is not yet done and so does the Key growing strategic importance of intellectual Performance Indicator (KPI). Thus the assess- capital management and the need of HR man- agers to establish their credibility” (Dash : ment still based on supervisor judgement 2012, 9) which is likely subjective. MacLeod and Committing into personnel already in- Clarke, 2009 stated that disengaged employees troduced in the terminology of employee en- have been shown to be less productive, absent gagement. Howard and Foster (2009) view in higher numbers, and more likely to leave employee engagement as a critical tool in tal- the company (Stephanie, 2014). Thus, employ- ent management that does not only fortify the ee engagement becomes a critical aspect to be competitiveness of the firm but also, enhance researched further by the management level of the organizational image because it helps to CV. Crisbar. reduce the employee attrition rate in a busi- Based on the background and problem ness firm (Kaliannan and Adjovu : 2015, 163). statement that has been stated above, this re- Employee engagement talks about intangible search aims to know : forms, such as satisfaction, commitment, moti- a. How is the current condition of employee vation, loyalty, and involvement. engagement level in the CV. Crisbar? CV. Crisbar is a private company estab- b. What kind of factors which affect the lished in August 29th, 2017. CV. Crisbar found employee engagement based on the by two student college named Filbert and Ha- assessment in the CV. Crisbar? fizh. This business working on the sector of c. How is the recommendation based on the fast-food-service which based in Bandung. analysis to improve future employee Currently, CV. Crisbar has 10 branches located engagement for better performance? in three areas of Bandung, Cimahi, and Jatinangor. There are Taman Sari Food Festival Siliwangi, Ganesha, Cisitu Indah, Telkom Uni- 132 Based on the background and problem state- helps the organization meet its goals. Mean- ment that has been stated above, this research while, AON Hewitt, a global leader in human aims to : resource solutions, with over 30.000 profes- a. Assess the current condition of employee sionals in 90 countries serving more than engagement level in the CV. Crisbar 20.000 clients worldwide, defined an engaged b. Describe the kind of factors that affect the employee into three observable facets of “say, employee engagement based on the stay, and strive”. And they believe that con- assessment in the CV. Crisbar sidered as “engaged employee” means that c. Provide the recommendation based on the employees must exhibit all three facets. analysis to improve future employee engagement for better performance Figure 1. Observable Facets of Engaged Employee (AON Hewitt, 2015) 2. THEORETICAL FRAMEWORK AND HY- POTHESES Robinson et al (2004) defined engage- ment as one step ahead of commitment which valued as a positive attitude of the employee toward the organization and its values, where employees also have awareness of business context and work to improve job and organiza- tional effectiveness (Bedarkar & Pandita, 2013). Employee engagement can also arguably the Those facet’s definitions were derived most critical metric for organizations in the 21st from thousands of managerial interviews and Century. Most if not all, of the other key focus group discussions we have conducted measures that reflect and drive organizational globally regarding what engaged employee performance (customer satisfaction, innova- think and do (AON Hewitt, 2015). From that tion, profitability, loyalty, and quality) are theory, we can conclude that the Human Re- products of engaged committed employees source Division must consent in engaging em- (Siddhanta & Roy, 2010). Amazingly, engage- ployee at many organizational levels. Because ment can increase during diverse times be- this will highly affect their performance and cause employees are fearful that they will be also their emotion toward employment. In a the ones losing their jobs immediately. In fact, study of the antecedents and consequences of the change depends on how much consulta- employee engagement, Saks (2006) in Dash tion with employees was conducted during the (2012) found any kind of difference in the con- change. In a study with respondents undergo- sequences of job engagement and organiza- ing organization change with six different tional engagement. The engagement on the types of requests for engagement varying from organization positively affected by the ability “change imposed without employee consulta- of each individual to adapt to change. tion” to “formal consultation with employees” Sheffield Barry, an independent execu- they found that employee involvement was tive compensation consulting firm ranked critical to a company’s success when turbulent AON Hewitt at the Top 4 Diversified HR Con- times occurred (Marchington & Kynighou, sulting Firms. It was because of the deep and 3341). board HR consulting practice areas covering According to Kelleher (2014), employee compensation, benefits (both health and wel- engagement is the mutual commitment be- fare benefits, and DB and DC retirement bene- tween an organization and an employee, in fits), and talent management (careers, culture, which the organization helps the employee performance management, etc). At the latest meet his or her potential and the employee version, AON Hewitt includes the additional 133 part of “Engagement Outcomes” and “Busi- select to fit, small and empowered teams, and ness Outcomes” to become a concern. time for slack. Then “hands-on management” AON Hewitt defined engagement has clear transparent goals, coaching, invest in drivers into six aspects, there are company management development, and modern per- practices, the basics, the work, performance, formance management. Afterward, a “positive leadership, and brand. Each of these parts al- work environment” has a flexible work envi- ways widely developed year to year. At com- ronment, a humanistic workplace, the culture pany practices, he defined it into communica- of recognition, and inclusive diverse work en- tion, customer focus, diversity and inclusion, vironment. Furthermore, “growth opportuni- enabling infrastructure, talent, and staffing. At ty” has training and support on the job, facili- the basics, there are benefits, job security, safe- tated talent mobility, self-directed and dynam- ty, work environment, work/life balance. At ic learning, and high-impact learning culture. work, there are collaboration, empowerment, The last one is “trust in leadership”. It has mis- and work tasks. At the brand, there is reputa- sion and purpose, continuous investment in tion, brand/EVP, corporate responsibility. At people, transparency and honesty, and inspira- the leadership, there is senior and BU leader- tion. ship. The last is the performance, there are ca- Moreover, the benefits of maintaining reer opportunities, learning and development, the engagement of employees as high are performance management, people manage- many. Bedarkar & Pandita (2013) said that ment, rewards and recognition. All of that 6 nowadays the organization should actively matters would produce any outcome in the look forward to fulfilling employee’s expecta- area of engagement which usually sorts by 3S tions as it is affected by the performance of an (Say, Stay, and Strive). employee which also affected into the organi- That means the employee will actively zation’s performance. Besides, a case studies participate and stay working as a loyal em- from Hay Groups’ shows the benefits along ployee who really wants to strive for the com- with employee performance, employee reten- pany. Not only from engagement, but also tion, customer satisfaction, and financial suc- produces business outcome such as talent, op- cess (Siddhanta & Roy, 2010). Parent & Love- erational, customer, and financial. At talent, it lace (2015) on their paper stated that the en- will produce retention, absenteeism, and well- gagement affects into a positive organizational ness. In the operational, it will produce more culture on an individual’s ability to adapt the productivity and safety. Then at the customer, organizational change. it will produce satisfaction, NPS, and also re- Deloitte has 20 issues of drivers, how- tention. For the last, at the financial aspect, it ever, Deloitte still enhances a focus on simplic- will produce the revenue/sales growth, Op, ity. Highly engaged companies work very income/margin, and also total shareholder hard to make work simple. By simply dispose return. Surprisingly, based on the “2018 of administrative overhead (compliance pro- Trends in Global Employee Engagement” con- cesses, formal check-off processes, multistep ducted by AON Hewitt, “rewards & recogni- processes) in favor of trust, autonomy, and a tion” become the top engagement opportuni- focus on cooperation. The disposal over bu- ties in global following by “senior leadership” reaucratic burden can have a catastrophic im- and also “career & development“. pact on work satisfaction. Meanwhile, Deloitte has their own too. Quite different from AON Hewitt, They have five elements drive engagement Deloitte doesn’t include compensation as an which varies in 20 variables indeed. There are engagement factor/driver while compensation meaningful work, hands-on management, pos- itself perceived as a “hygiene factor” not an itive work environment, growth opportunity, “engagement factor”. Therefore, while the and trust in leadership. For the specific varia- compensation is not enough, people will leave- bles, “meaningful work” has the autonomy, however increasing the compensation itself 134 does not directly increase engagement (with represent the whole picture of this research certain exceptions). methodology. The first phase started with pre- Figure 2 shows the new model of employ- liminary research and end up with data analy- ee engagement. The researcher combines the sis and the conclusion also recommendation. two models into one new integrated model. The two models can relate to each other be- 3.2 Data Source cause they complete each other, Hewitt pro- The data required for this research divided vides the newest complete set of engagement into two types; primary and secondary data. drivers while Deloitte also includes the issues Sage Research Methods defined primary data which Hewitt doesn’t discuss. Those two vari- as an original data source which called as a ables represent the independent variable (X). first hand-pick of researcher for a specific ob- Additionally, Hewitt includes “Engagement jective. Meanwhile, secondary data is data Outcomes” to become a concern after the “En- published by other parties in order to share the gagement Drivers”. Therefore, those “engage- information of the internal company. Primary ment outcomes” will represent a dependent data here used to be as a confirmation of the variable (Y) in this research. secondary data given by the company. The primary data gained by several methods of Figure 2. New Modified Model of Em- collections such as observation, interview, and ployee Engagement questionnaire. Meanwhile, the secondary data Source: private documentation collected towards the company’s documenta- tion of presentation and websites. 3.3 Data Collection Method a. Observation The Grand Canyon University in Phoenix, Arizona defined observation as an activity of recording and viewing the actions or even behavior of participants. In this research, the researcher conducts an observation in several outlets of CV. Crisbar to observe the employee activity during working time. The first outlet being observed located in Jalan Cisitu Indah, The switching arrow inside the box in- then the other outlet located in Jalan Ganesha. dicates both Hewitt and Deloitte engagement The observation focus on the process of busi- drivers are completing each other as the inde- ness, customer interaction, and equipment pendent variable (X). The arrow outside the provided. box indicates that (X) variable (independent b. Interview variable) is affecting the (Y) variable (depend- According to Gary Dessler, an interview ent variable). This research reveals what part defined as an activity of gaining some infor- of employee engagement driver (X) that signif- mation from other parties in order to know icantly affects the level of employee engage- several aspects. In this research, the researcher ment (Y) in the CV. Crisbar. is conducting an interview with a CV. Crisbar Director of Finance, Filbert. Besides, there will 3. RESEARCH METHOD be other interviews toward employees regard- 3.1 Research Design ing the analysis of the improvement program. This research was done by 4 primary The list of questions and results for interview phases which consists of several sub-activity presented in the second appendices with the indeed. These methods aim to ease the re- title of “wawancara mendalam”. searcher in making a report. Figure 3.1 below 135 Saul McLeod defined questionnaire as (N) total population; (n) sample size; (e) error a tool aimed to help a researcher to collect the tolerance information of a respondent using a series of Researcher take confidence level of questions in a standardized way. Likert Scale 90%, therefore the error tolerance is 0.10. In- is being a scale used in this research consisting creasing the significance level to a higher value of five scales to be selected by respondents. (e.g. 0.10) allows for a larger chance of being Here are the scale options for this research : 1: wrong, but also makes it easier to conclude strongly disagree/sangat tidak setuju (STS); 2: that the coefficient is different from zero (Hair, disagree/tidak setuju (TS); 3: fair/sedang (SD); et al: 2009). Hazelrigg (2009) also add as when 4: agree/ setuju (S); 5: strongly agree/sangat setting confidence intervals, there is nothing setuju (SS) sacrosanct or magical about this number, ei- The questionnaire contains 34 ques- ther Z or alpha. They are entirely conventional tions (9 questions of the dependent variable choices, and one is free to select a different and 25 questions of the independent variable) number. And the appropiate sample size for based on the synthesis model from AON this research is; Hewitt and synthesis model from Deloitte ex- ퟓퟓ plained in the previous chapter. n = �+ퟓퟓ(�.�∗�.�) = 35,46 ~ 37 3.4 Sample Size Figure 3. Organization Structure of CV. Crisbar 4. DATA ANALYSIS AND DISCUSSION CV. Crisbar 4.1 Respondent Profile Figure 4. Gender Distribution Figure 4 Gender Distribution shows that from The total employee of the CV. Crisbar a total of 37 respondents, the proportion of per April 11th, 2019 are 55 employees, divided female employee was 16.2% (6 respondents) into three levels of management within the and the male employee was 83.8% (31 re- organization’s hierarchy. For this research, the spondents). researcher is using the technique of “stratified convenience sampling” questionnare. The em- Figure 5. Age Distribution ployee are choosen because of their convenient accessibility and proximity to the researcher and considering the proportion of each em- ployee level. To determine the sample size re- quired, the researcher is using Slovin’s formu- la. 퐍 n = �+��(퐞�) Figure 5 Age Distribution shows that most of the respondent was in the age of 17-21 years old (15 respondents), followed by 24.3% of 22- 136 26 years old (9 respondents), 18.9% by 27-31 4.2 Reliability Test years old (7 respondents), 8.1% by 32-36 years old (3 respondents), and 8.1% by 37-41 years old (3 respondents). Figure 6. Educational Background Distribution From the table above, the Cronbach Alpha shows the result of 87.5%%, which means the data reliability is good (0.9 > α ≥ 0.8). There is no item of dependent variables being deleted because it would reduce the reliability < 0.875. From Figure 6 Educational Background Distri- bution, the majority of respondents in the CV. Crisbar has a senior high educational back- ground with 64.9% proportion (24 respond- ents). Followed by 21.9% (8 respondents) with a bachelor degree background. And then 8.1% (3) by elementary background. While the mi- nority proportion was 5.4% (2) by junior high. From the table above, the Cronbach Alpha shows the result of 95.3%%, which means the Figure 7. Working Period (in month) data reliability is excellent (α ≥ 0.9). There is no item of dependent variables being deleted be- cause it would reduce the reliability < 0.953. 4.3 Validity Test Based on the table of critical values: Pearson Correlation, with Degrees of Freedoom (DF) = N-2 (37-2 = 35) and significant level 2-tailed Figure 7 Working Period Distribution shows (0.05), the r table for this questionnaire is 0.325. that the majority of respondents have been from the statistical process, it knowing that all working in the CV. Crisbar among 6-10 the items are valid with various level of validi- months (43.2% or 16 respondents). While ty. 2 items are excellent, 17 items have high 29.7% (11 respondents) have been working for validity from 0.603 - 0.790. And 7 items have 1-5 months. Followed by 10.8% (4 respond- medium validity from 0.552 - 0.590. ents) with 11-15 months working period. And least of them was 8.1% (3 respondents) with 4.4 Normality 16-20 months working period. There were only 3 respondents or 8.1% which have been work- ing for more than 20 months. From the One-Sample Kolmogorov-Smirnov Test, the decision was; reject H0 if p-value < 137 0.05. Since the value of Asymp. Sig. (2-tailed) random patterns then the linearity is passed. K-S Z = 0.878 sig. > 0.05, then accept H0. Thus 4.8 Factor Analysis the data is normally distributed. 4.5 Multicollinearity From the Multicollinearity Result, the toler- ance column shows that 23 out of 25 inde- the second test was conducted by deleting the pendent variables have scored less than 0.10, item with an MSA score under 0.5. It is better which indicates there is a correlation among to delete the variables which have MSA score independent variables. And so does with the under 0.5. Then, the KMO result increased into VIF (Variance Inflation Factor), 23 out of inde- 0.815 as shown in the table above. On the sec- pendent variables have the VIF score more ond test, 9 out of 25 items of independent vari- than 10. Therefore, we can conclude that the ables were deleted. Therefore, the independent multicollinearity among independent variables variables decreased to 16 items. does exist. The existence of multicollinearity Total Variance Explained can be resolved by combining highly correlat- ed variables through factor analysis (Stepha- nie, 2017: 33). 4.6 Heteroscedasticity From the table above, it can be seen that every Figure 8. Heteroscedasticity Scatterplot eigenvalue > 1 will initiate a new factor. From 16 independents that is extracted, there are 3 factors initiated. The first factor could explain 56.117% variance. The second could explain a 10.317% variance. And the third factor could explain a 7.509% variance. Therefore the cu- mulative three factors that could be explained Since the plot of standardizing residual and is 73.943% variance. standardize prediction from figure 8 Hetero- By analyzing the varimax rotated component scedasticity Scatterplot generating random matrix, it can be assured which variables that pattern then the heteroscedasticity is passed. converged into which factor by seeing the Thus, the regressi on model is feasible to be highest score of each component. Therefore, conducted. table below shows the new factor of variables as the result of factor analysis. 4.7 Linearity Figure 9. Scatterplot Result of Linearity From Figure 9. Scatterplot Result of Linearity, it can be seen that the plot of standardize re- sidual and standardize prediction generating 138 Table 1. New Identified Factors From the table of F-Test, it can be seen that the model shows that the F ratio of 26.065 is statis- tically significant at a significance level of 0.000 (less than 0.05). Thus, the multiple linear re- gression model can be used to predict the rela- tionship between the dependent variable (em- ployee engagement level) can be explained by 4.9 Multiple Linear Regression all 16 independent variables (a key driver of employee engagement). From the table of determination coefficient above, it can be seen that the model has multi- ple R of 0.839 which reflects employee en- gagement level is considered highly associated with the three new drivers of engagement (ca- reer and social support, welfare, and work mo- From the table of t-test, the intercept or con- tivation). The model has R Square of 0.703 stant value is 11.288, which means the compa- which indicates that 70.3% of the total varia- ny will gain about 11.288 when the independ- tion of annual net sales explained by the re- ent variable(s) is equal to zero. The two out of gression model consisting of career and social three new driver factors (welfare and work support, welfare, and work motivation. motivation) are significant because the scores The adjusted R square is 0.676 which means are less than 0.05. It means that the dependent 67.6% dependent variable (employee engage- variable (employee engagement level) is af- ment level) can be explained by all 16 inde- fected by the two new driver factors (welfare pendent variables (a key driver of employee and work motivation) significantly. Mean- engagement). While 32.4% is explained by while, the t value for the Career and Social causes out of the model context. The standard Support is statistically insignificant which can error of the estimate (SEE) is 2.98220, which is be seen from the significance level of 0.836 very good due to the smaller SEE number (greater than 0.05), thus the expected value of - means more accurate regression model. 0.28 Career and Social Support, given all of the predictor values are equal to zero, means noth- ing and can be dropped from the equation. 139 From the multiple linear regression number (0.989) is “work motivation” factor. If model, the final equation for predicting th em- the “work motivation” factor increases 1000 ployee engagement level can be obtained: points, the employee engagement level will be increased 989 points. Then, the “welfare” fac- Y = 11.288 + 0.538X2 + 0.989X3 tor has a coefficient number of 0.538. It means for every 1000 points increase in “welfare” will With: Y = Employee Engagement Level (de- increase 538 points of employee engagement pendent); X2 = Welfare (independent); X3 = level. Work Motivation (independent) 4.9.1 Work and Motivation 4.9 Result Interpretation Figure 12. Work Motivation On this sub-stage, the previous result that has been analyzed using SPSS software will be interpreted clearly to get a comprehensive conclusion and recommendation. Figure 4.9 Employee Engagement shows current employ- ee engagement in the CV. Crisbar. Figure 10. Employee Engagement Work motivation, as the highest significant factor that affecting employee engagement level is formed by four independent items. First, “empowerment/autonomy_2” item with “saya diberikan wewenang yang cukup untuk menyelesaikan tugas dan tanggungjawab” statement occupies the highest place of work motivation (4.68 out of 5). It means that CV. Crisbar gives proper authority and empower- ment for the employee to finish all their re- sponsibilities. The other items also show a From the obtained data, “say” shows a score good indication. “career opportunities” that 4.28 out of 5. “Stay” shows score of 4.23 out of defines the opportunity given by the company 5. And “strive” shows score of 4.61 out of 5. for an employee to enhance their career (4.59 Based on the multiple linear regression test, out of 5). It was because of the career path in the independent variables (X) are affecting the CV. Crisbar is widely open for all employ- those dependent variables (Y) directly. It ee who has been working for a half year. Then, means a greater score of engagement driver “empowerment/autonomy_1” item with “saya (X) results to a greater score of engagement diberikan kesempatan oleh perusahaan untuk level (Y) and so does the opposite. mengembangkan kemampuan” statement (4.57 out of 5). Fourth, “reputation” item that Figure 11. Unstandardized Coefficient B defines how the company perceived by the public. It can be seen from the Figure 11. Unstandard- ized Coefficient B that the highest coefficient 140 4.9.2 Welfare 4.10.1 Analysis Figure 13. Welfare Based on result interpretation, two factors sig- nificantly affect the employee engagement lev- el in the CV. Crisbar. The most significant fac- tor is work motivation, followed by the wel- fare factor. The overall result gets “acceptable” valuation from the researcher, however, the item in welfare still needs to be improved. Welfare, as the least significant factor Table 2. Improvement Criteria (than work motivation) that affecting employ- (Source: Stephanie, 2014: 45) ee engagement level is formed by five inde- pendent items. First, “diversity and inclusion” item with “perusahaan memperlakukan semua karyawan dengan adil dan bebas SARA (suku, agama, ras, asusila)” statement occupies the highest place of welfare (4.43 out of 5). It The table above shows the categorization of means that CV. Crisbar appreciates diversity valuation decisions based on the scoring result and implementing the free-of-discrimination on the previous interpretation. practice in the work environment. The other items show a good result, “reward and recog- Table 3. Analysis Table nition” item with a score of 4.08 out of 5. CV. Crisbar already implements the system of re- ward for the best employee. “people manage- ment_1” item with “gaji pokok (uang) yang diberikan memuaskan jika dibandingkan dengan perusahaan serupa” statement score 4 out of 5. It was because the salary given by the company has a competitive advantage com- pared to the same industry. The two last items, unfortunately, have a score under 4. First, “corporate responsibility” item with “perus- ahaan memberikan kontribusi langsung ter- hadap masyarakat sekitar melalui program tertentu” statement and score 3.95 out of 5. Second, “enabling infrastructure” item with “perusahaan menyediakan fasilitas yang lengkap dan lingkungan kerja yang men- dukung karyawan” which occupies the lowest place (3.54 out of 5). It means that the company has not provided their employees with proper material (facilities). 4.10 Analysis and Improvement Program In this section, the data analysis and improve- ment program will be explained as the pur- pose of future employee engagement for CV. Crisbar. 141 4.10.2 Improvement Program Engagement Opportunities Globally become the Top 5 within two years. Based on the previous analysis, the researcher Designing a “resilient workplace” is the gives several recommendations for CV. Cris- most likely to have a positive impact on bar regarding the strategy to increase and employee engagement levels (Borghero, maintain the level of employee engagement 2019). The application could be in several high, customer satisfaction, and great perfor- areas such as providing a proper restroom, mance. All the recommendations provided homy basecamp, and the like. here must be analyzed on further research and adjusted with the working culture on the CV. Crisbar. 5. CONCLUSION, IMPLICATION, SUG- a. The small improvement in corporate GESTION, AND LIMITATIONS responsibility This research concludes several things: (a) Corporate responsibility or commonly The current condition of employee engage- known as CSR (Corporate Social ment level in the CV. Crisbar is in very good Responsibility) defined as policies and and needs to maintain, with an average score practices that organization engages of 4.37 out of 5; (b) After done the factor analy- regarding creating positive social, sis test, the two new factors affecting employee including environmental, changes aimed at engagement are formed, there are work moti- different stakeholders (Ferreira & Oliveira, vation and welfare; (c) From the multiple line- 2014). The research used a baseline model ar regression test, the researcher gets the final that shows that there is a positive and equation model in predicting the employee significant (β = 0.837, p < 0.001) engagement level in the CV. Crisbar: relationship between CSR and engagement (Glavas, 2016). A research conducted by Y = 11.288 + 0.538X2 + 0.989X3 AON implied that 80% of respondents with : would prefer working for a company that Y = Employee Engagement Level (dependent) has a good reputation for environmental X2 = Welfare (independent) responsibility. Amri, et.al (2019: p8) stated X3 = Work Motivation (independent) that CSR can be used as a strategic tool to enhance employee engagement, which The work motivation is considered as the benefits to attract, retain, and motivate most significant factor that affecting employee employees. Thus, CV. Crisbar needs to engagement, with a score of 0.989 out of 1.527. concern on how to improve this aspect by Work motivation consists of four independent implementing CSR program such as items, empowerment/autonomy_2, career op- charity action to the orphanage. Besides, to portunities, empowerment/autonomy_1, and increase a reputation in environmental reputation. The average score of four items is responsibility, the company may create a 4.56 out of 5 (very good, need to be main- new branding of green restaurant which tained). used less inorganic elements. The scope of this research is the employee b. The small improvement in enabling of CV. Crisbar, consisting of four level man- infrastructure agement from job hierarchy within the organi- Deloitte’s Global Human Capital Trends zation chosen (staff, supervisor/head office, 2016 report stated how to provide the right manager, and director). Using three tools of tools for the employee to accomplish the collecting data (interview, observation, and tough task and allow them to perform at questionnaire). Respondents of questionnaire their peak. If the tools do not right then the for this research are geographically located in frustration level will get higher and three areas (Bandung, Cimahi, and engagement will plummet (deloitte.com). Jatinangor).The respondents will vary in some Moreover, based on AON’s Top places due to the company already have 10 142 branches across Bandung. Located in Taman ocial_responsibility_on_employee_engagemen Sari Food Festival Siliwangi, Ganesha, Cisitu t_The_case_of_Qatar Indah, Telkom University, UNJANI, UNPAD Arikunto, Suharsimi. (2006). Prosedur Dipatiukur, Gerlam UNPAD, Ciseke, Penelitian Suatu Pendekatan Praktik. Ja- Jatinangor Raya, Cibogo Maranatha. To sup- karta : Rineka Cipta port the analysis, this research will use exter- Autocorrelation: A Problem with Time-Series nal data as secondary data obtained by jour- Regression. Retreived from nals, articles, news, company report, and book. https://www.cengage.com/resource_uploads/do Based on the conclusions, the researcher wnloads/0030348064_54176.pdf gives some recommendations of employee en- Baroon & Armsrong. (2007). Human Capital gagement improvement program for CV. Cris- Management : Achieving addedpople bar in welfare factor. This improvement pro- trough email. gram aimed to help the company maintaining Bersin, J. (2015, January 26). Becoming Irresist- the employee motivation to give their best per- ible : A New Model of Employee Engage- formance and gain an increasing in customer ment. Accessed from satisfaction and also the company vision. Ab- https://www2.deloitte.com/insights/us/en/deloit te-review/issue-16/employee-engagement- solutely this recommendation needs to be re- strategies.html searched further to fit the work culture and Borghero. (2019). The Role of Workplace De- adjust to the environment. sign in Employee Engagement. accessed a. A small improvement in corporate on July 7, 2019, from responsibility https://workplaceinsight.net/employee- CV. Crisbar needs to concern on how to engagement-role-workplace-design/ improve this aspect by implementing CSR Dash. (2012, March). Human Capital Manage- program such as charity action to the ment (HCM : The Evolution of The Field). orphanage. Besides, to increase a Re- reputation in environmental responsibility, trievedfromhttps://www.researchgate.net the company may create a new branding of /publication/258996035_Human_Capital_ green restaurant which used less inorganic Manage- elements. ment_HCM_The_evolution_of_the_field b. A small improvement in enabling Evelyne, Muathe, and Kilika. (2018, September infrastructure 21). Mediating Effect of Motivation on Deloitte’s Global Human Capital Trends Employees Performance in Private Equity 2016 report stated how to provide the right Firms, Kenya. Retrieved from tools for the employee to accomplish the http://www.sciencepublishinggroup.com tough task and allow them to perform at /journal/paperinfo?journalid=176&doi=1 their peak. If the tools don’t right then the 0.11648/j.jhrm.20180602.15 frustration level will get higher and Glavas. (2016). Corporate Social Responsibility engagement will plummet (deloitte.com). and Employee Engagement: Enabling Em- The application could be in several areas ployees to Employ More of Their Whole such as providing a proper restroom, Selves at Work. Retreived from homy basecamp, and the like. https://www.ncbi.nlm.nih.gov/pmc/articles/PM C4886691/ Hewitt. (2015, January). Aon Hewitt’s Model REFERENCES of Employee Engagement (pdf). Available Amri, et.al. (2019).The Impact of Perceived Corporate Social Responsibility on Em- from https://www.aonhewitt.co.nz/getattachment/77 ployee Engagement: The Case of Qatar. 046028-9992-4d77-868a- Retreived from 32fbf622fec6/file.aspx https://www.researchgate.net/publication/3312 29408_The_impact_of_perceived_corporate_s 143 Hewitt. (2018). 2018 Trends in Global Employ- Review. Retrieved from ee Engagement : Global Employee En- http://article.sciencepublishinggroup.com gagement Rebounds to Match Its All-Time /pdf/10.11648.j.jhrm.20180602.14.pdf High (pdf). Available from Pandita & Bedarkar. (2014). A Study on The https://www.aon.com/2018-global-employee- Drivers of Employee Engagement Impact- engagement-trends/index.htmlHrdictionary ing Employee Performance. Journal of (2012, October 28). Evolution of Human Procedia – Social and Behavioral Sciences Resource Management. Retrieved from 133 (2014) 106 – 115. Retrieved from https://hrdictionaryblog.com/2012/10/28/evolut https://core.ac.uk/download/pdf/82130085.pdf ion-of-human-resource-management/ Robinson. (2004). The Drivers of Employee James. Et. Al. (2016, April). The Relationship Engagement. UK : Institute for Employ- Between Engagement at Work and Organ- ment Studies. Retrieved from izational Outcome. Retrieved from https://www.employment- https://news.gallup.com/reports/191489/q12- stud- meta-analysis-report-2016.aspx ies.co.uk/system/files/resources/files/408.pdf Jane. (2015). The Impact of Employee Engage- Sheffield Barry. (2017, September 22). Top 10 ment and a Positive Organizational Cul- Executive Consulting Firms (1+). Accessed ture on an Individual’s Ability to Adapt to fromhttps://www.sheffieldbarry.com/20 Organization Change. Retrieved from 17/09/top-10-executive-compensation- https://scholarworks.merrimack.edu/cgi/viewco consulting-firms-1/ ntent.cgi?article=1009&context=mgt_facpub Shiddhanta & Roy. (2010). Employee Engage- Journyz. Role of CSR in Employee Engage- ment – Engaging the 21 Century Work- ment. Accessed on July 7, 2019, from force. Retrievedfrom https://www.journyz.com/role-csr-employee- http://www.ipublishing.co.in/ajmrvol1no1/sped engagement/ 12011/AJMRSP1015.pdf Kaliannan and Adjovu. (2015, January 27). Ef- Statistics Solution. Assumptions of Multiple fective Employee Engagement and Organ- Linear Regression. Accessed on April 5, izational Success : A Study Case. Retrieved 2019, from from https://www.statisticssolutions.com/assu https://www.sciencedirect.com/science/ mptions-of-multiple-linear-regression/ article/pii/S1877042815003870 Statistic Solutions. Table of Critical Values: Kelleher. (2014). Employee Engagement and Pearson Correlation. Accessed on July 7, Drivers. Canada : John Wiley & Sons, Inc. 2019, from Malhotra & Birks. (2007). Marketing Research : https://www.statisticssolutions.com/table-of- An Applied Orientation. Rotolito Rombal- critical-values-pearson-correlation/ da: Pearson Education Stephanie. 2014. Employee Engagement Im- McLeod, S. A. (2018). Questionnaire. Retrieved provement in PT Maju Sentosa Using from AON Hewitt Model and Mercer Model. https://www.simplypsychology.org/questionnai Bandung : SBM ITB res.html Sugiyono. (2010). Metodologi Penelitian Pen- Osborne & Waters (2002). Four Assumption of didikan Kualitatif Kuantitatif R&D. Ban- Multiple Regression that Researchers dung, Penerbit ALFABETA. Should Always Test. Retrieved from The UK. Assumptions of Multiple Linear Re- https://pareonline.net/getvn.asp?v=8&n=2 gression. Accessed on April 5, 2019, from Owoeye and Muathe. (2018, August 23). Com- http://www.open.ac.uk/socialsciences/spsstutor petence-Enhancing Interventions and Or- ial/files/tutorials/assumptions.pdf ganisational Performance : A Theoretical 144 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings The Impact of Waste Management Process on Work Efficiency of Manufacturing Firms in Eastern Economic Corridor, Thailand Maliwan Sukraksa1, Jiraporn Rahothan2 and Chonlatis Darawong3 Sripatum University at Chonburi, 79 Bangna-Trad Road, Khlong Tamru, Sub-district, Muang, Chonburi 20000, Thailand E-mail: 1 [email protected] 2 [email protected] 3 [email protected] ARTICLE INFO ABSTRACT Article history: The objectives of this research were 1) to study the level of waste man- Received agement process of manufacturing firms in Eastern economic corridor, Revised 2) to study the level of work efficiency of manufacturing firms in East- Accepted ern economic corridor and 3) to compare the impact of waste manage- ment process affecting work efficiency of manufacturing firms due to JEL Classification: industry and firm size. The population of this research included 387 factory managers who are involved in any stage of waste management process in the factory. Questionnaires were developed and used for Key words: data collection. Statistics in data analysis were frequency, percentage, Efficiency, Waste management, average mean, standard deviation, and multiple regression analysis. Eastern Economic Corridor ABSTRAK DOI: 10.6084/m9.figshare.9847949 The results of this study found that 1) waste management process of manufacturing firms appeared to be at high level in 5 dimensions; planning, organizing, leading, coordinating, and controlling, and 2) manufacturing firms has the high level of work efficiency in three dif- ferent dimensions; cost, time, and environment, and 3) the impact of waste management process affecting work efficiency of manufacturing firms is different in terms of firm size and industry. The managerial implication is useful for improving the efficient waste management controller that benefits economic and environmental environment. 1. INTRODUCTION economic growth. It locates a wide range of industry Currently Thai government has a policy to and firm sizes. Heavy industries including automo- boost up national economy by promoting the devel- bile and electronics play a key role in the economy. opment of Eastern part of the country, so called East- Also, the factory consists of small, medium, and ern Economic Corridor (EEC). This area covers three large sizes. As a result of influx of industrial sup- major provinces, including Rayong, Chonburi, and port, there has been a rapid growth of new factories Chachoengsao. EEC is considered as an important and manufacturers. These factories have increas- industrial hub of Thailand since it is located in the ingly released wastes or by product through sewer heart of the continent which links Asian countries in from their manufacturing processes. Without proper one piece. More importantly, the stronghold of su- management with such industrial waste, it could re- perior geographical area can be reached by all trans- sult in both environmental and health problems to portations modes: air, sea, land, and rail. Hence, the society. there are a lot of domestic and foreign investments The Thai government has imposed measures to in this region. control and eliminate the amount of industrial waste EEC has become Thailand’s major industrial generated from manufacturing processes. In the past area that accelerate all aspects of investment and the problem in industrial waste management has af- efficiency of industrial waste management in terms fected environment as a whole. Consequently, it has of cost, time, and environment of industrial factories resulted in the economy of the country due to signif- in the EEC. icant amount of money spent in managing industrial waste and restoring environment caused by illegal Conceptual Framework dumping of industrial waste in public places. With regard to such problem, the government assigned Factory Size the Ministry of Industry and the Department of In- - Small size - Medium size dustrial Works to handle the management of indus- - Large size trial waste with the major cause of production pro- cesses from various factories. To do so, the factories are encouraged to manage industrial waste with cor- Waste management rect and appropriate methods as proposed by the as- process Job efficiency signed government sectors. - Planning - Cost - Organization When the industrial sector is urged to control - Time - Leading - Environment the amount of industrial waste generated from the - Coordinating production process of the factory, there is an idea of - Controlling how to manage such issue in order to maximize waste management efficiency and minimize nega- Industry tive effects to the environment. We therefore real- - Automotive ized the importance of reviewing the principles of - Electronics / Steel organizational management, which is seen as effec- - Processed food tive guidelines for both academics and practitioners. This study focuses on the factors that affect the effi- Figure 1 Research conceptual framework ciency of industrial waste management of factories Scope of this research in the Eastern Economic Corridor (EEC) in Thailand. 1. The data for this research were from of en- Therefore, the researcher adapted the theory of vironmental managers who are responsible for in- Henri Fayol (1841-1925) as well as previous research dustrial plants in the EEC classified as large-, me- studies on the management process to achieve the dium-, and small-sized factories. The manufacturers desired objectives. There are 5 elements that are consist of automotive industry, electronics industry, called POCCC, namely planning, organizing, com- steel industry, and processed food industry. manding, coordinating, and controlling adapted as 2. With regard to the scope of this research, a guideline for conceptual framework and are deter- the researcher studied the factors affecting the job ef- mined as variables used in this research. ficiency of the factories in the EEC. The independent 2. THEORETICAL FRAMEWORK AND variables consist of waste management processes: HYPOTHESES planning, organization, ordering and controlling. Research objectives On the other hand, the dependent variables include 1. To study the level of waste management the job efficiency of the factory employees in the EEC process of manufacturing firms in Eastern economic in terms of investment, time, and environment. corridor 3. RESEARCH METHOD 2. To study the level of work efficiency of Questionnaire development manufacturing firms in Eastern economic corridor Regarding this study, the researcher exten- 3. To compare the impact of waste manage- sively studied the theory and content knowledge ment process affecting work efficiency of manufac- from related texts and research papers in order to be turing firms due to industry and firm size a guideline for this research. The tools used in the Research hypothesis analysis of this research are as follows: 1. Management factors affecting the effi- 1. Process of waste management adapted ciency of industrial waste management vary accord- from the Act of the Department of Industrial Works ing to the size of industrial factories in the EEC. (Factory Act, 1992). 2. Management process factors affecting the 2. Management efficiency adapted from the efficiency of industrial waste management vary ac- theory of Henri Fayol (1841-1925) on the manage- cording to the product types of industrial factories ment process to achieve the desired goals which in- in the EEC. clude: planning, organizing, commanding, coordi- 3. Management process factors affecting the nating, and controlling. 146 Data collection were at a high level, in descending order, as follows: Data was obtained from environmental cost ranked first (= 3.70), time was second (X =̅ 3.63) managers and factory employees who are involved and environmental (environment) was the last (X =̅ in waste management system in EEC covering three 3.43). provinces: Chonburi, Rayong and Chachoengsao. Table 2 Descriptive statistics, CR, AVE, and correla- These factories were located in both inside industrial tions estates and outside of the industrial estate, totaling 11,913 factories that have informed business opera- Variable Items X ̅ S.D. AVE CR tions. 1 2 3 4 5 6 7 8 From the calculation of the sample size ac- PLAN 2 3.88 0.70 0.95 cording to Taro Yamane's formula (Yamane, 1973), 0.98 0.98 the samples were 387 environmental managers from selected factories in the EEC. ORGN 2 3.75 0.74 0.90 0.95 0.79 0.95 4. RESULTS SAMPLE CHARACTERISTICS LEAD 3 3.65 0.77 0.86 From Table 1, the data of the sample group 0.95 0.74 0.86 0.95 showed that: COOR 3 3.60 0.77 0.90 1. With regard to factory size, it was found 0.97 0.64 0.84 0.81 0.96 that most respondents came from 165 medium-sized factories, accounting for 42.6 percent, followed by CONT 4 3.70 0.73 0.87 126 small factories, representing 32.6 percent, and 96 0.97 0.76 0.81 0.76 0.71 0.97 large factories, representing 24.8 percent respec- COST 2 3.70 0.76 0.92 tively. 0.96 0.63 0.73 0.74 0.74 2. In terms of industry, it was found that 0.77 0.96 most respondents work in the electronics and steel TIME 2 3.63 0.71 0.74 0.85 0.71 0.76 0.79 0.76 industries (185 factories) accounting for 47.8 percent, 0.79 0.83 0.85 followed by those working in the automotive indus- ENVI 2 3.43 0.71 0.87 0.93 0.45 0.58 0.63 0.51 1. Factory Size Number Percent 0.54 0.64 0.66 0.93 Small size 126 32.6 Medium size 165 42.6 Note: Cronbach’s Alpha is on the diagonal. Large size 96 24.8 Total 387 100.0 INFERENTIAL STATISTICS 2. Product type Number Percent Measurement testing Automotive 119 30.7 Electronics/ 185 47.8 To analyze measurement, reliability of items for steel each construct was evaluated by computing Processed food 83 21.5 Cronbach’s alpha, (see Table 2). All values were well Total 387 100.0 above 0.70 which exceeds the threshold levels rec- try (119 factories), representing 30.7 percent and ommended by Nunnally & Bernstein (1994). In ad- those working in the food industry (83 factories), ac- dition, exploratory factor analysis (EFA) was con- counting for 21.5 percent, respectively. ducted through principle component factor analysis Table 1 Sample characteristics method. Table 1 shows that the values of factor load- DESCRIPTIVE STATISTICS ings on only a single factor, ranging from 0.908 to From Table 2, the average mean of all aspects of 0.983, and there was no cross-loadings. This sug- industrial waste management process was at a high gests the unidimensionality of each item. level. When considering each aspect by sorting in Table 2 also provides the values of composite descending order, it was found that planning ranked reliability (CR), average variance extracted (AVE), No. 1 (X =̅ 3.88), followed by organization ranked an correlations are presented. As a result, all values 2nd (X =̅ 3.75), control ranked 3rd (X =̅ 3.70), order that CR for communication frequency, quality, for- ranked 4th (X =̅ 3.64) and coordination was ranked mality, and participation surpass acceptable levels (X =̅ 3.60), respectively. of 0.90 (Raykov, 1997). Moreover, all estimates of In terms of efficiency, information on the level AVE of 0.50, supporting measurement reliability. of overall industrial waste management efficiency To measure discriminant validity, the highest was considered at a high level (X =̅ 3.60). When con- squared correlation was observed between manage- sidering each aspect, it was found that all aspects ment and job efficiency (i.e. 0.862 = 0.73). This value 147 was lower than the AVE for these variables (i.e. 0.74 ordination (β = 0.275). Regarding large-sized facto- and 0.77), providing the evidence of discriminant ries, the controlling has the most significant impact validity ( Reference Fornell & Larcker, 1981). Over- (β = 0.422), followed by coordination (β = 0.355). all, the validity and reliability of the measurement In terms of time, the respondents from model was acceptable to proceed an evaluation of small-sized factories perceive that only controlling structural model so as to perform hypothesis testing. has the significant impact on efficiency (β = 0.637). To measure construct validity, confirmatory For medium-sized factories, commanding is the factor analysis (CFA) was performed by using most significant (β = 0.446), followed by controlling AMOS 6.0 that includes all variables in a single (β = 0.268), coordinating (β = 0.230), and organizing model (Table 3). The method used to analyze the (β = -0.196) respectively. Regarding large factories, data was structural equation modeling (SEM) coordinating is the most significant (β = 0.493), fol- method which is used to evaluate the fitness of pro- lowed by controlling (β = 0.226) and planning (β = posed conceptual model. SEM also provides the abil- 0.184) respectively. ity to examine the causal relationships among sets of In terms of environment, the respondents unobserved variables and describe the amount of from small-sized factories show that only control- unexplained variance simultaneously (Bollen, 1989). ling (β = 0.367) has a significant impact on efficiency. The results of the measurement model indicated a Medium-sized factories show that coordinating (β = moderate of fitness to the data ( 2 = 852.989, df = 0.329) has the most impact, followed by manage- 145, p = 0.00, CFI = 0.937. RMSEA = 0.112). ment (β = 0.180). Large-sized factories show that co- Table 3 Exploratory factor analysis: Principle ordination (β = 0.483) and controlling (β = 0.132) components extraction have the impact on job efficiency. Factor Table 4 Multiple regression of management on job 1 2 3 4 5 efficiency in different factory sizes Planning (PLAN) Job Efficiency Man- PLAN 1 0.983 age- Cost Time Environment PLAN 2 0.970 ment Organizing (ORGN) Sm Me- Lar Sm Me- Lar Sm Me- Lar all diu ge all diu ge all diu ge ORGN 1 0.952 m m m ORGN 2 0.950 PLAN 0.0 0.05 - 0.0 0.09 0.1 - 0.05 - 10 0 0.0 31 0 84* 0.0 3 0.24 Leading (LEAD) 02 56 6 LEAD 1 0.916 ORGN 0.0 0.00 - - - - 0.0 0.18 - 08 1 0.0 0.0 0.19 0.1 51 0* 0.23 LEAD 2 0.927 80 82 6* 34 8 LEAD 0.0 0.10 0.1 0.1 0.44 0.0 0.0 0.05 0.34 LEAD 3 0.944 53 3 07 22 6* 74 42 4 8 Coordinating (COOR) COOR 0.3 0.27 0.3 0,0 0.23 0.4 0.2 0.32 0.48 COOR 1 0.920 24* 5* 55* 53 0* 93* 93 9* 3* COOR 2 0.971 CONT 0.4 0.44 0.4 0.6 0.26 0.2 0.3 0.07 0.13 07* 9* 22* 37* 8* 26* 67* 8 2* COOR 3 0.958 R2 0.5 0.56 0.5 0.5 0.54 0.5 0.4 0.36 0.35 Controlling (CONT) 26 4 00 29 0 36 10 8 7 CONT 1 0.941 CONT 2 0.954 *p<.05 CONT 3 0.933 From Table 5, the hypothesis testing results showed CONT 4 0.908 that different industries have different industrial waste management, details as follows: HYPOTHESIS TESTING In terms of cost, industrial waste manage- From Table 4, hypothesis testing results show that ment factors affect the efficiency of industrial waste different factory sizes affect job efficiency with sta- management in descending order. In auto industry, tistical significance at the level of 0.05. It was found controlling (β = 0.468) has the most effect on job effi- that small factories had lower levels of industrial ciency, followed by coordination (β = 0.366). In elec- waste management efficiency than medium sized tronics industry, controlling (β = 0.445) has the high- factories and large factories as follows: est impact, followed by coordination ( β = 0.381). For In terms of cost, the respondents from small- food industry, controlling (β = 0.450) has the most sized factory perceived that controlling is the most impact, followed by planning (β = 0.256) respec- significant factor (β = 0.407), followed by coordina- tively. tion (β = 0.324). For medium-sized factories, control- In terms of time, factories in auto industry ling has most influence (β = 0.449), followed by co- showed coordination (β = 0.389) has the most im- pact, followed by leading (β = 0.274), and controlling 148 (β = 0.255). For electronics industry controlling (β = a system that has objectives, policies, plans and ac- 0.408) takes the lead, followed by leading (β = 0.237), tivities clearly explained in order to achieve the de- coordination (β = 0.214) and planning (β = 0.170) re- sired goals. spectively. For food industry, controlling (β = 0.349) Suggestions from this research has the most impact, followed by planning (β = From the results of the research, it was found 0.228), execution (β = 0.224) and coordination (β = that the size of industrial plants affects the efficiency 0.200). of management of industrial waste. In terms environment, industrial waste 1. The small industrial factory management management in auto industry show that coordina- should focus on controlling and coordinating. Me- tion (β = 0.563) has the most impact on job efficiency, dium and large industrial plant administrators followed by cooperation (β = 0.199). For electronics should put more emphasis on controlling, coordi- industry, only coordination (β = 0.391) affects effi- nating, planning, and organizing. ciency. Lastly, food industry shows that only lead- 2. As for the industry, the results of the ing is the significant factor affecting job efficiency (β study showed that the industry had a moderating ef- = 0.412). fect on the effect of waste management process on Table 5 Multiple regression of management on job job efficiency. In order to achieve waste manage- efficiency in different industries ment in the EEC, automotive industry managers Job Efficiency should focus on controlling, coordinating, and con- Man- Cost Time Environment trolling. Electronics and food industries should give age- ment priority to controlling, coordinating, ordering, and Aut Ele Fo Au Ele Fo Au El Fo planning. o c od to c od to ec od Suggestions for future research PLA - 0.0 0.2 - 0.17 0.2 - - - N 0.08 31 56* 0.0 0* 28 0.0 0.0 0.2 1. This study has defined variables in order 1 75 * 88 03 21 to study the relationship between industrial plant ORG - 0.0 0.0 0.0 - - - 0.1 0.1 size, types of industrial operations, management N 0.04 08 35 22 0.15 0.0 0.0 55 11 processes, knowledge and understanding in 9 2 49 89 industrial waste management affecting the LEA 0.71 0.0 0.1 0.2 0.23 0.2 0.1 - 0.4 efficiency of industrial waste management of D 3 08 36 74* 7* 24 66 0.0 12 industrial factories in the EEC. Future study should * 64 * COO 0.36 0.3 0.0 0.3 0.21 0.2 0.5 0.3 0.1 study the problems and impacts of industrial waste R 6* 81* 34 89* 4* 00 63 91 53 management that match the current situations and * * * trends for optimal benefit of applying research CON 0.46 0.4 0.4 0.2 0.40 0.3 0.1 0.1 0.2 results. T 8* 45* 50* 55* 8* 49 99 35 13 2. Future research study may emphasize * * on the environment and the community near the R2 0.66 0.6 0.7 0.6 0.62 0.7 0.5 0.3 0.4 factory and complement CSR with the community in 7 64 09 57 7 39 31 34 08 order to obtain useful research results for industrial *p<.05 plants in the EEC in accordance with the efficiency 5. CONCLUSION, IMPLICATION, of industrial waste management and the SUGGESTION, AND LIMITATIONS environment at large. Discussion of research results Based on the data on management process fac- REFERENCES tors affecting the efficiency of industrial waste man- Aiemjamroen, M. (2557). Household Garbage Man- agement of industrial factories in the EEC, it is found agement in the area of Bangchalong that overall the first factor affecting the work effi- Subdistrict Administration Organization, ciency is coordinating, followed by controlling, and Bangplee District, Samutprakarn Province. commanding because each factory has coordinating, Journal of Humanities and Social Sciences, controlling, and ordering in a systematic way. In ad- 8(15),21–27. dition, each factory has organization management Bollen, K. (1989). Structural equations with latent and planning policy that makes the management variables. NY: John Wiley & Sons. process more efficient which is consistent with a Chantawaing, J. (2546). Waste management of auto- study conducted by Chantawiang (2003) on waste mobile manufacturing: The case study management in automobile assembly plant which is of Toyota Motor Thailand Limited, Master de- gree of Science (Environmental Management), 149 Graduate School, National Institute of Develop- Fornell, C. & Larcker, D. (1981. Evaluating structural ment Administration, Bangkok. equation models with unobservable variables Chitlaoarporn, C., Singkaimook, P., Ngamsnit, S., and measurement error. Journal of Marketing Sriharun, B. (2555). The effectiveness of Research, 18(1), 39-50. Thai industrial pollution policy. Doctor of Nunnally, J. C. & Bernstein, I. H. (1994). Psychomet- Public Administration (Public ric theory (3 edn.). NY: McGraw-Hill. Administration), Valaya Alongkorn Rajabhat Pongwiriyakran, S. (2017). Industrial Waste Man- University under the Royal agement of Frozen Seafood Processing Plant in Patronage. Ranong Province. Master of Science (Industrial Department of Industrial Works. (2012). Manual 3Rs Technology) Sukhothai Thammathirat waste management in the factory. (Online). Open University. Available: Raykov,T. (1997). Evidence of composite reliability http://www2.diw.go.th/iwmb/form/iwd040 for congeneric measures. Applied Psycholog- _append%20k_Manual 3Rs. Pdf. ical Measurement, 21, 173 - 184. Department of Industrial Works. (2018). Certifica- Yamane, Taro. (1973). Statistics: An Introductory tion of therapists and waste disposal to Analysis. (3 rd edn.). NY: Harper and. Row Pub- request permission to remove waste from the lication. factory via electronic systems. Bangkok: Minis- try of Industry. 150 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings Market Reaction on Events Related to Indonesia’s 2019 Presidential Election Axel Indra Wirawan Sulistiono1 and Rr. Iramani2 1 STIE Perbanas Surabaya, Nginden Semolo 34-36 Street, Sukolilo, Surabaya, 60118, East Java, Indonesia 2 STIE Perbanas Surabaya, Nginden Semolo 34-36 Street, Sukolilo, Surabaya, 60118, East Java, Indonesia ARTICLE INFO ABSTRACT Article history: Presidential election is a big politic event which is able to influences stock’s perfor- Received mances. This research aims to examine the impacts of Indonesia’s presidential elec- Revised tion and official announcement of Komisi Pemilihan Umum (KPU) as presidential Accepted election organizer toward stock’s performances on Indonesia Stock Exchange (IDX). Samples used were the companies included in LQ-45 within range of April and May JEL Classification: 2019. The statistical methods used in this study are paired sample t-test and Wil- coxon signed rank test. The result shows that there are no significant differences before and after on both event for abnormal return. However, there is a significant Key words: differences for trading volume activity on presidential election, but not on official Presidential election, Abnormal return, announcement by KPU. Trading volume activity, Event Study ABSTRAK DOI: 10.6084/m9.figshare.9847910 Pemilihan umum presiden adalah peristiwa politik luar biasa yang mampu mempengaruhi kinerja saham. Penelitian ini bertujuan untuk mengamati dampak pemilihan umum presiden dan pengumuman resmi oleh Komisi Pemilihan Umum (KPU) sebagai penyelenggara pemilihan umum terhadap kinerja saham di Bursa Efek Indonesia (IDX). Sampel yang digunakan adalah perusahaan yang terdaftar di indeks LQ-45 dalam rentang waktu bulan April dan Mei tahun 2019. Metode statistik yang digunakan adalah paired sampel t-test dan Wilcoxon signed rank test. Hasil penelitian menunjukkan bahwa tidak terdapat adanya perbedaan abnormal return yang signif- ikan sebelum dan sesudah kedua peristiwa. Trading volume activity memiliki perbe- daan signifikan pada peristiwa pemilihan umum presiden, namun tidak pada peristi- wa pengumuman resmi oleh KPU. 1. INTRODUCTION ernments, public authorities, or private companies (Husnan and Pudjiastuti, 2015). The role of the cap- Investment is a one important economy ac- ital market is important for the country’s economy tivity that must be well-maintained in a country. as a means of bringing together excess funds and The definition itself is a commitment for a certain those who need funds. amo-unt of funds or resources at this time with one Generally, the capital market in a country is goal, to obtain benefits in the future. An investor sensitive to various events that happen around it. buys a number of shares with aim to obtain profits The capital market as an economic instrument can- by the shares’ price differences or dividends in the not be separated from various influences in the future based on time and calculated risks (Hartono, microeconomic and macroecenomic (Hutami and 2008). Ardiyanto, 2015). Additionally, changes in macroe- Capital market is important for investors. conomic environment that occur such as changes in The capital market is a concept that is narrower interest rates, inflation, as well as various economic than the financial market, where the capital market regulations and deregulation issued by the gov- only trades long-term financial instruments (or ernment can affect price fluctuations and trading securities) that can be traded both in the form of volumes in capital market (Hartono, 2008). debt and own capital, whether issued by gov- Investors will use events that are currently Axel Indra Wirawan Sulistiono1 and Rr. Iramani2, email address: 1 [email protected], 2 [email protected]. occurring or ongoing which is con-sidered as rele- event, but not in abnormal return. The result from vant information in conducting investment activi- the research conducted by Hutami & Ardiyanto ties (Zaqi, 2006). Generally, informations can be (2015) is different from the results of research con- obtained from internal and external conditions of ducted by Chandra (2015) which states that there is the company (issuer). Investors have information no significant differences in both abnormal returns that can change in the form of fluctuations in daily and trading volume activity before and after the transaction volume and frequency of transactions Indonesian presidential election in 2014. (Jauhari and Wibowo, 2004). According to Hartono (2008), research on the According to Hartono (2008), testing content impact of legislative elections on abnormal returns of the information is intended to see reaction of and trading volume activity is carried out through investors on the announcement. An announcement the event studies to observe the movement of stock that contains relevant information indicated by prices in the capital market when an event occurs changes in prices of the securities concerned, which and to find out the unusual investment roundtrips is caused by the reaction of the investors. This re- received by investors due to the event. The level of action can be measured by using abnormal return. sensitivity of capital market dynamics is influenced Conversely, if it is not possible to provide abnormal by macro factors, both eceonomic and non- returns then it cannot be considered as an an- economic factors. nouncement that contains relevant information The difference in results obtained from the (Hartono, 2008). researches that have been mentioned regarding the Additionally to abnormal return, trading impact of political events (presidential election) on volume activity as a parameter can be used to de- abnormal returns and trading volume activity moti- termine capital market reactions to information. vates the writer to reconduct the research in order Changes in trading volume activity are the result of to find out the differences between abnormal re- investor’s trading decisions that are affected by turns and trading volume activity before and after events that contain relevant information. Shares the presidential and legislative elections, as well as with high trading volume will give high returns the official announcement by Komisi Pemilihan (Chordia and Swaminathan, 2000). Umum (KPU). 2019 is a political year for Indonesia. This year, Indonesia is filled with extraordinary political 2. THEORETICAL FRAMEWORK AND HY- e-vents. There are presidential, vice presidential, POTHESES and legislative election held in 17 April 2019. There were two pairs of presidential and vice presi- Market Efficiency dential candidates before the presidential and vice Brealey, Myers and Allen (2008) stated that presidential elections were held. The first pair is stock price movements will always be random, and Joko Widodo and Ma’aruf Amin, while the second this concept has become known as random walk pair is Prabowo Subianto and Sandiaga Uno. theory. The theory states that future stock price Long before the election was held, an inter- movements cannot be predicted with past data. national event that had a significant impact on the According to Fama (1970), the market is said to be investment in Indonesia had taken place, even con- efficient if there are no investors who can obtain tinuing until June. The event was Chinese- abnormal returns in the long run by using existing American Trade war, which made investment trading mechanisms. The purpose of the statement flows declined in the first quarter of 2019, as ex- is that the share price is reflected in the information plained by the Governor of Bank Indonesia available in the market. The market reacts quickly (Laucereno, 2019). The event contributes in creating based on available information and will adjust to uncertainty for investors, especially investors in obtain new equilibrium prices. This type of market Indonesia. can be said to be efficient. Fama in Hartono (2008) Political events generally create uncertainty states that there are three main forms of market and most investors are not good with it. Many re- efficiency, namely weak form, semi-strong form, search that has been done still shows the presence and strong form. and absence of impacts caused by political events on stock trading, specifically the price and frequen- Signalling Theory cy of stock trading. Research conducted by Hutami According to Hartono (2008), signaling theo- & Ardiyanto (2015) concluded that a significant ry is an information that is published as an an- change occured in trading volume activity post- nouncement that gives signal, or signals to investor 152 in making investment decisions from companies mean-adjusted model, market-adjusted model, dan that intentionally give signals to the market. Inves- market model. tors will first analyze the information whether the Research conducted calculates expected re- signal is a good signal or a bad signal once the in- turns using the market-adjusted model, because the formation is received. The results of determining model estimates the returns of securities at the size signals will influence demand and supply in the of its market index return, so there is no need to use capital market. Changes in the number of requests period estimation. This model is used to convince and offers resulting from the signal causes the vola- that the reaction that occurs is a result of the ob- tility of stock prices which impact company’s value. served event, and not else (Hartono, 2008). The samples used were stocks that are listed in index Market Overreaction Hypothesis LQ-45. Market overreaction can occur if investors Hartono (2008) stated that abnormal returns involve emotions, experiences, and intuition in is excess return of realized return. The return dif- making their investment decision. Investors expect ferences will be positive if the realized returns is profits in the form of abnormal returns based on greater than the expected return, and vice versa. the desired news or to reduce conflicting results Abnormal return may occur after the announce- from unwanted news. Investors must react quickly ment of an event. It can be concluded that abnor- to new information. In general, investors tend to mal returns occurs, triggered by certain events such overreact to extraordinary events and new infor- as political events, extraordinary events, national mation. holidays, and so on. Return and the Measurement Trading Volume Activity According to Hartono (2008), returns are the Trading volume activity is a part of technical results obtained from an investment. Return is one analysis. High volume trading activities on an ex- factor that keeps investors motivated to continue change will interpreted as a sign that the market investing and at the same time as a reward for all either will be good or will be bad. The volume of the courage in investing and taking risks. The rela- stock trading can be used by investors to see tionship between expected returns and risk is a whether the shares that are bought are shares that directional or linear relationship, which means the actively traded have a large volume and stocks higher the risk, the higher the return that could be with large volumes will produce high stock returns obtained, and vice versa. There is a certain invest- (Luhur, 2010). ment asset that has a fixed and risk-free return, According to Husnan & Pudjiastuti (2015), even though it tends to be small. This point is measuring trading volume activity is used to see called the risk-free point.. whether individual investors value informative Sources of returns on investment consist of financial reports in the sense of whether the infor- two main components, namely yield and capital mation makes trading decisions above normal trad- gain/loss. Yield is a component of return that re- ing decisions, while Meidawati and Harimawan flects the cash flow or income obtained by an in- (2004) stated that the change of trading volume vestment periodically. As for the capital gain/loss, activity in capital market reflects investors’ invest- it is the increase or decrease in the value of a securi- ment decision. Stock tra-ding volume is an instru- ty which can be negative, zero, or positive. Return ment that can be used to observe capital market can be realized return (actual return), which is re- reactions on the information through the parame- turns that have already occured, and expected re- ters of changes in trading volume activity turns, whi-ch is have not occured yet but expected (Fatmawati and Asri, 1999). to occur in the future. Realized return is returns Judging from its function, the calculation of that has occured and is calculated based on histori- trading volume activity reflects the comparison cal data and can be used as a measure of the per- between the traded shares with outstanding shares formance of the company, and as a basis for deter- in a given period. mining expected returns and risk in the future (Hartono, 2008). Event Study Expected return is returns that is used for in- Event study is a study that studies the mar- vestment decision making. Brown and Warner in ket reaction to an event whose information is pub- Hartono (2008) stated, there are three models that lished as an announcement (Hartono, 2008). Mar- can be used to estimate the expected return, namely ket is expected to react to the announcement that 153 contains information. The reaction is shown by the (official announcement by KPU). change in price of the relevant security by using an abnormal returns measurement, so it can be said Relevancy of the Event on Trading Volume Activ- that the announcements that contain information ity will provide abnormal returns to the market and Trading volume activity is a part of technical vice versa (Hartono, 2008). analysis. High volume trading activities on an ex- Previous studies explain that the event study change will interpreted as a sign that the market was developed to analyze market reactions to an either will be good or will be bad. An increase in event whose information was published. These the stock trading volume with an increase in prices events include economic and non-economic events is symptom of improving stock value, which will to find out whether there are abnormal returns ob- soon reach a bullish condition (Meidawati & Ha- tained by shareholders. Event studies can also be rimawan, 2004). Trading volume activity is one used to test the information content of an event or indicator that signals the market reaction to an announcement. event (Wardhani and Djazuli, 2012). Market reaction is not only indicated by Relevancy of the Event on Abnormal Return changes in stock prices that are reflected in abnor- Signaling theory means that every action mal returns, but is also indicated by changes in contains information. Based on the context of event trading activities that are reflected in the trading studies, observation of stock prices in the capital volume of the company’s shares. Trading volume market is done to find out whether there are ab- can be measured by trading volume activity. Trad- normal returns obtained by shareholders as a result ing volume activity can be used to see whether in- of a particular event. Signaling theory provides an vestors individually assess information from an explanation that each event is believed to contain election as a positive or negative signal to make information that will affect the market (Białkowski, investment decisions. Investors will interpret it as a Gottschalk and Wisniewski, 2008). positive signal for the information if the demand Legislative election as an event allegedly has for shares get higher than the listed shares so that information content that can affect market reac- the trading volume will increases. tions. The market reaction is indicated by changes Results shown from study conducted by Hu- in the company’s stock price as measured by ab- tami & Ardiyanto (2015) stated that there is a sig- normal returns. It can be said that an announce- nificant differences in trading volume activity be- ment has information if the announcement pro- tween before and after the event, but the result is vide an abnormal returns to the market. Converse- not the same as the result from study conducted by ly, the event that does not contain information does Chandra (2015), and Luhur (2010) which stated that not provide an abnormal returns to the market there is no significant differences in trading volume (Hutami & Ardiyanto, 2015). activity before and after the event. Study conducted by Yuliana & Sudana (2015) Hypothesis 3 : There are significant differences in stated that there are significant differences in ab- trading volume activity of stocks normal returns between before and after the event, listed in Index LQ-45 before and af- but the result is not the same as the result from ter the event (presidential and leg- study that was conducted by Luhur (2010), Hutami islative election). & Ardiyanto (2015), and Chandra (2015) which Hypothesis 4 : There are significant differences in stated that there is no significant differences be- trading volume activity of stocks tween before and after the event. listed in Index LQ-45 before and af- Hypothesis 1 : There are significant differences in ter the event (official announce- abnormal returns of stocks listed in ment by KPU). Index LQ-45 before and after the Study conducted to see the impact of the event (presidential and legislative events (presidential and legislative election and election). official announcement by KPU) on abnormal re- Hypothesis 2 : There are significant differences in turns and trading volume activity, which is shown abnormal returns of LQ-45 index’s in figure 1 : stocks before and after the event 154 Figure 1 Research Framework 3. RESEARCH METHOD dows starting from April 10th to 24th for the presi- The population in this study are all compa- dential election and legislative (event one), and nies listed on the Indonesia Stock Exchange (IDX) May 15th to 29th for the official announcement by in the LQ-45 index. Data collection techniques in KPU (event two). study using purposive sampling with adjusted cri- Hypotheses testing in this study are deter- teria to the research objective. The sample criteria mined based on the result of the data normality used in this study are active shares included in the tests. Test equipment used will be adjusted to the LQ-45 index calculation in April and May 2019, and result of the data normality tests. did not take corporate action during the event win- Table 1 Variables Measurement Variables Formula Abnormal Return Excess return of realized return. AR i,t = R i,t - E[R i,t ] traded shares volume at t Trading Volume Acitvity Frequencies of stocks being traded. TVA = outstanding shares volume at t 4. DATA ANALYSIS AND DISCUSSION Figure 2 Mean Values Fluctuation in Presidential And Legislative Election (Event One) Figure 2 shows that the lowest mean value in t0 (the event day). It can be seen that the abnormal abnormal returns occured at t+1 with value of returns dropped to the lowest point at the day right -0.38%, while the highest mean value occured at t-4 after the event day followed with increased trading with a value of 0.81%. The lowest mean value in volume activity, and rising at the following day trading volume activity occured at t-4 with value of until t+3. It indicates that the event contains infor- 0.13%, while the highest mean value occured at t+1 mation, but not too much since the differences be- with a value of 0.37%. The lowest are the day after tween the values in event window are below 5%. 155 Figure 3 Mean Values Fluctuation in Official Announcement By KPU (Event Two) Figure 3 shows that the lowest mean value in turns is not due to transactions on the stock ex- abnormal returns occured at t-5 with value of -0.65%, change, but due to other events outside the official while the highest mean value occured at t-1 with a announcement by KPU, namely the riots that oc- value of 0.86%. The lowest mean value in trading cured on May 21-22 (Budi, 2019). Impact of event volume activity occured at t0 with value of 0.09%, two is not much compared with event one despite while the highest mean value occured at t+4 with a the riot that hap-pened at night before the event value of 0.30%. day. Additionally, there is even a rumor that KPU Fluctuation occured as spike before the event. will announce the result quietly, but was proven as a Abnormal returns decreases at t-0 from 0.86% to hoax (Hutabarat, 2019). The impact of event two on 0.06% when trading volume activity decreases by abnormal returns is even lower than event one. 0.13%. It could be that the decrease in abnormal re- Table 2 Comparison Test Before and After for Each Event Variables Event z Sig. Presidential and Legislative Election -0.021 0.983 Abnormal Return Official Announcement by KPU -0.854 0.393 Presidential and Legislative Election -3.128 0.002*** Trading Volume Activity Official Announcement by KPU -0.367 0.714 Tabel 3 shows the result of the comparison events whose impact is more significant compared test for abnormal returns before and after event one. to the observed event, such as Rupiah exchange rate Every tests are done using Wilcoxon signed ranked which tends to be depressed during April-May 2019 test because the data are not distributed normally. (Kompas Bisnis, 2019). An unstable condition of ru- (0.983 > 0.05) which shows no differences be- piah exchange rate should causes the company’s tween abnormal returns before and after event one. performance to decline which can affect stock prices. Same goes to abnormal returns before and after Investors whose risk averter nature (risk aversion) event two, which is not significant before and after are likely to respond quickly to this kind of infor- the event two (0.393 > 0.05). mation so that the action taken is to sell shares before Meanwhile, the result shows that there are the price falls, and the impact is a decrease in stock significant differences in trading volume activity in prices. One of the other reasons that could explain event one (0.002 < 0.05). Event two, however, does why is that Jokowi-Amin is strongly suspected to not show any significant differences in trading vol- win through all quick count results that mention ume activity before and after the event (0.714 > 0.05). how Jokowi-Amin excel Prabowo-Sandiaga before the official announ-cement by KPU (Tribun News, The Impact of Events on Abnormal Return 2019). During the previous period when Joko Wido- There are no significant abnormal returns dif- do served as a president (2014-2019), most investors ferences in both event. The absence of significant di- are familiar with the regulations, which make them fferences in abnormal returns can be due to other to be less uncertain in this politic year. The abnormal 156 returns is dropping at the day of the event respec- ich states that there are significant differences in tively, which indicates that the information contains trading volume activity before and after presiden- bad news to market. Like in event two, the trading tial and legislative elections is accepted, (3) hy- volume activity pothesis which states that there are significant dif- ferences in abnormal returns before and after offi- The Impact of Events on Trading Volume Activity cial announcement by KPU is rejected, and (4) hy- The results shown from the test conducted are po-thesis which states that there are significant dif- there are significant trading volume activity differ- ferences in trading volume activity before and after ences before and after event one, but no same result official announcement by KPU is rejected. obtained in event two. There is no overreaction ei- Recommendations for investors regarding ther in both events, looking from the graph that the study are that presidential and legislative elec- shows no value goes through 1%. tion, as well as the official announcement by KPU The significant trading volume activity differ- in Indonesia in 2019 does not affect LQ-45 index ences in event one could be caused by how fast mar- much. The information contained in respective ket react to the information related to presidential event is relevant but not significant since there are and legislative election. (Movanita, 2019) stated that no significant abnormal returns that could be ob- there are new investors throughout early 2019, tained throughout the event. which suspected to contribute to the changes in trad- This study only took 5 days before and after ing volume activity. Figure 1 shows how trading the event. The purpose of using this short amount volume increased at t+1, but followed by declining of time was to minimize the influence of other fac- trading volume activity. Again, since Jokowi-Amin tors on the abnormal return. However, using a is strongly suspected to win based one the quick shorter time would be recommended, considering counts, market does not overreact even in event that there are many events happened arount presi- window of official announcement by KPU, which is dential and legislative election. proven by no overreaction in trading volume activi- This research only assessed the impacts of ty throughout respective events. presidential and legislative election on abnormal The results obtained from this study in ac- returns on stocks listed in LQ-45 index. It is rec- cordance with the research conducted by Luhur ommended for the next research to conduct re- (2010), Chandra (2015), and Hutami & Ardiyanto search on other indexes listed on IDX such as (2015) which stated that there are no significant dif- Kompas 100, BISNIS-27, PEFINDO 25, SRI- ferences in abnormal returns before and after presi- KEHATI, Jakarta Islamic Indeks (JII) and so on. dential election. However, the result of trading vol- ume activity is not in accordance with research con- REFERENCES ducted by Luhur (2010) and Chandra (2015) that Białkowski, J., Gottschalk, K. and Wisniewski, T. P. stated no significant differences in trading volume (2008) ‘Stock market volatility around activity before and after presidential election, yet in national elections’, Journal of Banking & accordance with the research conducted by Hutami Finance, 32(9), pp. 1941–1953. & Ardiyanto (2015). Brealey, R. A., Myers, S. C. and Allen, F. (2008) ‘Brealey, Myers, and Allen on Real Options’, 5. CONCLUSION, IMPLICATION, SUGGES- Journal of Applied Corporate Finance, 20(4), pp. TION, AND LIMITATIONS 58–71. The study conducted aims to examine Chandra, T. (2015) ‘Impacts of Indonesia’s 2014 whether there are differences in abnormal returns Presidential Election towards Stock Priceso and trading volume activity before and after the Indonesia Stock Exchange’, International presidential and legislative election events, as well Journal of Business and Management, 10(7). as the official an-nouncement by KPU in Indonesia Chordia, T. and Swaminathan, B. (2000) ‘Trading in 2019. The observation period is five days before volume and cross‐autocorrelations in stock and after respective event. returns’, The Journal of Finance. Wiley Online Based on the data analysis that has been car- Library, 55(2), pp. 913–935. ried out on the hypotheses that are formulated, the Fama, E. F. (1970) ‘Efficient Capital Markets: A conclusions of each hy-pothesis are: (1) hypothesis Review of Theory and Empirical Work’, The which states that there are significant differences in Journal of Finance, 25(2), p. 383. abnormal returns before and after presidential and Fatmawati, S. and Asri, M. (1999) ‘Pengaruh Stock legislative elections is rejected, (2) hypothesis wh- Split terhadap Likuiditas saham yang diukur 157 dengan besarnya Bid-ask spread di Bursa sementara-10-lembaga-survei-jokowi-maruf- Efek Jakarta’, Journal of Indonesian Economy amin-unggul-dari-prabowo- and Business, 14(4). sandiaga?page=4. Hartono, J. (2008) ‘Teori Portofolio dan Analisis Wardhani, L. S. and Djazuli, A. (2012) ‘Reaksi Pasar Investasi’, Edisi Kelima. Yogyakarta: BPFE. Modal indonesia terhadap Peristiwa Husnan, S. and Pudjiastuti, E. (2015) ‘Dasar-Dasar pemilihan gubernur DKI Jakarta putaran ii Manajemen Keuangan, Edisi Ketujuh’, 2012 (event study pada saham Anggota Yogyakarta: UPP STIM YKPN. indeks kompas 100)’, Jurnal Ilmiah Mahasiswa Hutabarat, D. (2019) KPU Bantah Penetapan Hasil FEB, 1(1). Pemilu 2019 Disebut Senyap, liputan6.com. Zaqi, M. (2006) ‘Reaksi Pasar Modal Indonesia Available at: Terhadap Peristiwa–Peristiwa Ekonomi Dan https://www.liputan6.com/pilpres/read/3 Peristiwa–Peristiwa Sosial-Politik Dalam 971898/kpu-bantah-penetapan-hasil-pemilu- Negeri (Studi Pada Saham Lq45 Di Bej 2019-disebut-senyap. Periode 1999-2003)’. program Pascasarjana Hutami, R. N. and Ardiyanto, M. D. (2015) Universitas Diponegoro. ‘Abnormal Return Dan Trading Volume Activity Sebelum Dan Setelah Pemilihan Presiden Secara’, 4, pp. 1–10. Jauhari, B. R. and Wibowo, B. (2004) ‘Analisis fundamental terhadap return saham pada periode bullish dan bearish Indeks Harga Saham Gabungan’, Jurnal Akuntansi dan Keuangan, 9(2), pp. 17–32. Laucereno, S. F. (2019) Gubernur BI Beberkan Dampak Perang Dagang AS vs China, detikFinance. Available at: https://finance.detik.com/berita-ekonomi- bisnis/d-4582925/gubernur-bi-beberkan- dampak-perang-dagang-as-vs-china (Accessed: 10 July 2019). Luhur, S. (2010) ‘Reaksi Pasar Modal Indonesia Seputar Pemilihan Umum 8 Juli 2009 pada Saham LQ-45’, Jurnal Keuangan dan Perbankan, 14(2), pp. 249–262. Meidawati, N. and Harimawan, M. (2004) Pengaruh Pemilihan Umum Legislatif Indonesia Tahun 2004 Terhadap Return Saham Dan Volume Perdagangan Saham LQ-45 di PT Bursa Efek Jakarta (BEJ), Jurnal Fakultas Hukum UII. Islamic University of Indonesia, 7(1). Movanita, A. N. K. (2019) Per Mei 2019, Investor Pasar Modal Indonesia Mencapai 1,9 Juta, kompas.com. Available at: https://money.kompas.com/read/2019/06/ 26/141032126/per-mei-2019-investor-pasar- modal-indonesia-mencapai-19-juta. Tribun News (2019) Hasil Quick Count Sementara 10 Lembaga Survei: Jokowi-Ma’aruf Amin Unggul dari Prabowo-Sandi, tribunnews.com. Available at: https://www.tribunnews.com/pilpres- 2019/2019/04/17/hasil-quick-count- 158 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings Relationship Marketing Influences Toward Customer Loyalty Through Service Quality and Customer Satisfaction in Jiwasraya Customers Sunarti1, Tatik Suryani2 1 Jiwasraya Insurance, Co. Ltd. (Company) Mojokerto Branch Office , Jl. RE Basuni No. 580, 61361, East Java, In- donesian 2 Economical Science Institute of Perbanas Surabaya, Jl. Nginden Semolo No. 34 – 36, 60118, East Java, Indonesian A RTICLE INFO ABSTRACT Article history: The purpose from this research is for examining influence significance of Relationship Received Marketing toward customer loyalty through Service Quality and customer Revised satisfaction. The population in this research consists of the personal life insurance Accepted customers of Jiwasraya, Co. Ltd. The research involves 95 customers of personal life insurance of Jiwasraya, Co. Ltd chosen randomly. The data analysis used is Partial JEL Classification: Least Square (PLS). The analysis results show that Relationship Marketing has positive significant influences toward Service Quality, Customer Satisfaction, and Customer Loyalty. The analysis results also find that Service Quality has positive Key words: significant influences toward variables of Customer Satisfaction and Customer Relationship Marketing, Loyalty. These results also support the previous research that Customer Service Quality, Satisfaction has positive significant influences toward Customer Loyalty. Customer Satisfaction. DOI: 10.6084/m9.figshare.9823463 ABSTRAK Tujuan dari penelitian ini adalah untuk menguji signifikansi pengaruh pemasaran relasional terhadap loyalitas pelanggan melalui kualitas layanan dan kepuasan pelanggan. Populasi dalam penelitian ini adalah nasabah asur- ansi jiwa perorangan PT Jiwasraya . Penelitian melibatkan 95 nasabah asuran- si jiwa perorangan PT Jiwasraya yang dipilih secara random. Analisis data yang digunakan adalah Partial Least Square (PLS). Hasil analisis menunjukkan bahwa Pemasaran Relasional memiliki pengaruh positif yang signifikan terhadap Kualitas Layanan, Kepuasan Pelanggan, dan Loyalitas Pelanggan. Hasil analisis juga menemukan bahwa Kualitas Layanan memiliki pengaruh positif yang signifikan terhadap variabel Kepuasan Pelanggan dan Loyalitas Pelanggan. Hasil ini juga mendukung penelitian sebelumnya bahwa Kepuasan Pelanggan memiliki pengaruh positif yang signifikan terhadap Loyalitas Pelanggan. 1. INTRODUCTION customers, good word of mouth (WOM) and low Jiwasraya Insurance, Co. Ltd. (Company) (Ji- costs in maintaining new customers (Whyatt and wasraya) is the only State-Owned Enterprises that Koschek, 2010). runs in life insurance field. As business entity, the From the branches of Jiwasraya Insurance, Co. Ltd. company is demanded to have superior business available in East Java, one of branches that performances. Therefore, the company attempts to experiences the problems of performance decreases improve retail premium incomes through is Mojokerto Branch. Based on the data gotten in insurance product sales by market targets of new Jiwasraya, Co. Ltd. Mojokerto branch, it shows customers and old customers. there are problems, i.e. there are decreases in In the efforts of improving marketing personal coverage premium incomes for the latest 2 performances, the company attempts to maintain years. old customers by attracting new customers through Relationship Marketing. By applying Relationship Marketing, it is hoped to be able to create loyal * Corresponding author, email address: [email protected]. Decreases in personal coverage premium incomes identifying and building, maintaining and in 2016 to 2017. If this case is not reviwed about the improving customer relations by the purposes for causes, it is estimated that it will decrease the seeking benefits so the importances of both parties company performances. This case also indicates can be achieved. less good loyalty (the customers move to other The purposes of Relationship Marketing can be insurances), how relatively difficult to attract new achieved if all requirements and wishes of both customers. The previous interview results parties are fulfilled. Therefore, it can be concluded conducted to the customers show that the services that the purposes of Relationship Marketing are for given are improper to the hopes, besides that, there improving customer commitments toward are also decreases from the agents in giving cares company through many methods by permanently and they are less responsive to the customers. reducing the costs that should be spent. Several previous researches showed that loyalty is Relationship Marketing is also oriented to customer important condition for creating continuous retention, maintaining contacts to customers, performances. The created loyalty will refer to the focused on customer values, long-term scales, created competitive superiorities (Zineldin, 2006). enforcing in customer services, committed to Therefore, it is important for reviewing the factors customer hope fulfillments, all staffs focus on that influence in loyalty especially in insurance qualities (Payne et al., 1995). service field that has not been considerably reviewed all this time. 2.2 Service Quality Relationship Marketing and Service Quality are Service Quality can be defined as how far the seen as important conditions that can influence differences between realities and hopes of Customer Loyalty. The study conducted in banking customers upon the services that have been services shows that Relationship Marketing accepted (Parasuraman cs., 1998). In the study influences positively in loyalty (Ndubisi, 2007). about SERVQUAL (Parasuraman cs, 1998), there Service Quality is seen as important aspect that can are five dimensions of SERVQUAL as follows: form Customer Loyalty. The study in several 1) Physical. Physical/tangible i.e. abilities of services shows that the better the customer some company in showing the existences to perception toward Service Quality, it will impact external parties. on the more loyal the customers. 2) Reliability. Reliability is company ability Based on the background explanations above, so for giving services according to the this research focuses on “Relationship Marketing promised accurately and belieavably. Influences toward Customer Loyalty through 3) Responsiveness. Reponsiveness is some Service Quality and Customer Satisfaction in policy for helping and giving quick service Jiwasraya Customers”. Especially, the purposes responsively and accurately to customers from this research are for examining: (1) influence by giving clear informations. significance of Relationship Marketing toward 4) Guarantee and certainty. Guarantee and Service Quality in Jiwasraya customers; (2) certainty are sciences, politenesses, and influence significance of Relationship Marketing abilities of company employees for toward Customer Satisfaction in Jiwasraya growing trust feelings of customers to the customers. (3) influence significance of Relationship company. Marketing toward Customer Loyalty in Jiwasraya 5) Empathy. Empathy is giving sincere customers; (4) influence significance of Service attentions individually or personally given Quality toward Customer Satisfaction in Jiwasraya to customers by attempting to understand customers; (5) influence significance of Service their wishes. Quality toward Customer Loyalty in Jiwasraya customers; (6) influence significance of Customer 2.3 Satisfaction Satisfaction toward Customer Loyalty in Jiwasraya Tjiptono (2011:349) stated that consumer customers. satisfaction is some emotional respond felt by customer in evaluation of some product consumed. 2. THEORETICAL FRAMEWORK AND HY- According to Kotler and Keller (2012:138) that POTHESES satisfaction is happy or disappointed feeling of 2.1 Relationship Marketing someone that occurs after comparing performances The understanding of Relationship Marketing or results from some products thought toward the based on the statement of Gronroos’s (1994) is for performances or results hoped. 160 Customer satisfaction can be measured through the H6 : There are Customer Satisfaction influences indicators as follows (Tjiptono, 2011:453) : (1) Over- toward Customer Loyalty in Jiwasraya all Satisfaction, entirely is satisfied toward one customers certain experience by using this product; (2) Con- firmation Of Expectation, it does not regret about the decisions for using this product; and (3) Comparison 3. RESEARCH METHOD To Ideal, it is satisfied with the results achieved after 3.1. Research Type using this product. This research includes into causal research for examining whether one variable causes changes in 2.4 Loyalty other variables. The research wants to describe one Customer Loyalty is defined as customer intensity factor or more factors that cause some problems for purchasing insurance products in the future and (Sekaran and Bougie, 2016:44). conducting good word-of-mouth (WOM). In the In this research, Populational Description and Samples beginning of development, according to Dick and consists of all Jiwasraya customers who have life Basu (1994) customer loyalty considerably insurance policy of personal coverage and managed in emphasizes on attitude aspects, and today is Mojokerto Branch. broadened by involving character and attitude Hair in Ferdinand (2002:47) found that the dimensions (Tatik Suryani, 2013:111). Loyalty appropriate sample sizes are between 100 to 200 in attitude and WOM are used as life insurance industrial characteristics in which loyalty attitudes which minimal sample sizes are as 5 observations refer to how often the customers repurchase in each estimated parameter. In this research, there insurance product in the future and WOM is showed by the customers who reference the are 19 indicators and this research will use 100 company to other people. samples from customers as respondents. The Research Model samples that will be used are as 95 samples and 5 samples for anticipating the samples in which the fillings are incomplete. 3.2. Methods of sampling The Methods of sampling in this research uses sample taking by probability sampling in which the total chances or populational elemental probabilities for chosen as sample subjects are known, and designs of taking simple random Figure 1 : Research Model sampling, i.e. taking sample members from the population randomly without caring the available Research Hypothesis stratas in the population (Sugiyono, 2016). H1 : There are Relationship Marketing influences toward Service Quality in 3.3. Method and Data Collection Procedures Jiwasraya customers The data collection method used in this research is H2 : There are Relationship Marketing conducting survey in written by spreading influences toward Customer Satisfaction in questionnaires to Jiwasraya customers of personal Jiwasraya customers coverage of Mojokerto Branch Office as the chosen H3 : There are Relationship Marketing respondents in the Methods of sampling that has influences toward Customer Loyalty in been determined. Jiwasraya customers H4 : There are Service Quality influences Variable Identifications toward Customer Satisfaction in Jiwasraya customers 1. Exogenous Variable H5 : There are Service Quality influences In this research, the exogenous variable is Re- toward Customer Loyalty in Jiwasraya lationship Marketing (PR). Relationship Marketing customers is customer evaluation toward the company 161 abilities in making relations financially by using Refere Var No Indicator No price incentives for driving customers in nce purchasing items or services or offering the cheaper holders products in long term. Jiwasraya employees considerably KL 2. Endogenous Variables 5 In this research, the endogenous variables (Y) understand the 5 are Service Quality (KL), Customer Satisfaction insurances needed (KP), and Customer Loyalty (LY). by the customers I tell positive things LY 1 about Jiwasraya to Variable Operational Definitions 1 other people I suggest Table 1 : Instrumental Developmental Grid friends/relatives/fa Refere LY Var No Indicator No 2 milies for using nce 2 Jiwasraya Tsu- The premium that I insurances 1 pay according to PR1 Wei Cus I recommend policy benefits Tsu- LY Yu Wei tom 3 Jiwasraya to other Jiwasraya gives 3 Lu- Yu, er people 2 promotions/interest PR2 Ming Feng- Loy Jiwasraya is the Re- ing gifts Tseng Cheng alty main choice for LY la- I am easy to contact 4 cs 3 PR3 Tung purchasing 4 tion Jiwasraya agents (2016) cs insurances ship Jiwasraya agents 4 PR4 (2013) I permanently Mar are very caring and purchase Jiwasraya keti I believe Jiwasraya adopte insurances although LY ng will pay claims 5 5 PR5 d by there are offerings 5 according to the the from other promised researc insurances 6 Jiwasraya gives PR6 her services that I hope 3.4. Data Analysis Method Overall, I am The Methods of sampling in this research satisfied with the uses sample taking by probability sampling. In this KP 1 certain experiences research, there are 19 indicators and this research 1 by using Jiwasraya will use 100 samples from the customers as the Cus insurance products respondents. The samples that will be used are as tom I do not regret 95 samples and 5 samples for anticipating the er Tjipto about the decisions KP Sat- 2 no samples in which the fillings are incomplete. for using Jiwasraya 2 isfa (2011) In this research, for analyzing data, it is used insurance products ctio Structural Equation Modelling (SEM) in which for the I am satisfied with n operational processes uses PLS program of version the results achieved KP 3.0. SEM uses enable the researcher to combine 3 after using 3 factor analysis developed in psychological and Jiwasraya psychometrical sciences and simultaneous equation insurance products modeling simultaneously (Ghozali 2014:3). Jiwasraya KL 1 employees have Fer- 1 tidy performances nandes 4. DATA ANALYSIS AND DISCUSSION cs Jiwasraya can Outer Model Test Ser KL (2016) 2 fulfill service vice 2 and promises timely Qua adopte The outer model is often called outer relation or The employees are lity KL d by measurement model specifying the relationship 3 quick to respond 3 the between the variables studied and the indicators. customer demands researc The agents enforce KL 4 her trusts to policy 4 162 Convergent Validity Test convergent validity values are above 0.5. Customer To test the validity of each indicator, a model test is Loyalty Variable (Y) which in this study was meas- carried out through the loading factor. This is ured by five items declared valid as a measure of intended to determine the validity of each indicator the construct. of the variable being studied. In accordance with the provisions of each indicator in the model must Discriminant Validity have a convergent validity value > 0.5, so if an To test the block validity of the indicators a discri- indicator meets the loading factor value greater minant validity test is performed. This validity test than 0.5, then further analysis can be done. The is done by looking at the value of the cross loadings results of the convergent validity test are presented between the indicators and their constructs as pre- in Table 2. sented in Table 3 below. The indicator block is said to be valid if the value of each indicator in measur- Table 2 : Convergent Validity Test ing its construct variable (= indicator block) is dom- inantly higher when compared to the value of each Origi- indicator in measuring the other construct varia- nal bles. Mean of Stand- T- Num- Sam- Subsam- ard De- Statis- ber ple Table 3 : Cross Loadings ples viation tic Esti- Rela- Ser- mate tion- vice Customer Customer Relationship Marketing (X) ship Qua Satisfaction Loyalty PR1 0.792 0.780 0.059 13.381 Market- lity (Z2) (Y) PR2 0.486 0.473 0.123 3.956 ing (X) (Z1) PR3 P 0.735 0.719 0.083 8.901 0.40 R 0.792 0.419 0.447 PR4 0.733 0.722 0.076 9.674 7 PR5 0.729 0.723 0.072 10.072 1 P PR6 0.784 0.781 0.041 18.917 0.11 R 0.486 0.163 0.252 Service Quality (Z1) 8 KL1 0.822 0.816 0.041 20.263 2 P KL2 0.834 0.831 0.036 23.357 0.25 R 0.735 0.337 0.380 KL3 0.821 0.813 0.047 17.642 6 3 KL4 0.839 0.833 0.043 19.595 P KL5 0.747 0.740 0.063 11.836 0.28 R 0.733 0.411 0.434 2 Customer Satisfaction (Z2) 4 KP1 0.883 0.881 0.026 33.576 P 0.43 KP2 0.865 0.859 0.032 27.090 R 0.729 0.507 0.407 7 KP3 0.897 0.893 0.029 30.720 5 Customer Loyalty (Y) P 0.26 LY1 0.814 0.811 0.042 19.276 R 0.784 0.520 0.424 9 LY2 0.788 0.779 0.051 15.335 6 LY3 0.820 0.817 0.041 20.120 K 0.82 0.363 0.446 0.506 LY4 0.788 0.787 0.040 19.490 L1 2 LY5 0.802 0.794 0.048 16.668 K 0.83 0.387 0.628 0.497 Source: processed by researchers L2 4 K 0.82 0.388 0.458 0.435 Based on Table 2, the Relationship Marketing vari- L3 1 able (X) measured by 6 items is declared valid as a K 0.83 0.403 0.475 0.450 measurement tool for the construct, because the L4 9 convergent validity value is more than 0.5. The K 0.74 0.201 0.470 0.408 results also show for the variable Service Quality L5 7 (Z1) and Customer Satisfaction (Z2), each of which K 0.49 0.566 0.883 0.603 is measured by 5 items and 3 items are declared P1 2 valid as a measure of the construct, because the K 0.461 0.59 0.865 0.556 163 Rela- Ser- tionship Marketing (X) of 0.862, composite reliabil- tion- vice Customer Customer ity for Service Quality (Z1) of 0.907, composite reli- ship Qua Satisfaction Loyalty ability for Customer Satisfaction (Z2) of 0.913, and Market- lity (Z2) (Y) composite reliability for Customer Loyalty (Y) of ing (X) (Z1) 0.900. The requirement is that if the composite reli- P2 4 ability value > 0.60 is interpreted to be very satisfy- K 0.54 ing (Ghozali, 2012). 0.491 0.897 0.626 P3 0 L 0.47 Table 5 : Composite Reliability 0.482 0.549 0.814 Y1 2 Variable Composite Re- L 0.45 liability 0.448 0.571 0.788 Y2 1 Relationship Marketing (X) 0.862 L 0.44 Service Quality (Z1) 0.907 0.408 0.538 0.820 Y3 6 Customer Satisfaction (Z2) 0.913 L 0.43 Customer Loyalty (Y) 0.900 0.450 0.520 0.788 Y4 5 Source: Primary data L 0.47 0.428 0.526 0.802 Y5 0 Referring to Table 5, it can be explained that from Source: Primary data the provisions regarding composite reliability, all the constructs studied have met the criteria of com- The value of cross loadings in Table 3 above is ob- posite reliability, so that each construct can be posi- tained overall from the construct construct ex- tioned as a research variable. This indicates that in pressed as having good discrimination. Where the a composite manner all variables have adequate value of the correlation of indicators of the con- internal consistency in measuring the measured struct must be greater than the value of the correla- latent / construct variable so that it can be used in tion between indicators with other constructs. further analysis. Average Variance Extracted (AVE) Inner Model Test Reliability of construct variables is important to know. For this reason, VE aims to test the reliability The analysis shows the value of inner weight for of construct variables. AVE aims to establish that Service Quality and Customer Satisfaction Varia- the construct variable has a good discriminant va- bles are equally influenced by Relationship Marke- lidity value. AVE value is satisfactory if> 0.5. AVE ting. Besides that Customer Loyalty Variables are test results can be seen in Table 4 as follows: influenced by Relationship Marketing, as well as Table 4 : AVE Value Service Quality and Customer Satisfaction shown Variable AVE Value in the following equation: Relationship Marketing (X) 0.515 Z1 = 0.434 X Service Quality (Z1) 0.662 Z2 = 0.379 X + 0.449 Z1 Customer Satisfaction (Z2) 0.778 Y = 0.221 X + 0.216 Z1 + 0.416 Z2 Customer Loyalty (Y) 0.644 In assessing a model with PLS it starts by Source: Primary data looking at the R-square for each latent dependent variable. Changes in the value of R-square can be Refer to table 4, it is known that the discriminant used to assess the effect of certain independent la- validity value for the indicator block measuring the tent variables on the dependent latent variable construct is good because the AVE value > 0.5. whether it has a substantive effect. Based on these results it means that all constructs Table 6 : R-Square Value studied that include Relationship Marketing, Ser- Variable R-Square vice Quality, Customer Satisfaction, and Customer Relationship Marketing (X) Loyalty are reliable. Service Quality (Z1) 0.118 Customer Satisfaction (Z2) 0.494 Composite Reliability Customer Loyalty (Y) 0.525 Another test is the composite reliability of the indi- Source: Primary data cator block that measures the construct (Ghozali, 2012). The results of composite reliability for Rela- 164 The results of the structural equation analysis show Sta that Relationship Marketing influences Quality. nda Sa T The amount of R2 is 0.118. This shows that the Orig rd mpl Sta- model is “weak”. Other results show that inal De- P e tistics Sam via- Val Relationship Marketing and Service Quality Me (|O/S ple tion ues variables that affect Customer Satisfaction in the an TDE (O) (ST structural model have an R2 value of 0.494 which is (M) V|) included in the medium category. Relationship DE Marketing, Service Quality and Customer V) Satisfaction affect Customer Loyalty. The ability of Quality (Z1) these variables in explaining customer loyalty is Relationship Marketing (X) shown by R2 of 0.525. This shows that the model is 0.36 0.14 0.01 -> Customer 0.379 2.561 “moderate”. The suitability of the structural model 9 8 1 can be seen from Q2, as follows: Satisfaction Q2 = 1 – [(1 – R1) X (1 – R2) X (1 – R3)] (Z2) = 1 – [(1 – 0.118) X (1 – 0.494) X (1 – 0.525)] Relationship Marketing (X) 0.21 0.13 0.11 = 1 – [(0.882) X (0.506) X (0.475)] 0.221 1.598 = 1 - [0.212] -> Customer 5 8 1 = 0.788 Loyalty (Y) Service Quali- Hypothesis Testing ty (Z1) -> 0.45 0.13 0.00 To test the research hypothesis, Bootstrapping is Customer 0.449 3.414 4 2 1 performed. The results are presented in Figure 2. Satisfaction (Z2) Service Quali- ty (Z1) -> 0.22 0.16 0.18 0.216 1.323 Customer 6 3 7 Loyalty (Y) Customer Satisfaction 0.41 0.15 0.00 (Z2) -> Cus- 0.416 2.714 1 3 7 tomer Loyalty (Y) Source: Primary data T-test results presented in table 7 show that: Figure 2 : Analysis Results 1. Relationship Marketing has a significant in- fluence on Service Quality, because the T To prove the research hypothesis that was formu- statistics value is 3,237, which means it is lated, a t-test was conducted. t-test results are pre- greater than 1.96. sented in Table 7. 2. Relationship Marketing has a significant in- fluence on Customer Satisfaction, because Table 7 : Hypothesis Test the T statistics value is 2.561, which means Sta greater than 1.96. nda Sa T 3. Relationship Marketing does not have a sig- Orig rd mpl Sta- nificant influence on Customer Loyalty, be- inal De- P e tistics cause the T statistics value is 1.598, which Sam via- Val Me (|O/S ple tion ues means it is smaller than 1.96. an TDE (O) (ST 4. Service Quality has a significant influence (M) V|) DE on Customer Satisfaction, because the T sta- V) tistics value is 3,414, which means it is Relationship greater than 1.96. 0.42 0.13 0.00 Marketing (X) 0.434 3.237 5. Service Quality does not have a significant 4 4 1 -> Service influence on Customer Loyalty, because the 165 T statistics value is 1.323, which means it is The results of this study are in line with research smaller than 1.96. conducted by Naderian and Baharun (2013) finding 6. Customer Satisfaction has a significant in- Relationship Marketing has a significant influence fluence on Customer Loyalty, because the T on Customer Satisfaction. These results are also in statistics value is 2,714, which means it is line with the findings of Harianto (2017) which greater than 1.96. proves that Relationship Marketing partially has a positive and significant influence on customer satis- Discussion faction. Likewise, the findings of Bramulya et al The Influence of Relationship Marketing on Ser- (2016) found that Relationship Marketing has a vice Quality significant influence on Customer Satisfaction. The results of the analysis show that Relationship The Influence Relationship Marketing on Customer Marketing partially has a significant influence on Loyalty Service Quality, this can be seen from the table 4.15 Based on the results of a partial analysis of this whose value is 3,237 which means it is greater than study shows that Relationship Marketing has no 1.96. Thus the first hypothesis which reads "There is significant influence but has a positive influence on an influence of Relationship Marketing on Service Customer Loyalty, this can be seen from the value Quality on Jiwasraya customers" is declared ac- of the table 4.15 whose value is 1.598 which means cepted. smaller than 1.96. Thus the third hypothesis which Based on the results of the analysis obtained the reads "There is an influence of Relationship Market- original sample estimate value of 0.408 for Rela- ing on Customer Loyalty on Jiwasraya customers" tionship Marketing (X) variable on Service Quality is declared not accepted. (Z1) which shows the direction of a positive rela- The results of the analysis show that Relationship tionship between Relationship Marketing and Ser- Marketing has no significant influence but has a vice Quality. This shows that the better Relation- direction of positive influence on Customer Loyalty ship Marketing implemented by Jiwasraya Mojok- as indicated by the value of the original sample erto Branch, the higher the Service Quality given to estimate of 0.271. This shows that the better Ji- customers, and vice versa if Relationship Marketing wasraya Mojokerto Branch in implementing Rela- decreases there will also be a decrease in Service tionship Marketing, the more it can increase Cus- Quality provided to customers. tomer Loyalty. And vice versa, the lower Relation- The results of this study are in line with research ship Marketing implemented by Jiwasraya Mojok- conducted by Yu and Tung (2013) who found that erto Branch, the Customer Loyalty will be able to Relationship Marketing which includes financial, decrease. social and structure applied to life insurance has a The findings in this study are not in line with the positive influence on Service Quality. findings of Kipu (2013), who found that Relation- ship Marketing influences customer loyalty at Ma- The Influence of Relationship Marketing on Cus- tahari Departement Store. The results of this study tomer Satisfaction also do not support the findings of research con- Based on the results of a partial analysis of this ducted by Yu and Tung (2013) who found that Re- study shows that Relationship Marketing has a lationship Marketing which includes financial, so- significant influence on Customer Satisfaction, this cial and structure applied to life insurance has a can be seen from the value of the table 4.15 which is positive influence on Customer Loyalty. 2.561, which means it is greater than 1.96. Thus the second hypothesis which reads "There is an influ- The Influence Service Quality on Customer Satis- ence of Relationship Marketing on Customer Satis- faction faction on Jiwasraya customers" is accepted. Based on the results of a partial analysis of this The value of the original sample estimate of 0.302 study showed that Service Quality has a significant for the Relationship Marketing (X) variable on Cus- positive influence on Customer Satisfaction, this tomer Satisfaction (Z2) which indicates the direc- can be seen from the value of the table 4.15 whose tion there is a positive relationship between Rela- value is 3,414 which means it is greater than 1.96. tionship Marketing and Customer Satisfaction. This means that the higher Relationship Marketing im- Thus, the fourth hypothesis which reads "There is plemented by Jiwasraya companies, the Customer an influence of Service Quality on Customer Satis- Satisfaction will increase. faction on Jiwasraya customers" is declared accept- ed. 166 Based on the results of the analysis obtained the also do not support the findings of Qureshi and original sample estimate value of 0.392 for the Ser- Bhat (2015) who find that there is a significant cor- vice Quality (Z1) variable on Customer Satisfaction relation between loyalty and the dimensions of (Z2) which shows the direction of a positive rela- Service Quality. tionship between Service Quality and Customer Satisfaction. This shows that the better Jiwasraya The Influence Customer Satisfaction on Customer Mojokerto Branch in providing services to custom- Loyalty ers, the more it can improve Customer Satisfaction. Based on the results of a partial analysis of this Likewise, on the contrary, the lower the service study shows that Customer Satisfaction has a provided by Jiwasraya Mojokerto Branch to cus- significant influence on Customer Loyalty, this can tomers, the more it can reduce the satisfaction felt be seen from the value of the table 4.15 whose value by customers. is 2.714, which means greater than 1.96. Thus the This supports the theory expressed by Tjiptono sixth hypothesis which reads "There is an influence (2011: 435) which explains that satisfaction occurs of Customer Satisfaction on Customer Loyalty on when the fulfillment of needs or expectations is Jiwasraya customers" is declared accepted. Based achieved through interactions conducted by sellers on the results of the analysis obtained the value of and buyers. the original sample estimate of 0.223 for the Cus- These findings support the findings of Bramulya et tomer Satisfaction (Z2) variable on Customer Loyal- al (2016) which proves that Service Quality has a ty (Y) which shows the direction of a positive rela- significant influence on Customer Satisfaction. Re- tionship between Customer Satisfaction with Cus- search conducted by Qureshi and Bhat (2015) tomer Loyalty. This shows that the higher satisfac- shows that there is a significant correlation between tion felt by the customer will increasingly have an satisfaction and Service Quality dimensions. impact on increasing customer loyalty. And vice versa the lower the satisfaction felt by the customer, The Influence Service Quality on Customer Loy- the lower the loyalty of the customer. alty The results of the analysis show that Customer Sat- Based on the results of a partial analysis of this isfaction has a significant positive or direct influ- study shows that, Service Quality does not have a ence on Customer Loyalty. So it can be interpreted significant influence but has a positive direction of that, if Jiwasraya Mojokerto Branch wants to in- influence on Customer Loyalty, this can be seen crease Customer Loyalty, it is very important for from the value of the table 4.15 whose value is 1.323 Jiwasraya Mojokerto Branch to pay attention to the which means it is smaller than 1.96. Thus the fifth extent to which customers are satisfied with the hypothesis which reads "There is an influence of services provided. Service Quality on Customer Loyalty on Jiwasraya The results of this study support the findings of customers" is declared not accepted. research conducted by Naderian and Baharun The analysis shows that Service Quality has no sig- (2013) who examined the restaurant customers at nificant influence but has a positive direction of Hotel Malaysia where in their research it was found influence on Customer Loyalty as indicated by the that Customer Satisfaction had a significant influ- original sample estimate value of 0.323. The direc- ence on Customer Loyalty. Likewise, the findings tion of the positive influence that occurs shows that of Hariyanto (2014), in which his research proves there is a direct effect so that it can be interpreted if that Customer Satisfaction has a significant positive the Service Quality provided by Jiwasraya Mojok- effect on loyalty. ertjo Branch is getting better the more it will be able to increase Customer Loyalty. And vice versa, if the 5. CONCLUSION, IMPLICATION, SUGGES- Service Quality provided by Jiwasryawa to cus- TION, AND LIMITATIONS tomers is low, Customer Loyalty will also decrease Based on the discussion conducted, the conclusions further. that can be drawn are as follows: ( 1) Relationship Chakrabaraty (2006) argues that service quality Marketing has a significant influence on Service after sales can encourage the creation of Customer Quality, thus the first hypothesis is accepted and Loyalty, positive WOM, resale and cross-selling. proven to be true; (2) Relationship Marketing has a The results in this finding do not support the re- significant influence on Customer Satisfaction, thus sults of Kipu's (2013) research which found that the second hypothesis is declared accepted and Service Quality influences customer loyalty at Ma- proven true; (3) Relationship Marketing has no tahari Department Store. The results in this study significant influence on Customer Loyalty, thus the 167 third hypothesis is declared unacceptable and Naderian. A, Baharun. Rohaizat. (2013). “Rela- unproven; (4) Service Quality has a significant tionship Marketing, Customer Satisfaction influence on Customer Satisfaction, thus the fourth and Loyalty Association Moderating by hypothesis is declared accepted and proven true; Switching Cost”. Archives Des Sciences. 66, (5); (5) Service Quality has no significant influence on May 2013. Customer Loyalty, thus the fifth hypothesis is Nelson Oly Ndubisi, 2007 “Relationship market- declared unacceptable and unproven; (6) Customer ing and customer loyalty”, Marketing Intelli- Satisfaction has a significant influence on Customer gence & Planning, Vol. 25 Issue: 1, pp.98- Loyalty, thus the sixth hypothesis is accepted and 106, proven to be true. Parasuraman, A., V.A., Zeithml dan L.L., Berry., Based on the analysis conducted, suggestions can 1998, SERVQUAL : A Multiple Item Scale for be given as follows: (1) It is expected that Jiwasraya Meansuring Consumer Perseption of Service in Mojokerto Branch can improve its Relationship Quality, Jurnal of Retailing. hal 64. Marketing by providing attractive promos / prizes; Payne, A., Christopher, M., Clark, M., & Peck, H. (2) It is expected that Jiwasraya in the Mojokerto (1995) Relationship marketing- key concepts. Branch will further improve Service Quality by Relationship marketing for competitive ad- instilling trust in policyholders and ensuring that vantage: Winning and keeping customers. Ox- employees look neat; (3) It is hoped that further ford: Butterworth. research can add other variables that can have an Qureshi, N. Z., dan J. A. Bhat. (2015). “An Assess- effect on increasing Customer Satisfaction and ment of Service Quality, Customer Satisfaction Customer Loyalty so that it can obtain maximum and Customer Loyalty in Life Insurance Cor- results. poration of India with Special Reference to Srinagar District of Jammu and Kashmir “. Pa- In general, Jiwasraya customers are served by cific Business Review International. 7 (8) : 60-70. agents so that very few customers come to the of- Sanusi, A. (2011). Metode Penelitian Bisnis, Jakarta : fice so that they need money and time to collect the Salemba Empat. questionnaire.The number of samples in the study Sekaran, U., dan R. Bougie. (2016). Research Methods conducted is limited to 100 customers so that it is for Business. Edisi Ketujuh. United Kingdom: not enough overall customer characteristics John Wiley & Sons. Tatik. S. (2013). Perilaku Konsumen di Era Internet. Yogyakarta: Graha. Ilmu. References Tjiptono. F. (2011). Service Management Mewujudkan Dick, A.S. and Basu, K. 1994. Customer Loyalty Layanan Prima. Edisi. 2. Yogyakarta: Andi. Toward an Integrated Conceptual Framework. Tsu-Wei Yu dan Feng-Cheng Tung. (2013). “Inves- Journal of the Academy of Marketing Science, 22, tigating effects of relationship marketing types 99-113. in life insurers in Taiwan”. Managing Service Ferdinand, A. 2002. Structural Equation Modelling Qulity. 23 (2) : l11-130. dalam Penelitian. Manajemen. Semarang : FE Whyatt, G., dan R. Koschek. (2010). Implementing UNDIP. relationship marketing: Supermarkets' per- Ghozali, I. 2014. Structural Equation Modeling, spectives. Article in Marketing Intelligence & Metode Alternatif dengan. Partial Least Square Planning 28 (5):582-599. (PLS). Edisi 4. Semarang : Badan Penerbit Uni- Zineldin, M. (2006). The royalty of loyalty: CRM, versitas. quality and retention.Journal of Consumer Mar- Gronroos, C., 1994. “From marketing mix to rela- keting, 23(7), 430-437. tionship marketing – towards a paradigm shift in marketing”, Australian Marketing Journal, vol. 2, pp. 9-29. Kipu, M. S. 2013. Relationship Marketing Dan Ser- vice Quality Pengaruhnya Terhadap Loyalitas Pelanggan Di Matahari Departement Store Manado. Jurnal EMBA 1 (3) : 357-364. Kotler, P., and K. L. Keller. 2012. Marketing Man- agement 13. New Jersey: Pearson Prentice Hall, Inc. 168 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings Value Effect in Reputation Perception of Customer Citizenship Behavior (CCB) With Student Satisfaction Mediation in Educational: Education Service Private Higher in Surabaya Adi Prasetyo, Tatik Suryani, and Tjahjani Prawitowati 1 STIE Perbanas Surabaya, Nginden Semolo 34-36 Street, Sukolilo, Surabaya, 60118, East Java, Indonesia 2 STIE Perbanas Surabaya, Nginden Semolo 34-36 Street, Sukolilo, Surabaya, 60118, East Java, Indonesia 3 STIE Perbanas Surabaya, Nginden Semolo 34-36 Street, Sukolilo, Surabaya, 60118, East Java, Indonesia ARTICLE INFO ABSTRACT Article history: Received Recently competition in higher education become more intensive. Every Higher Revised Education should be formulated marketing strategy implementation efficiently, not Accepted by using advertising or personal selling, but by using utilizing customer for promotion. Customer Citizenship Behavior (CCB as voluntary customer viewer can help HR to support promotion activities. This literature review study aims to develop conceptual framework the antecedent of CCB from corporate reputation Key words: and perceived value. Less study focused in that area especially in education service Perception of Value, Reputation, context. The review focused on private private HE in East Java. The design of this student satisfaction with Customer research using literature review for many theory and previously research. The Citizenship Behavior (CCB). result found proposition that : perceived values have positive effect on customer satisfaction (students) and CCB, Corporate Reputation (HE) has positive effect on DOI: 10.6084/m9.figshare.9847625 customer satisfaction and CCB. The last proposition, customer satisfaction as mediating variable the relationship between perceived value with CCN and Corporate Reputation with CCB. 1. Introduction students, but for PTS it has to struggle to get At present the university as a potential new students. business world, even now the reputation of a In the world of education competition university becomes very important and becomes between campuses is increasingly competitive, to be the main capital for business developers in the field able to gain trust from the public. The reputation of of education. A good reputation reflects the quality Private Universities that have a accreditation can of the university. But this is not an easy matter for influence the perception of their own values for every tertiary institution to develop its higher prospective students. Moreover, the competition education institutions in Indonesia, given the between leading private universities in Surabaya increasingly intense competition with other was chosen after failing to take the state university universities. Amanah, et al. (2017). entrance examination. Competition in the education services Based on the background above, the sector among universities, especially private researcher was interested in examining the universities (PTS) in fighting for the "market" of influence of perceived value and reputation on students is quite heavy. Universities in Indonesia consumer behavior, at four private universities in are currently flourishing like mushrooms in the Surabaya namely University of Surabaya, rainy season (Gunarto, 2016). The number of University of August 17, 1945, STIE Perbanas tertiary institutions in Indonesia has now reached Surabaya, and University of Widya Mandala 3,193 consisting of 121 State Universities (PTN) and Surabaya, so that this study was given the title PTS with a total of 6,749,825 students (PTN = "Effect Of Value And Reputation Perception On 2,224,718 and PTS = 4,525,107) (Ristekdikti, 2015). Customer Citizenship Behavior (CCb) With Student Until now no PTN has experienced a shortage of Satisfaction Mediation In Private Higher Education * Corresponding author, email address: [email protected] Services In Surabaya". a. Students have a perception that their colleges Based on that background, the authors for-mulate have reliable quality. the problem as follows: b. Students feel comfortable and enjoy studying 1. Does Value Perception Have A Significant Effect here. On Customer Citizenship Behavior (Ccb) On c. For students, the tuition fees at the tertiary Private University Students In Surabaya? institution are cheap and affordable. 2. Does reputation have a significant effect on d. Students choose the college because it is better customer citizenship behavior (ccb) for private than other universities. tertiary students in Surabaya? 3. Does value perception significantly influence As explained by Cheng et al. (2016: 265) satisfaction on students of private universities in above, that perceived value affects the behavior of Surabaya? customers to behave outside their duties as 4. Does reputation have a significantly effect on customers. Value perception is an overall customer student satisfaction in private universities in evaluation of what is received and given. Surabaya? Customers will show behavior that leads to an 5. Does student satisfaction have a significant increase in the contribution of positive interactions effect on ccb of private tertiary institutions in with other consumers. So it can be said if consumers Surabaya? already feel the positive value of a service will show 6. Does the perception of value significantly customer citizenship behavior to others. The results influence the ccb of private universities in of research by Cheng et al. (2016) show that Surabaya through student satisfaction? perceived value affects customer behavior to 7. Does reputation have a significantly effect on ccb behave outside their duties as customers or can also of private universities in Surabaya through be said to affect Customer Citizenship Behavior. student satisfaction? From this it can be concluded that the perceived value affects the increase in Customer Citizenship 2. Theoretical Framework, Literature Review, Behavior. Discussion and Hypotheses H1: Value Perception has a significant effect on CCB in private tertiary students in Surabaya. Value Perception According to Suryani (2013: 75) perception Value perception is a comprehensive is a psychological process in which individuals assessment by consumers of the usefulness of a choose, organize, and interpret stimuli into product or service based on perceptions about what something meaningful. Stimuli are all things related is received by consumers. This is supported by to the senses and can give rise to perceptions of research Sharma et al. (2015: 13) that value various forms. perception has a positive effect on customer While according to Babakhani (2015) the satisfaction and what is felt by consumers perception of value can be influenced by customer According to Suariedewi and Eka Sulistyawati, expectations and perceived quality, while those (2016) perceived value has a positive and significant affected are customer satisfaction, which ultimately effect on consumer satisfaction, which indicates that will have an impact on customer loyalty, trust and giving good perceived value to consumers will customer complaints. So it can be concluded from further increase consumer satisfaction. Research several explanations of the theory about the conducted by Mardikawati and Farida, (2013) perception of value above, that the perception of regarding passengers in using bus efficiency shows value is the value or benefit that the customer feels that customer value has a positive and significant towards what he has received, including the effect on customer satisfaction. impression, hope and satisfaction of the service or H2: Value Perception has a significant effect on the product that he has bought. Every company or satisfaction of students of private tertiary university must create superior customer value, so institutions in Surabaya that the perception of customer value for a product or service is high. Reputation Measurement of the variable of perceived Reputation is a value given to individuals, value in the research of Jui-Chang Cheng, She Juang institutions or countries. Reputation cannot be Luo, Chang-Hua Yen & Ya-Fang Yang, (2016), the obtained in a short time because it has to be built up indicators used to measure this variable are: for years to produce something that can be valued 170 by the public. A reputation is basically a good name image (Fombrun & Riel, 1997). judged by external and internal parties. According to Davies, Chun, Silva and Roper, (2003) According to Gaotsi and Wilson (2011), all organizational actions from the past can build said: "Reputation is the evaluation of all reputations, activities related to stakeholders about stakeholders of the organization at all times based the image of the organization, and predict the on the experience of these stakeholders with the possibility of future market activities and strategies. organization." The results of research from Nguyen Thi Van, Tran A reputation for an organization is an Thi Hue Chi, Vu Thi Mai Chi & Ngo Van Quang, invisible vital asset, when properly managed, (2016), show the company's reputation has an effect reputation can enhance an organization's ability to on "Customer Citizenship Behavior", even though sell its products and services, attract investors, hire the effect is not high. talented workers and anticipate the influence of the H4: Reputation influences the satisfaction of surrounding political situation. A good reputation students of private universities in Surabaya will bring many benefits and advantages whereas a bad reputation can bring down an organization. Satisfaction Amanah, Wibowo, Gaffar, Hurriyati dan Harahap, According to Wu and Huang (2013: 73) (2017: 1). satisfaction is a service that customers get when Reputation variables in the study (Nguyen shopping the same or even more than what was Thi Van, Tran Thi Hue Chi, Vu Thi Mai Chi & Ngo expected by previous customers. Van Quang 2016), the indicators used to measure According to Kotler & Keller, (2015: 131) this variable are: satisfaction is the feeling of being happy or a. Students have an orientation that their college has disappointed someone who appears after a good reputation comparing expected performance against b. Students feel confident that their colleges are able expectations. to produce the best graduates. Kotler, (2014: 150) also explains that c. For Students the cost of Education in Higher customer satisfaction is a feeling of pleasure or Education is affordable and superior. disappointment that arises after comparing the d. Students feel that the quality of service provided performance (results) of the product that is thought to students is good. of the expected performance (or results). e. College students also have good social care for Satisfaction is an important point of circulation in a their environment business, even customer satisfaction really According to Suryani, (2013) consumers determines the success or failure of a business, even generally have a positive perception of the pioneer customer satisfaction greatly determines the success brand or the first brand in one product category, or failure of a business. even though the next brand appears. Therefore, Customer satisfaction variables in the study efforts to improve the reputation or image of the (Estelle van Tonder and Leon T. de Beer, 2018), company are very important. indicators used to measure this variable are: In a study conducted by Akto, (2015) stated a. Students always feel happy with the services that the reputation of higher education had a provided by the College. positive and significant effect on student b. Overall students are satisfied with the services satisfaction received. This shows that higher provided by the College. education reputation indicators consisting of a good c. The student's decision when deciding to use the feeling towards the institution, a feeling of trust in services provided by the college is correct. the institution, a feeling of admiration for the Customer satisfaction can be interpreted as institution and a good reputation as a whole, can meeting the needs, desires, goals after consuming or increase student satisfaction. Thus the higher the using a product or service (Oliver, 2010 in reputation of the college, the effect on student Weisheng Chiu, Sunyun Shin & Hyun-Woo Lee, satisfaction. 2017). When the customer is satisfied with the H3: Reputation has a significant effect on CCB in services provided, the customer will assist the private university students in Surabaya. company in carrying out its duties, such as helping The company's reputation is related to the offer to others, recommending products to the public or the public who know about a company, theme, returning items that have fallen to the floor. can not judge about the organization through social Customer satisfaction refers to the extent to which phenomena that the organization tries to build its customer expectations of a product or service 171 provided by the company, have been in line with or customer (Zeithaml, 1988 in Weisheng Chiu, even exceeded the expectations made by the Sunyun Shin & Hyun-Woo Lee, 2017). Research customer. The higher customer satisfaction, the results from Cheng et al. (2016) shows that customer will show voluntary behavior to provide perceived value influences Customer Citizenship useful information to other customers, where the Behavior. So it can be interpreted that the higher behavior is considered important for the success of perceived value perceived by customers will a company (Yi, Gong, & Lee, 2013). encourage the emergence of voluntary customer H5: Student satisfaction significantly influences behavior to actively participate in providing the CCB of private universities in Surabaya. information and other behaviors that benefit the company. Thus, the perception of high value will Customer Citizenship Behavior (CCB) also cause customers to feel satisfied, namely According to Cheng et al. (2016: 265) customers feel their expectations are exceeded by Customer Citizenship Behavior (CCB) is the the quality of the product and the quality of service volunteerism of customers and customer behavior provided by the company. that is beyond their duties as a customer to the H6: The effect of perceived value on CCB of private services provided for example helping other universities in Surabaya through student customers, offering providing advice to other satisfaction customers, and providing feedback to the company. The results of research from Nguyen Thi According to Cheng et al. (2016: 269) CCB Van, Tran Thi Hue Chi, Vu Thi Mai Chi & Ngo Van can be seen from customer behavior that is Quang (2016), explain that Corporate Reputation to recommending the company to others, helping Customer Citizenship Behavior (CCB), can be customers, and providing good feedback to the influenced by three things Customer loyalty, company Bettencourt, 1997 in Cheng et al. (2016: Customer satisfaction and customer loyalty. The 265) states that Customer Citizenship Behavior quantity and direct availability of this information (CCB) is a behavior that is outside the customer's easily and often exposes company errors, so duties that is done voluntarily, such as helping managing an online community and company other customers, offering useful advice to other reputation may become more important in the customers, or providing feedback for the company. current online era than in the pre-internet era. As According to Lii & Lee (2012) Customer noted earlier, careful reputation management can Citizenship Behavior (CCB) consists of three encourage positive voluntary behavior, citizenship dimensions, namely: conveying recommendations, behavior, among customers. Doing this is also helping other customers and providing feedback to easier for customers involved online, and they can the company. After that, the customer will do further influence other potential customers. In other positive things, such as conveying good things to words, creating arrangements where the reputation other customers, buying additional services, giving and behavior of customers are well managed can advice related to product or service repairs, giving create situations where positive perceptions add recommendations to others, and showing higher further positive perceptions. Metta, Otto, (2016). price tolerance. H7: Effect of reputation on CCB private Universities Measurement of variable Customer in Surabaya through student satisfaction citizenship behavior in research studies (Estelle van Tonder and Leon T. de Beer, 2018), indicators used to measure this variable are: a. Students have said positive things about the college's services to others. b. Students have recommended their chosen college to others, such as friends, relatives or coworkers. c. Students have encouraged others to choose their colleges. d. Students have helped others who need help choosing university information. Value perception is a comprehensive assessment by the customer of the usefulness of a product or service based on the perception of what is received by the customer and what is felt by the 172 Perceived Value H1 H3 Customer Satisfaction H5 Citizenship Behavior (CCB) H4 H2 Reputation Picture 2.1 Research Framework 3. RESEARCH METHOD This study is based on the conceptual REFERENCES model of the Influence of Value Perception and Cheng, Jui-chang, She-juang Luo, Chang-hua Yen, Reputation of Customer Citizenship Behavior and Ya-fang Yang. 2016. “Brand (CCB) in Private Higher Education Services in Attachment and Customer Citizenship Surabaya through Student Satisfaction. According Behaviors.” The Service Industries Journal. to previous literature, researchers have found 36(530): 263–77. several factors that influence Customer Citizenship Dong Hong Zhu, Hui Sun, Ya Ping Chang. 2016. Behavior (CCB). Reference is taken from the study Effect of social support on customer of several marketing books and journals. Therefore, satisfaction and citizenship behavior in to understand the factors that influence the online brand communities: The moderating Customer Citizenship Behavior (CCB) as seen from role of support source. Journal of Retailing the benefits, secondary data is collected, compared and Consumer Services 31 287–293. and analyzed. Helm S., Liehr-Gobbers K. & Storck C. 2011. Reputation Management. New York; Springer 4. SUMMARY Heidelberg Dordrecht. In this study explained that the benefits for Kotler, P., & Keller, K. L., 2015. Marketing Perception of Value and Reputation of Customer Management. Fifteen Edition, New York : Citizenship Behavior (CCB) in Private Higher Pearson Education. Education Services in Surabaya Through Student Kotler, Philip dan Gary amstrong. 2014 Principle of Satisfaction is to improve the ability to analyze the Marketing. 15th edition, New Jersey:Pearson effect of perceived value and reputation on CCB by Prentice Hall. mediating customer satisfaction in choosing private Leon T. de Beer dan Estelle van Tonder. 2018. New tertiary institutions in Surabaya. For private Perspectives On The Role Of Customer universities in Surabaya to determine the effect of Satisfaction And Commitment In perceived value and reputation on CCB by Promoting Customer Citizenship Behaviors. mediating customer satisfaction in choosing a South African Journal of Economic and private university in Surabaya. Management Sciences, page 1-11. Lii, Y.S., & Lee, M. 2012. Doing right leads to doing well: When the type of CSR and reputation interact to affect consumer evaluastions of the firm. Journal of Business Ethics, 105 (1), 69-81. Lovelock, C.H., J. Wirtz. 2011. Service Marketing : People, technology, strategy. Sixth Edition. USA: Prentice Hall. 173 Mazzarol, T., & Soutar, G. N. 2012. Revisiting the global market for higher education. Asia Pacific Journal of Marketing and Logistics, 24(5), 717–737. https://doi.org/10.1108/1355585121127807 9 Metta, Otto, 2016. Effects Of Company Reputation On Commitment, Loyalty, And Identification, And Their Respective Influence On Customer Citizenship Behaviours. University of Jyväskylä School of Business and Economics. Master’s thesis Ramesh Neupane. (2015). The Effect of Brand Image On Customer Satisfaction and Loyalty Intention In Retail Super Market Chain UK. Int. J. Soc. Sci. Manage. Volume-2, issue-1: 9-26. Sharma, Pratyush Nindhi. 2015. “Cross-National Differences in Consumer Satisfaction: Mobile Developed Markets.”Journal of International Marketing. 23 (2): 1-24. Sugiyono. 2012. Metode Penelitian Bisnis. Bandung: Alfabeta. Tatik Suryani. 2013. Perilaku Konsumen Di Era Internet. Edisi pertama. Yogyakarta: Graha Ilmu Wu, Ing-long, and Chi-ying Huang. 2015. “Analysing Complaint Intentions in Online Shopping : The Antecedents of Justice and Technology Use.” Behaviour & Information Technology. 34(1): 69–80. Youjae Yi. 2014. Customer Value Creation Behavior. Routledge of Taylor & Francis Group, an informa business 174 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings Analysis of the Influence of Credit Risk, Market Risk, Liquidity Risk and Operational Risk on Bank’s Financial Profitability “Regional Development Bank” S A F I I Program Pasca Sarjana Magister Management, Sekolah Tinggi Ilmu Ekonomi Perbanas Surabaya [email protected] ARTICLE INFO ABSTRACT Article history: Received This study aims to examine the influence of credit risk, market Revised risk, liquidity risk and operational risk on the financial profitability of Accepted the bank “Regional Development Bank”. This research includes causality research using a quantitative approach. The study population is the Regional Development Bank registered with the Financial Services Authority. Sampling is done by purposive Key words: sampling technique, which is based on the criteria of the bank that Credit Risk, Market Risk, Liquidity Risk, Operational Risk, publishes financial statements for 5 consecutive years starting in 2012 Profitability. until 2016. The data analysis technique used is multiple linear regression analysis. The results in this study indicate that: (1) Credit DOI: 10.6084/m9.figshare.9847733 risk does not have a significant negative influence on bank financial profitability at Regional Development Banks; (2) Market risk does not have a significant negative influence on bank financial profitability at Regional Development Banks; (3) Liquidity risk does not have a significant negative influence on bank financial profitability at Regional Development Banks; (4) Operational risk has a significant negative influence on bank financial profitability at Regional Development Banks. Keywords: Credit Risk, Market Risk, Liquidity Risk, Operational Risk, Profitability 1. INTRODUCTION through the financial profitability of banks. The Banks are the most important financial bank's financial profitability can also be used for institutions that affect the economy both micro and banking evaluation material within a certain macro. The bank is an intermediary institution that period. Financial profitability can be measured acts as a financial intermediary between the parties using financial statement analysis. Financial holding the funds with those who need funds. In performance is one tool to assess the success of a addition, banks must pay attention to the level of bank. Banking can be said to be successful if the health of the bank so that it is always maintained bank can achieve the objectives of its banking to the because banks rely on the maximum, both in the form of trust of customers in their business activities profit or market share. According to Kusumawati (Ponco, 2008). Industrial growth in Indonesia was (2012), financial performance is an analytical accompanied by increased competition between technique used to assess banking activities banks. Banking competition can be measured whether the activities carried out are going well 175 and in accordance with applicable regulations. The 2. LITERATURE REVIEW purpose of measuring the level of financial performance of banks has the aim to measure and Profitability assess the level of effectiveness and efficiency of According to Tandelilin (2001), the banks in carrying out operational activities. condition of a company will determine the amount Financial performance can be measured of profits to be received by investors. The stability using financial statement analysis. Financial ratio of financial performance is a guarantee for analysis can be used to forecast finances in the investors to get the best profit and service from the future, review existing problems and can measure company. Low profitability indicates that the level effectiveness and efficiency in banking operations. of performance of the company's management is One of the commonly used financial ratios is not good. Companies that have a loss or a low level Return on Assets (ROA). The amount of ROA of profitability will later have a bad impact from owned by banks should increase from time to time the reaction and will cause a decline in the because the higher ROA in banks, the future. performance evaluation of a company. However, not all banks experience a continuous Profitability in this study uses ROA (Return increase in ROA, this is the case for Regional on Assets). ROA is a ratio that illustrates the ability Development Banks (BPD) which have decreased of banks to generate profits. Then the ROA ratio is ROA. High and low ROA of a bank can be a number that shows the relationship between one influenced by the financial performance of element with other elements in the financial Regional Development Banks in each region. statements. Profitability according to Kasmir Because every BPD bank in an area is strongly (2008:196) is a ratio to assess the company's ability influenced by the regional policy and several other to seek profits. One way to measure the level of aspects. profitability of banks in this study is the According PBI number 13/23 / PBI / 2011 profitability ratio that is using Return on Assets article 2, Banks are required to implement Risk (ROA). ROA is the ability of bank management to Management effectively. In banking, risk obtain profit or overall profitability. management is very crucial because risk factors According to Irmawati (2014:22), this ratio that arise can be sourced from various factors, and measures the success of management in generating risk definitions are only limited to losses that arise overall profits by comparing earnings before tax in the future. Therefore, the application of risk with total assets. Profit before tax is the net profit management in banks is expected to be able to from bank operations before tax. Meanwhile, total control risks and losses that may occur. In this assets are measured by the total number of assets study, only four of the eight banking risks taken owned by the bank concerned. The greater the were able to significantly affect the performance of ROA of a bank, means the greater the level of banks, namely credit risk, market risk, liquidity benefits achieved. Conversely, the smaller the ratio risk, and operational risk. indicates the lack of ability of bank management in According to PBI number 13/23 / PBI / terms of managing assets to increase revenue or 2011, credit risk is the risk due to failure of reduce costs. ROA calculation formula according customers or other parties in fulfilling obligations to Kasmir (2008) is as follows: to the Bank in accordance with the agreement agreed. Market risk is the risk in the balance sheet Profit before tax Return on Assets = x 100% and administrative account position due to Total Assets changes in market prices, including risks in the form of changes in the value of assets that can be Credit Risk traded or leased. Liquidity Risk is the risk due to According to Ali (2006) credit risk is the risk the inability of the Bank to meet obligations due of losses suffered by banks, related to the from funding sources of cash flow and / or high possibility that at maturity, the counterparty will quality liquid assets that can be pledged, without fail to fulfill obligations to the bank. In short, credit disrupting the activities and financial condition of risk is the risk of loss for the bank because the the Bank. Operational Risk is the risk of loss caused debtor does not repay the principal (plus interest). by inadequate internal processes, internal process For example, banks experience losses as a result of failures, human errors, system failures, and / or the occurrence of bad loans. Here the debtor external events that affect the Bank's operations. cannot repay the loan and does not pay off the loan interest. This can happen to a loan portfolio as a result of not repaying the principal loan. For most 176 banks, the portion of losses incurred by credit risk off-balace sheets) arising from market price is the biggest element of loss risk because the movements. According to the Indonesian Bankers margin received by banks in lending activities is Association (2015) market risk is the risk of price relatively small. Meanwhile, the possible risk of changes in balance sheet and administrative losses suffered by banks following the occurrence account positions including derivative of credit risk is very large. Thus, credit risk is the transactions, due to overall changes and market element that has the fastest potential in reducing conditions, including the risk of changes in option bank capital. prices. Market risks include, among others, bank According to the Indonesian Bankers functional activities such as treasury activities Association (2015), credit risk is the risk due to the (tranding books) and investment activities in the failure of the debtor and / or other parties in form of securities, including credit books (banking fulfilling the obligation to pay off credit to the books). bank. In lending activities, both commercial loans Market risk is the risk of market price and consumer loans, there is a possibility that the changes in portfolio positions and administrative debtor cannot fulfill obligations to the bank due to accounts, including derivative transactions. Price reasons, such as business failure, because the changes occur due to changes in market factors, character of the debtor does not have the good faith including the risk of changes in option prices. to fulfill obligations to the bank, or indeed there is Market factors mean exchange rates, interest rates, a mistake from the bank in the credit approval stock prices, and commodity prices. The ratio that process. can be used is the Internal Rate of Return (IRR) is a According to the Indonesian Bankers guideline value that is identical to how much Association (2015) credit risk can come from a interest rates that can be generated by these variety of bank functional activities, such as credit investments compared with bank rates that are activities and treasury activities. In treasury generally accepted (market interest rates or activities, for example banks buy corporate bonds, Minimum Attractive Rate of Return / MARR). invest in securities, trade finance, whether How to calculate IRR is used to determine recorded in a banking book or in a trading book. whether an investment is carried out or not, Credit risk accepted by banks is one of the business usually used a reference if the investment must be risks of banks, which results from non-repayment higher than the Minimum acceptable rate of return of loans given by banks to debtors. In this study the or the Minimum Attractive rate of return. In the NPL ratio is used to show the ability of bank IRR interest rate an NPV = 0, or commonly referred management to manage problem loans provided to as an IRR, implies an interest rate that can be by the bank. NPL is a ratio that is used to measure given an investment, which gives an NPV = 0. The the extent to which existing problem loans can be main requirement is if IRR> MARR interest rates. met with productive assets owned by a bank According to SE BI No 13/24 / DPNP / 2011 (Riyadi, 2006). The NPL can be formulated as formula used as follows: follows: 푅푆퐴 ( 푅푎푡푒 푆푒푛푠푖푡푖푣푒 퐴푠푠푒푡푠) 퐼푅푅 = 푥 100% 푅푆퐿 ( 푅푎푡푒 푆푒푛푠푖푡푖푣푒 퐿푖푎푏푖푙푖푡푖푒푠) Problem Loans NPL = x 100% Total Credit Market Risk Liquidity Risk According to Ali (2006), market risk is the According to Hanafi (2012) liquidity risk risk of losses suffered by banks, as reflected in, occurs when companies have difficulty paying among others, on and off balance sheet positions short-term obligations. If liquidity risks are not (balance sheets and administrative accounts). The handled properly, these risks can increase to loss arises as a result of changes in the market price solvency risk, which results in bankruptcy of the of the bank's assets and liabilities. The price change company. Compared to other business sectors, is a result of changes in market factors. Market banks face greater liquidity risk. Liquidity risk is factors are bank interest rates, currency exchange briefly the company's ability to meet its short-term rates, stock market prices, and securities and obligations or the ability of a person or company to commodities. meet obligations or debt that must be paid According to Idroes and Sugiarto (2006) immediately with current assets. Loan to Deposit market risk is defined as the risk of loss in the Ratio (LDR) is the ratio between the size of the balance sheet position and the recording of bills entire volume of credit extended by banks and the and liabilities outside the balance sheet (on-and- amount of funds received from various sources. 177 LDR is a traditional measurement that shows time (BOPO) shows the efficiency of a bank in running deposits, current accounts, savings, etc. that are its main business, especially credit, based on the used in fulfilling customers' loan requests. This amount of funds collected. In collecting funds, ratio is used to measure the level of liquidity. A especially public funds (third party funds), costs high ratio shows that a bank lends all of its funds other than interest costs (including advertising (loan-up) or is relatively illiquid. costs) are required. Until now, the income of banks Conversely, a low ratio shows a liquid bank in Indonesia is still dominated by credit interest with excess capacity of funds that are ready to income. The formula of BOPO is as follows: lend. LDR is also called the ratio of credit to total third party funds used to measure third party Operational Costs (Expenses) BOPO = x 100% funds channeled in the form of credit. According Operating Income to SE BI Number 13/24 / DPNP / 2011, the LDR formula can be calculated by: Relationship between Concepts Total Credit LDR = x 100% Influence of Credit Risk on Bank Profitability Third Party Funds Credit risk includes credit risk due to the Operational Risk failure of the debtor to pay obligations to the bank, According to Ali (2006), operational risk is risk due to the failure of counterparties the risk of loss to the bank caused by inadequate or (counterparty credit risk) to fulfill obligations, for failed processes in bank management, human example in derivative contract agreements, and resources, and systems. The risk of loss can also credit risk due to failure of the payment process occur as a result of factors outside the bank. (settlement risk), for example in foreign exchange Operational risk is basically bound to a number of sale and purchase agreements. The ratio used is problems stemming from failures in the bank's NPL or Non Performing Loans is one indicator of internal management processes. According to the the health of the quality of bank assets. The Indonesian Bankers Association (2015), indicator is the principal financial ratio that can operational risk is the risk due to inadequate and / provide information on the assessment of capital or malfunctioning of internal processes due to the conditions, profitability, credit risk, market risk absence or dysfunction of work procedures, and liquidation. human error, system failures, and / or external In a previous study, Million Gizaw (2015) events that affect bank operations. According to showed a significant negative effect on the Indonesian Bankers Association (2015) profitability with a sig rate of 0%. This is also operational risks faced by all banks and become the supported by research by Didik Purwoko and root cause of other potential risks such as credit Bambang Sudiyatno (2013) and Yuga Raj Bhattarai risk and market risk. Therefore, it is very important (2016). The higher the NPL ratio, the worse the to know the factors that cause operational risk so quality of credit that causes the number of that banks can make work plans to manage these problem loans is greater so that it can lead to the risks. possibility of a bank in a greater problematic Then operational risk is the risk arising from condition. So in this case the higher the NPL ratio operational processes either because it incurs more will negatively influence ROA. operational costs or inaccuracies so that there is a Influence of Market Risk on Bank Profitability possibility of loss. BOPO is a ratio of the ratio of Market risk is the risk of market price Operating Costs to Operating Income, the lower changes in portfolio positions and administrative the level of this ratio, means the better the bank's accounts, including derivative transactions. Price management performance, because it is more changes occur due to changes in market factors, efficient in using existing resources in the including the risk of changes in option prices. company. Operating Costs to Operating Income Market factors are the exchange rate, interest rates, (BOPO) aims to measure the level of efficiency and stock prices, and commodity prices. The ratio that the ability of banks to carry out their operations. can be used is the Internal Rate of Return (IRR) is a Considering that the main activities of banks are as guideline value that is identical to how much intermediaries, namely collecting and distributing interest rates that can be generated by these funds, the costs and operating income of banks are investments compared with bank rates that are dominated by interest costs and interest income. generally accepted (market interest rates or The ratio of Operating Costs to Operating Income Minimum Attractive Rate of Return / MARR). 178 In a previous study by Muhammad Fahrul costs are used to measure the level of efficiency Rozi Syafi'i (2016) which showed market risk had and ability of banks to carry out operational a positive effect on profitability with a sig rate of activities. The more efficient the banking system is 1.7%. This is because an increased market risk will in operating it will affect the increase in the bank's make changes in high market prices (exchange profitability, so that profits increase. rates, interest rates) will increase the revenue The smaller the BOPO shows the more generated. The greater income generated will efficient the bank is in carrying out its business increase the total bank revenue, so that profits activities so the better the bank is. In other words, increase. Increased profits will make profitability the BOPO ratio has a negative influence on ROA. increase, and bank profitability will increase. This is supported by previous research on behalf of Didik Purwoko and Bambang Sudiyatno (2013), Influence of Liquidity Risk on Bank Profitability which shows that BOPO has a negative effect on Liquidity risk occurs when a company has bank profitability. difficulty paying short-term obligations. If liquidity risks are not handled properly, these risks Framework can escalate into solvency risks, which result in company bankruptcy. The ratio used is the LDR Credit Risk (NPL) (Loan to Deposits Ratio), which is a ratio that measures the ability of banks to meet short-term liabilities (can be called liquidity) by dividing total H1 (-) loans to total Third Party Funds (DPK). Banking liquidity needs to be managed to meet the needs Market Risk (IRR) H2 when customers take their funds and distribute (+) loans (credit) to borrowers (debtors). If the LDR Profitability (ROA) value is too high, it means that the bank does not H3 have sufficient liquidity to cover its obligations to (+) customers (DPK). Liquidity Risk Conversely, if the LDR value is too low, it (LDR) means the bank has sufficient liquidity but may have lower income, because as is known by the H4 (-) banking world. LDR reflects the ability of banks to repay withdrawals of funds by relying on loans. Operational Risk (BOPO) The higher the LDR, the better the company, because the higher this ratio means the number of loans increased so that interest income and profits Figure 1 Framework increase. In other words the LDR ratio has a Research Hypothesis positive influence on ROA. This is supported by Based on the description of empirical previous research from Muhammad Fahrul Rozi studies and theoretical studies, the hypotheses in Syafi'i (2016) and Mohammad Morsh Procedure this study can be described as many as four Rahman, et al (2015) which shows LDR has a hypotheses, namely: positive effect on bank profitability. H1 : Credit risk has a significant Influence of Operational Risk on Bank negative influence on bank Profitability profitability at Regional Operational risk is the risk arising from Development Banks in Indonesia. operational processes either due to incurring more H2 : Market risk has a significant costs or inaccurate operations so that there is a positive influence on bank possibility of loss. The ratio used is BOPO profitability at Regional (Operating Expenditures to Operating Income) Development Banks in Indonesia. which is a ratio that illustrates the efficiency of H3 : Liquidity risk has a significant banks in conducting their activities. Operational positive influence on bank expenditure is interest expense given to customers profitability at Regional while operating income is interest earned from Development Banks in Indonesia. customers. The smaller the value of BOPO means H4 : Operational risk has a significant more efficient banking in operating. Operational negative influence on bank 179 profitability at Regional using Multiple Regression analysis accompanied Development Banks in Indonesia. by a classic assumption test. 3. RESEARCH METHODS 4. RESEARCH ANALYSIS AND DISCUSSION Research Design Based on the data source used, this Multiple Linear Regression Equations research can be classified as research using Multiple linear regression analysis is used to secondary data. Based on the method of analysis, measure how much influence each independent this research can be said to be a quantitative variable (x) has on the dependent variable (y). research method because it uses a numerical scale. Table 1 Results of Multiple Linear Regression Based on the type of data, this study is archival Analysis research. This research can be classified based on Standardized its purpose as a casual research study. Unstandardized Coefficients Model Coefficients tcount Sig B Std.Error Beta Constant 10.788 0.657 16.410 0.000 Credit Risk 0.031 0.027 0.049 1.164 0.247 Population and Sampling Techniques Market Risk -0.002 0.005 -0.018 -0.386 0.700 Liquidity Risk 0.004 0.006 0.030 0.642 0.522 In this study, the population that was used Operational Risk -0.109 0.005 -0.931 -22.223 0.000 as the object of research was the Regional Development Bank registered with the Financial Based on the results of the statistical output Services Authority. The sampling technique in this in Table 1 above, the regression regression study was conducted by purposive sampling with equation can be formulated as follows: the following criteria: Regional Development ROA = 10.788 + 0.031 NPL – 0.002 IRR + 0.004 Banks that publish financial statements for 5 LDR – 0.109 BOPO consecutive years from 2012 to 2016. The interpretation of the above model is as follows : Data and Data Collection Methods a. The amount of the constant value ( ) = By reviewing its nature, the type of data 0 used is quantitative data and secondary data in the 10.788 shows the amount of bank financial form of financial ratios of regional development profitability (ROA) when there is no banks in Indonesia for the period 2010-2016. The influence of credit risk (NPL), market risk data of this study are pooling data, which is a (IRR), liquidity risk (LDR), and operational combination of time series and crosssections risk (BOPO) or it can be said that the risk during the period of 2010 to 2016. While viewed value credit (NPL), market risk (IRR), from the way to obtain it, the source of the data liquidity risk (LDR), and operational risk used is secondary data from the data of the (BOPO) are zero or constant. Regional Development Bank's annual Financial b. Regression coefficient for credit risk (NPL) Statements, with criteria namely: = 0.031 shows that if credit risk (NPL) 1. This research collects data and theories increases by one unit, bank financial relevant to the problem to be examined by profitability (ROA) will increase by 0.031 conducting a literature study of literature assuming market risk (IRR), liquidity risk and other literature materials, such as (LDR), and risk operational (BOPO) is articles, journals, books, and previous constant. research. c. Regression coefficient for market risk (IRR) 2. Secondary data collection in the form of = –0.002 indicates that if market risk (IRR) annual financial reports obtained from increases by one unit, bank financial Bank Indonesia with the website profitability (ROA) will decrease by 0.002 http://www.bi.go.id, and the Financial assuming credit risk (NPL), liquidity risk Services Authority with a website (LDR), and operational risk (BOPO) is http://www.ojk.go.id. constant. d. Regression coefficient for liquidity risk Data Analysis Method (LDR) = 0.004 shows that if liquidity risk This study aims to test the significance of the (LDR) increases by one unit, bank financial factors that affect the profitability of banks by profitability (ROA) will increase by 0.004 assuming credit risk (NPL), market risk 180 (IRR), and risk operational (BOPO) is Table 3 Simultaneous Test Regression Analysis constant. (Test F) e. Regression coefficient for operational risk Sum of Mean (BOPO) = -0.109 shows that if operational Model df Fcount Sig. Squares Square risk (BOPO) increases by one unit, bank Regression 304.937 4 76.234 148.780 0.000 financial profitability (ROA) will decrease Residual 61.488 120 0.512 by 0.109 assuming credit risk (NPL), Total 366.425 124 market risk (IRR), and liquidity risk (LDR) is constant. Testing steps: Correlation Coefficient and Determination 1. H0 : 1 = 2 = 3 = 4 = 0 Coefficient Means, independent variables (X1, X2, X3, X4) simultaneously has an insignificant Table 2 Correlation Coefficient and influence on dependent variable. Determination Coefficient H1 : 1 ≠ 2 ≠ 3 ≠ 4 ≠ 0 Means, independent variables (X1, X2, X3, R R Square Adjusted R Std.Error of the X4) simultaneously has an significant Square Estimate influence on dependent variable. 0.912 0.832 0.827 0.71582 2. If the significance value of the F test sig < 0.05, then H0 is rejected and H1 is Based on table 2 above, it can be seen the accepted. influence between credit risk (NPL), market risk Based on Table 3 the significance value is (IRR), liquidity risk (LDR), and operational risk 0,000 or <0.05. This shows that H0 is rejected and (BOPO) on profitability. From the table above it is H1 is accepted. So that the credit risk free variable known that the R that shows the correlation (NPL), market risk (IRR), liquidity risk (LDR), and number is 0.912, which means the influence operational risk (BOPO) have a significant between credit risk (NPL), market risk (IRR), simultaneous influence on the financial liquidity risk (LDR), and operational risk (BOPO) profitability of banks Regional Development on profitability is very strong with measurement Banks. parameters a correlation value of more than 0.8-1. Then from the table above can also be seen the b. Partial Test (t Test) magnitude of the R-Square determination Then to test the influence of each variable coefficient value of 0.832, which shows the partially used a t test that can show the partial percentage of profitability can be predicted / influence of each independent variable on the explained by each variable free of credit risk (NPL), dependent variable: market risk (IRR), liquidity risk (LDR), and Table 4 Partial Test Regression Analysis (t Test) operational risk (BOPO). From table 2 above it can be concluded that the four variables free of credit risk (NPL), market risk (IRR), liquidity risk (LDR), Model tcount Sig and operational risk (BOPO) can explain the dependent variable namely profitability of 83.2 Constant 16.410 0.000 Credit Risk 1.164 0.247 percent. Market Risk -0.386 0.700 Liquidity Risk 0.642 0.522 Operational Risk -22.223 0.000 Hypothesis Testing a. Simultaneous Test (F Test) Furthermore, to examine the influence simultaneously of credit risk variables (NPL), 1. Partial test of credit risk variables (NPLs) on market risk (IRR), liquidity risk (LDR), and bank financial profitability(ROA). operational risk (BOPO) on bank financial Based on Table 4, the test results are as follows: profitability (ROA), a F test. Then based on the F a. H0 : 1 = 0 test results according to calculations using SPSS Means, credit risk variable (NPL) has no software assistance can be seen in the appendix as significant influence on bank financial in the following table: profitability (ROA) H1 : 1 0 181 Means, credit risk variable (NPL) has a 4. Partial test of operational risk variables significant influence on bank financial (BOPO) on bank financial profitability (ROA). profitability (ROA) Based on Table 4, the test results are as follows: b. = 0,05 with df (n - k - 1) = 120 a. H0 : 4 = 0 c. ttable = 1.9799 Means, Operational risk variable (BOPO) d. tcount = 1.164 does not have a significant influence on Based on Table 4, the tcount is 1,164 and the bank financial profitability (ROA) significant value is 0.247. Because tcount < ttable H1 : 4 0 and significant value> 0.05, this means that Means, Operational risk variable (BOPO) credit risk (NPL) partially has no significant has a significant influence on bank influence on profitability, so the proposed financial profitability (ROA) hypothesis is not proven true. b. = 0,05 with df (n - k - 1) = 120 c. ttable = 1.9799 2. Partial test of market risk variables (IRR) on d. tcount = -22.223 bank financial profitability (ROA). Based on Table 4, the tcount is -22,223 and Based on Table 4, the test results are as follows: the significant value is 0,000. Because tcount > a. H0 : 2 = 0 ttable and significant value < 0.05, this means Means, market risk variables (IRR) do not that operational risk (BOPO) partially has a have a significant influence on bank significant influence on profitability, so the financial profitability (ROA) proposed hypothesis is verified. H1 : 2 0 Means, market risk variable (IRR) has a Discussion significant influence on bank financial Based on the results of the F test or profitability (ROA) simultaneous testing, the results are obtained that b. = 0,05 with df (n - k - 1) = 120 simultaneous credit risk (NPL), market risk (IRR), c. ttable = 1.9799 liquidity risk (LDR), and operational risk (BOPO) d. tcount = -0.386 have a significant influence on profitability (ROA) Based on Table 4, the tcount is -0.386 and the on BPD. This can be proven from the value of Sig. significant value is 0.700. Because tcount Indonesia" is rejected. This result is contrary to the Mohammad Morsh Procedure Rahman, et al (2015) results of the Million Gizaw (2015) study where the which shows that the LDR has a positive effect on NPL ratio has a significant negative influence on bank profitability. profitability. This also contradicts the research of The test results for the operational risk Didik Purwoko and Bambang Sudiyatno (2013) variable (BOPO), partially operational risk (BOPO) and Yuga Raj Bhattarai (2016) which states that the has a significant and negative effect on higher the NPL ratio, the worse the quality of profitability. Thus the fourth research hypothesis credit which causes the amount of problem loans which reads "Operational risk has a significant is greater so that it can lead to the possibility of a negative effect on bank profitability at Regional bank in problematic conditions the greater it is. Development Banks in Indonesia" is accepted. An Partially by using t-test statistics, there is an increase in BOPO will reduce the value of insignificant negative influence of market risk profitability. BOPO is a comparison between (IRR) on bank financial profitability (ROA). This operating costs and operating income. BOPO means that in this study the higher the market risk measures the ability of banks to utilize their funds (IRR) of a company is not a benchmark for the and the costs incurred to operate these funds. The success of bank management to share high ROA. increase in BOPO will reflect the lack of ability of In theory, the IRR is calculated from the banks to reduce their operational costs, which can comparison value between IRSA (Interest Rate result in losses for banks because they are less Risk) and IRSL (Interest Rate Sensitivity Liability). efficient in managing their business. So it was The direction of the market risk variable (IRR) concluded that the increasing BOPO, the coefficient is negative, meaning that the higher the decreasing Profitability (ROA) in BPD. The results IRR, the smaller the bank's profit. Thus the second of this study support the research results of Didik hypothesis of the study which states "Market risk Purwoko and Bambang Sudiyatno (2013), which has a significant positive influence on bank shows that BOPO has a negative effect on bank profitability at Regional Development Banks in profitability. Indonesia" is rejected. This result is contrary to the results of research by Muhammad Fahrul Rozi Syafi'i (2016) which shows that market risk has a positive effect on profitability. This is because an 5. CONCLUSIONS AND SUGGESTIONS increased market risk will make changes in high market prices (exchange rates, interest rates) then Conclusion it will increase the revenue generated. The greater Based on the description of the results of income generated will increase the total bank research and discussion on the Analysis of the revenue, so that profits increase. Increased profits Influence of Credit Risk, Market Risk, Liquidity will make profitability increase, and bank Risk and Operational Risk on the Bank's Financial profitability will increase. Profitability in the previous chapter, the following Partially by using t-test statistics, there is an conclusions can be drawn: insignificant positive influence of liquidity risk 1. Credit risk does not have a significant (LDR) on bank financial profitability (ROA). This negative influence on the banks financial means that in this study the higher the LDR of a profitability of Regional Development Bank. company is not a benchmark for the success of 2. Market risk does not have a significant bank management to share a high ROA. In theory, negative influence on the banks financial the LDR is calculated from the ratio between the profitability of Regional Development Bank. amount of credit given and the total third party 3. Liquidity risk does not have a significant funds. The direction of the variable LDR coefficient negative influence on the banks financial is positive, meaning that the higher the Bank's profitability of Regional Development Bank. ability to repay obligations to customers who have 4. Operational risk has a significant negative invested their funds by relying on loans that have influence on the banks financial profitability been provided as a source of liquidity, the greater of Regional Development Bank. bank profits will. Thus the third hypothesis of the study which states "Liquidity risk has a significant positive influence on bank profitability at Regional Development Banks in Indonesia" is rejected. This Suggestions result is contrary to the results of the study of Suggestions that can be given by researchers Muhammad Fahrul Rozi Syafi'i (2016) and based on the results of this study are as follows: 183 1. Pay more attention to operational risks to Di Bursa Efek Indonesia. Jurnal Bisnis dan BPD profitability, because these operational Ekonomi (JBE), Vol. 20 No. 1, pp. 25 - 39. risks have an impact on profitability (ROA) on BPD. Ghozali, I. (2005). Aplikasi Analisis Multivariate 2. Pay more attention and improve the dengan program SPSS, Badan Penerbit financial condition of BPD including credit Universitas Diponegoro, Semarang. risk, market risk, liquidity risk, operational risk, because credit risk, market risk, Gizaw, M., Kebede, Matewos., dan Selvaraj, Sujata. liquidity risk, operational risk inflence BPD (2015). The Impact of Credit Risk on profitability. Profitability Performance of Commercial 3. To get good results, BPD profitability should Banks in Ethiopia. African Journal of be added by using other factor variables Business Management Vol. 9 No. 2, pp. 59- from the external side of the Commercial 66. Bank. Gujarati, Damodar N. (2006) United States Military Academy, West Point. Essentials of BIBLIOGRAPHY Econometrics. Third Edition. McGraw- Hill International Edition. Abiola, I. (2014). The Impact of Credit Risk Management on the Commercial Banks Hanafi, M. (2006). Manajemen Risiko Edisi Pertama. Performance in Nigeria. International Yogyakarta: UPP STIM YKPN Journal of Management and Sustainability, Conscientia Beam, Vol. 3 No. 5, pp. 295- Hanafi, M. (2014). Analisis Laporan Keuangan. 306. Yogyakarta: UPP STIM YKPN Alshatti, A. S. (2014). The Effect of the Liquidity Hanafi, M. (2012). Manajemen Risiko Edisi Kedua. management on Profitability in the Yogyakarta: UPP STIM YKPN. Jordanian Commercial Banks. International Journal of Business and Idroes, Ferry N dan Sugiarto, (2006). Manajemen Management, Vol. 10 No. 1, pp 62 - 71. Risiko Perbankan dalam Konteks Kesepakatan Basel dan Peraturan Bank Bank Indonesia dengan website Indonesia. Graha Ilmu: Yogyakarta. http://www.bi.go.id, dan Otoritas Jasa Keuangan dengan website Ikatan Bankir Indonesia. (2015). Manajemen http://www.ojk.go.id. Risiko 1 (Mengidentifikasi Risiko Pasar, Operasional, dan Kredit Bank). Jakarta: PT Bhattarai, Y. R. (2016). Effect of Credit Risk on the Gramedia Pustaka Utama. Performance of Nepalese Commercial Banks. NRB Economic Review. Ikatan Bankir Indonesia. (2015). Manajemen Risiko 2 (Mengidentifikasi Risiko Likuditas, Boy L., dan S. Ericson. (2007). Manajemen Aktiva Reputasi, Hukum, Kepatuhan, dan Strategik Pasiva Bank Devisa. Jakarta: PT Bank). Jakarta: PT Gramedia Pustaka GRASINDO Gramedia Widiasarana Utama. Indonesia. Ikatan Bankir Indonesia. (2015). Manajemen Risiko 3 Dhia, S., Ibrahim K. Alulis., K. Sayari. (2016). (Mengendalikan Manajemen Risiko Information Influencing Commercial Bank). Jakarta: PT Gramedia Pustaka Banks Profitability. International Journal of Utama Economics and Finance, Vol. 8 No. 6, pp. 166 - 174. Irmawati, & Sari, D. Kartika. (2014). Analisis Pengaruh Capital Adequacy Ratio, Loan Didik P., dan B. Sudiyatno. (2013). Faktor-Faktor to Deposit Ratio, dan Net Interest Margin Yang Mempengaruhi Kinerja Bank Terhadap Return On Asset Pada PT. (Studi Empirik Pada Industri Perbankan Bank Mandiri Persero Tbk Periode 2008- 184 2012. Jurnal Universitas Muhammaddiyah C75C2-DA39-47E3-AFA6- Surakarta. 0AEB03A7E4FF/21949/pbi_130112 Kasmir. (2004). Bank dan Lembaga Keuangan Ponco, B. (2008). Analisis Pengaruh CAR, NPL Lainnya. Jakarta: PT.Raja Grafindo BOPO, NIM DAN LDR Terhadap ROA Persada. Pada Perusahaan Perbankan Yang Terdaftar di BEI Periode (2004 – 2007). Kasmir. (2000). Manajemen Perbankan. Jakarta: PT Tesis Universitas Dipenogoro. Raja grafindo Persada. Rahman, M. M., K. Hamid, dan A. Mannan Khan. Kasmir. (2008). Analisis Laporan Keuangan. Jakarta: (2015). Determinants of Bank Penerbit Rajawali Pers. Profitability: Empirical Evidence from Bangladesh. International Journal of Khairunnisa. A. (2012). Pengaruh Loan To Deposit Business and Management Vol. 10 No. 8, Ratio, Biaya Operasional Per Pendapatan pp. 135-149. Operasional dan Net Interest Margin terhadap Profitabilitas Perusahaan Rahman, M.M., Hamid, K., dan Khan, A.M. (2015). Perbankan yang Terdaftar di Bursa Efek Determinants of Bank Profitability: Indonesia. Jurnal Riset Akuntansi dan Empirical Evidence from Bangladesh. Bisnis, Vol. 12 No. 2, pp. 165 - 183. International Journal of Business and Management, Vol. 10, No. 8. Kusumawati, Melia. (2012). Analisis Komparatif Kinerja Keuangan Perbankan Retnadi, Djoko. (2006). Perilaku Penyaluran Kredit Berdasarkan Metode CAMELS dan Bank. Jurnal Kajian Ekonomi. RGEC pada PT. Bank Mandiri (Persero) Tbk”. Jurnal Akuntansi Unesa. Vol. 2 No. Riyadi S. (2006). Banking Assets and Liability 2, pp. 1-22. Management, Edisi Ketiga. Jakarta. Lembaga Penerbit Fakultas Ekonomi Masyhud. A. (2006). Manajemen Risiko (Strategi Universitas Indonesia. Perbankan dan Dunia Usaha Menghadapi Tantangan Globasisasi Siamat, D. (2005). Manajemen Lembaga Keuangan, Bisnis), Jakarta : PT Raja Grafindo Kebijakan Moneter dan Perbankan. Jakarta: Persada. Fakultas Ekonomi Universitas Indonesia, edisi kesatu. Million G., Matewos K., dan S. Selvaraj. (2015). The Impact of Credit Risk on Profitability Supriyono. (2011). Akuntansi Biaya Pengumpulan Performance of Commercial Banks in Biaya dan Penentuan Harga Pokok, Buku 1 Ethiopia. African Journal Of Business Edisi 2. Yogyakarta: BPFE Management. Vol. 9 No. 2, pp. 59 - 66. Syafi’I, M. F. R., and E. Rusliati. (2016). Credit Risk, Peraturan Bank Indonesia Nomor Market Risk, Operational Risk and 13/23/PBI/2011 tentang Penerapan Liquidity Risk on Profitability of Banks Manajemen Risiko bagi Bank Umum in Indonesia. Trikonomika. Vol. 15 No. 2, Syariah dan Unit Usaha Syariah, pp. 78-88 Peraturan Bank Indonesia Nomor 5/8/PBI/2003 Tandelilin, E. (2001). Analisis Investasi dan tentang Penerapan Manajemen Risiko Manajemen Portofolio, Yogyakarta: BPFE bagi Bank Umum, Yogyakarta. Peraturan Bank Indonesia Nomor: 13/1/PBI/2011 Yudiana, F. E. (2013). Dasar-dasar Manajemen tentang Penilaian Tingkat Kesehatan Keuangan. Yogyakarta: Ombak. Bank Umum. Terpublikasikan melalui website: http://m.bi.go.id/NR/rdonlyres/DFC 185 The International Conference of Business and Banking Innovations (ICOBBI 2019) Proceedings The Influence of Service Quality, Price, Company Image to Customer Satisfaction and Customer Loyalty of Zelika Store SAMIRUDIN Program Pasca Sarjana Magister Management, Sekolah Tinggi Ilmu Ekonomi Perbanas Surabaya [email protected] ARTICLE INFO Article history: Received ABSTRACT Revised Accepted Tight competition among companies in the global economy requires companies to be at the forefront of providing satisfying services to customers. Good service and affordable prices encourage the emergence of good image of the company for the customers. This eventually influences customer and Key words: public perceptions and influences the process of repurchasing a product. This Service Quality, Price, Company study aims to examine whether there is a significant effect of service quality Image, Customer Satisfaction, on satisfaction, price on satisfaction, service quality on loyalty, price on Zelika Shop Customer Loyalty. loyalty, satisfaction on loyalty, service quality on company image, company image on loyalty, satisfaction toward Zelika store company image. The data source in this study is primary data. The sampling technique used DOI: was quota sampling with the total sample of 120 respondents. The data 10.6084/m9.figshare.10047287 analysis technique was descriptive quantitative with IBM SPSS 23 data processing. Based on the results of research and discussion, service quality and price were found to have a significant effect on satisfaction. Service quality, price, satisfaction and company image did not significantly influence loyalty. Service quality did not significantly influence the company's image. Satisfaction had a significant effect on company image. Keywords: Service Quality, Price, Company Image, Customer Satisfaction, Zelika Shop Customer Loyalty. 1. INTRODUCTION strategy in order to win the competition. The tight competition certainly brings up the question in The intense competition between companies in the customers’ mind of which building material stores global economy demands companies to be leading are better and what makes it superior. in delivering satisfactory services to customers. Since its opening five years ago,there have been Good quality of service and reasonable price affect many inputs and complaints delivered by the customer satisfaction and loyalty and encourage customers to the company. The complaints include good company image for customer so as to limited number ofemployees; customers need to influence customer perception and public and can find an employee to ask for productinformation. influence purchasing process of products and The available cashier is limited, causing long services. queue at payment point. Employees do not The retail business of building materials and remember products prices well, causing customers various other products grew rapidly in many to wait just to get an answer about the price of regions. The high competition of building goods. In addition, the distribution of goods are materials stores requires effective marketing 186 sometimes is not on time. Costumers also accumulation of messages received through complaint the absence of aftersales service. experience felt by all senses. The sales turnover of the Zelika Store has Price is the amount of money agreed upon by fluctuated. In order to win the competition, potential buyers and sellers to be exchanged for especially in Kaimana and its surroundings, find goods or services in normal business transactions out why turnover goes up and down. (Tandjung, 2004: 78). Research on service quality, price, corporate image All decisions related to prices greatly affect several on customer satisfaction and customer loyalty was aspects of a company's activities, both regarding carried out. sales activities and profit aspects to be achieved by The problems discussed in this study are the the company. influence of service quality on customer According to Kolter (1997) customer satisfaction is satisfaction and loyalty and the image of the Zelika the level of one's feelings after comparing the Store; whether prices have a significant effect on perceived performance (or outcome) compared to customer satisfaction; is there a significant his expectations. influence between price and customer satisfaction Customer satisfaction is a positive feeling, and the image of the Zelika Store on customer assessment and emotional from the customer for loyalty and whether there is a significant influence the use of the product/service when the between customer satisfaction on the image of the expectations can be achieved or a condition when Zelika Store. what is received by the customer is greater than the The purposes of this study were to analyze the expectations. effect of service quality on customer satisfaction Customer loyalty according to Tjiptono (2000: 110) and loyalty as well as the company image of Zelika is a customer commitment to a brand, store or Store customers, the effect of prices on customer supplier based on the very positive nature of long- satisfaction, the effect of price and customer term purchases. Thus, loyalty to a brand is satisfaction and company image on customer obtained due to a combination of satisfaction and loyalty and the influence of customer satisfaction complaints. Meanwhile customer satisfaction on the Zelika Store company image. comes from how much the company's performance to cause satisfaction by minimizing complaints in order to obtain long-term purchases made by customers. 2. THEORETICAL FRAMEWORK AND HYPOTHESES 2.1 Relationships between Variables According to Parasuraman, et al. (in Kaihatu, 2008) 2.1.1 Relationship between Service Quality and service quality is a comparison between perceived Customer Satisfaction. service (perception) of consumers and service HikmatulBariroh (2015) asserted that quality expected by consumers. Thus, service service quality has an influence on customer quality is to provide service excellence to achieve buying interest; when the quality of service is poor, customer desires or expectations. customer interest in buying also decreases. The quality of this serviceservice quality can be Quality of service is very close to customer interpreted as the level of customer satisfaction. satisfaction. Grönroos (in Quen, et al: 2018) shows The level of customer satisfaction can be obtained that the perception of good service quality is from a comparison of actual types of services followed by the perception of satisfaction. received by customers and types of services Normasari, Selvi et.al (2013) showed that expected by customers service quality had a significant influence on Customer Satisfaction according to Kotler et al. (in customer satisfaction. Good service quality has an Tjiptono, 2008: 169) is the level of one's feelings important meaning for the survival of the after comparing the performance (or results) that company because it can create customer he perceives compared to his expectations. satisfaction. According to Kotler (2004: 42). Company image according to Adona (2006: 107) is Customer satisfaction is a feeling of pleasure or a mental impression or a picture of a company in disappointment someone who appears after the eyes of its audience formed based on their own comparing the perception or impression of the knowledge and experience. performance or results of a product and his A corporate image is a brief description of an expectations. organization or company created through the 187 H1 : Service quality has significant effect on he will not make a repurchase and loyalty will be customer satisfaction. lower. Loyal customers will pay even if prices increase because of possible risks, so customers 2.1.2 Relationship of Prices and Customer choose to pay a higher price to avoid these risks Satisfaction (Yoon and Kim, 2000). A research conducted by Bakti and H4 : Price has significant effect on customer Sumaedi (2013) shows that prices affect aspects of loyalty. customer satisfaction and foster customer loyalty. Price from the customer's point of view is 2.1.5 Relationship between Customer often used as an indicator of value that grows Satisfaction and Customer Loyalty through customer perception or assumptions According to Nisar, Nguyen and Knox (2018) when price (the amount of financial sacrifice customer satisfaction arises when customers feel provided) is related to the perceived benefits of satisfied and happy in the transaction process so goods or services. Price assessment indicators can that they make repeat purchases and satisfied be seen from the suitability of a sacrifice from the customers recommend word of mouth to others. customer to the value it receives after making a Fornell (in Tjiptono, Fandy, 2012) asserted that purchase, and from there the customer will customer satisfaction is an overall after-purchase perceive the product or service. If the price of a evaluation that compares perceptions of product product and includes services in accordance with performance with pre-purchase expectations. the expectations and benefits of the product will According to Kotler (in Tjiptono, Fandy, 2012) increase satisfaction. Conversely, if the price customer satisfaction is the level of one's feelings perception of the product and includes services after comparing the perceived performance with does not match the expectations and benefits of the expectations. product, it will cause dissatisfaction. Oliver (1997) believed that in the long run H2 : Prices have significant effect on customer satisfaction will have an impact on the formation satisfaction. of customer loyalty. H5 : Customer satisfaction has significant effect 2.1.3 Relationship between Service Quality and on customer loyalty. Customer Loyalty A study by Bakti and Sumaedi, (2013) revealed that 2.1.6 Relationship Between Service Quality and service quality has a direct effect on customer Company Image satisfaction, which directly affects customer Normasari andSelviet. al, (2013) believed that a loyalty. company's success is proven by the ability of Quality of service can provide an incentive for employees to provide good services so that customers to establish strong bonds with the customers feel satisfied and the company's image company. If the customer feels good about the becomes positive. The results showed that service service quality, then the customer will make a quality has a positive effect on company image. repeat purchase even further, they will do a word The quality of service is important because it will of mouth promotion to colleagues, relatives and have a direct impact on the company's image. acquaintances, and have immunity over Good quality service will be an advantage for the competitors' offers. company. When a company gets a positive value H3 : Quality of service significantly affects in the eyes of customers, the customer will give customer loyalty. good feedback and may become a repeat customer. H6 : Quality of service significantly affects the 2.1.4 Relationship between Price and Customer company's image. Loyalty According toPongoh, Melysa Elisabeth (2013) price 2.1.7 Relationship between Company Image and influenced customer loyalty. This is confirmed in Customer Loyalty the research of Bakti and Sumaedi, (2013) that The positive things that can improve a company's prices affected aspects of customer satisfaction and image are the company's success and history. The foster customer loyalty. When customer gets the image of a company is a representation of an price of a service or item accordingly, there is a institution with the hope of being able to possibility for the customer to show a desire to encourage a positive corporate image. Lai, Griffin make a repurchase. On the other hand, if customer and Babin (2009) along with Hart and Rosenberger does not feel that what is sacrificed is appropriate, III (2004) (in Normasari S., Kumadi, and 188 Kusumawati, (2013) stated that company image answers regarding the level of respondents' has a significant effect on customer loyalty. agreement with the statements stated in the H7 : Company image has significant effect on questionnaire. The level of respondents' approval customer loyalty. is divided into five levels with a value category (1) strongly disagree, (2) disagree, (3) doubtful, (4) 2.1.8 Relationship between customer satisfaction agree, (5) strongly agree. The data used in this and company image study, by their nature, are quantitative data Schnaars (in Tjiptono, 1997) states that customer because they can be measured on an ordinal scale. satisfaction is basically the goal of a business. Ordinal scale is a scale that is used to measure Customer satisfaction can provide several responses to the object of research weighing 1 to 5 benefits, including the harmonious relationship answers regarding the respondent's level of between the company and the customer and the approval in a particular event. The data in this creation of a good basis for repurchases and the study are primary data. Data collection is done by creation of customer loyalty. questionnaire method. Normasari S., Kumadi, and Kusumawati (2013) showed that customer satisfaction has a direct The data analysis technique used is statistical effect on customer satisfaction and company analysis using Structural Equation Modeling image. (SEM). SEM is used to determine the effect of H8 : Customer satisfaction significantly influential service quality and store image prices on customer company image. satisfaction and loyalty at Zelika Stores. THEORETICAL FRAMEWORK 4. RESULT AND DISCUSSION 4.1 Validity test All items of questions regarding variables of service quality, price, company image, customer satisfaction and customer loyalty have a significant value <0.05 in large samples. This is in accordance with the provisions that have been applied indicating that all question items of each variables are valid and can be used in this study. 4.2 Reliability Test Alpha values of all variables are greater than 0.5. Thus, all statement items for each variable are 3. RESEARCH METHODS declared reliable, i.e when used several times to measure the same object, the instrument will This study uses statistical analysis using Structural produce the same data. Equation Modeling (SEM). This study illustrates the relationship of variable service quality, price, 4.3 Description of Research Subjects company image, customer satisfaction and The respondents’data include gender, duration of customer loyalty to Zelika Stores. The source of being a customer, age, education and work. A total data in this study is primary data that is directly of 120 respondents were used in this study. obtained from the first data source without any intermediaries. The technique in sampling in this 4.4 Subject Descriptions by Gender study uses non probability sampling with a type of Most of the Zelika Toko customers are 96 (80%) purposive sampling. The value of n is 120. The male and 24 (20%) female. This shows that more number of samples used in this study is 120 men shop at Zelika stores. respondents. The population in this study werezelica store customers with 20% female 4.5 Subject Description According to Latest customers and 80% male customers. The tool for Education collecting research data is a questionnaire. The As many as 55 (45.8%) Zelika Stores customers scale used is an ordinal scale. This study measures have a vocational/equivalenteducation, 38 (31.7%) responses to research objects weighing 1 to 5 are undergraduate, 19 (15.8%) junior high school 189 graduates, 8 (6.7%) primary school graduates and significant and CR> 1.96 and the loading none werepostgraduated. factor is positive, price has a positive and significant effect on customer satisfaction. 4.6 Descriptive Subject By Duration of The more appropriate the price of the item Subscription with its quality, the higher the customer As many as 75.8% of respondents have become satisfaction and vice versa. customers for more than two years while 29 c) The p value of the influence of service (24.2%) were less than two years. quality on customer loyalty is 0.002 with a CR of 3.079 and the loading factor is a 4.7 Subject Description By Customer Age positive sign of 0.331. Because the p value A total of 53.3% of respondents aged 20 to 35 years, obtained is very significant and CR> 1.96 51 respondents (40.0%) aged 51 years and one and the loading factor is positive, the (6.7%) respondents aged 51 to 65 years. quality of service has a positive and significant effect on customer loyalty. The 4.8 Description of Variable on Service Quality higher the quality of service, the higher the The average respondent's response to the service customer loyalty and vice versa. quality variable is 4.35. This shows that the d) The p value of the price effect on customer respondents' perceptions onZelika Store service loyalty is 0.654 with a CR of -0.444. Because qualitywas positive. the p value obtained is not significant and CR <1.96, price does not significantly 4.9 Description of Respondents' Perception on influence customer loyalty. Prices e) The p value of the influence of customer Respondents' response to the Price variable was satisfaction on customer loyalty is 0.007 4.36. This shows that the respondents' perceptions with a CR of 2.706 and the loading factor is onZelika Store pricewas positive. positive at 0.404. Because the p value obtained is significant and CR> 1.96 and 4.10 Description of Zelika Store ImageVariable the loading factor is positive, customer The average store image variable is 4.39.This satisfaction has a positive and significant shows that the respondents' perceptions onZelika effect on customer loyalty. The higher Store imagewas positive. customer satisfaction the higher customer loyalty and vice versa. 4.11 Description of Customer LoyaltyVariable f) The p value of the influence of the Respondents to the customer loyalty variable is company's image on customer loyalty is 4.16. This shows that the respondents'perceptions 0.269 with a CR of 1.106 and a loading of customer loyalty to the Zelika Store was factor with a positive sign of 0.123. Because positive. the p value obtained is not significant and CR <1.96, the company's image has no SEM Model Estimation Results effect on customer loyalty. An explanation of the above test results is as g) The p value of the effect of customer follows: satisfaction on company image is very a) The value of p value from the effect of significant with a CR of 4.303 and a service quality on customer satisfaction is positive factor loading factor of 0.409. very significant with a CR of 3.845 and a Because the p value obtained is very positive factor loading factor of 0.348. significant and CR> 1.96 and the loading Because the p value obtained is very factor is positive, it is concluded that significant and CR> 1.96 and the loading customer satisfaction has a positive and factor is positive, the quality of service has significant effect on the company's image. a positive and significant effect on The higher the quality of service the higher customer satisfaction. Thus, the higher the the customer satisfaction and vice versa. quality of service, the higher the customer satisfaction and vice versa. b) The p value of the price effect on customer Discussion satisfaction is very significant with a CR of 5.672 and a positive factor loading factor of Effect of service quality on customer satisfaction. 0.551. Because the p value obtained is very Service quality variables are significantly affected 190 by Zelika Stores customer satisfaction This is formed if the customer is satisfied with the level of consistent with the results of research Bakti and service received and customers tend to choose Sumaedi (2012) revealed that service quality has a products that have advantages but at relatively direct effect on customer satisfaction, then directly cheap prices. affects library customer loyalty. Another study conducted by Amryyanti1et al, (2015) said that Effect of customer satisfaction on customer service quality has a positive and significant effect loyalty. The results showed that customer on customer satisfaction. According to satisfaction significantly affected customer loyalty. Muhammad Kashifet al, Angibility, Assurance, Reinforced by the results of research Nguyen et al, Personalization, Formality, and Coefficient have a (2018) that customer satisfaction relates to significant effect on Customer Satisfaction. customers feeling satisfied and happy in the According to Khan, Mubbsher M. and Fasih, transaction process so that they repurchase and Mariam (2014) that Service Quality, Tangibles, satisfied customers recommend word of mouth to Reliability and Empathy have a significant effect others. Reinforced by According to Muhammad on Customer Satisfaction. Kashif et al, (2015) customer satisfaction has a significant effect on customer loyalty. According to Effect of prices on customer satisfaction. The Amryyanti1et al, (2015) customer satisfaction has a results of the study show that prices had a positive and significant effect on customer loyalty. significant effect on customer satisfaction. Price is The results of this study indicate that customer a consideration for Zelika Store customers and satisfaction has a significant effect on customer influences customer satisfaction. According to the loyalty. customers, the price of Zelika Store goods is in line with expectations, more affordable compared to Effect of service quality on company image. The competing stores. Discounts in large quantities results of this study indicate that there is a buying make customers interested. The results of significant influence between service quality and the description analysis show that the value of the corporate image. According to Selvy et. al (2013) most dominant price indicator is very good. All the the company's success when employees are able to relatedprices provide a significant influence on provide good service so that customers feel customer satisfaction. satisfied and in the eyes of customers the image becomes positive. According to Mahardikawati Effect of service quality on customer loyalty. The (2013) that service quality has a positive effect on results showed that the price is significant to customer loyalty through customer satisfaction. customer satisfaction. This is supported by Quality service is indeed a mainstay of a company research Amryyanti1et al, (2015) prices support to improve its corporate image. Customers will positive and significant impact on customer trust and believe in the services provided and will satisfaction. Reinforced by Edy Haryanto (2013) certainly contribute to the value of the company's that, service quality, facilities and prices image. However, the quality of service alone does simultaneously have a positive and significant not automatically improve the company's image effect on customer satisfaction. Then according to because customers may recognize that the services Hikmatul Bariroh, (2015) price has a positive provided by the store are of good quality, but only influence on customer satisfaction. According to for themselves. Melysa Elisabeth Pongoh (2013) a significant price on customer satisfaction and loyalty. Effect of company image on customer loyalty. Company image does not significantly affect Influence of price towards customer loyalty. customer loyalty. The company's image is the Based on the results of this study that the price perception of an organization that is recorded in does not significantly influence customer loyalty the customer's memory and works as a filter that Zelika Stores. This is in line with the results of the affects the perception of the company. According study (Pongoh: 2013) that customer loyalty to Kotler (2002: 338). Customer complaints about partially has no effect on price variables. Customer the quality of service ie employees are lacking, so loyalty is not an easy thing to establish, because the that when customers need information must find product provider must first provide satisfaction to employees first. The available cashier is its customers. This satisfaction can be achieved by insufficient, so customers must stand in line when providing optimal service quality and affordable paying. Employees do not control the price of the prices to customers. Customer loyalty can be goods so that customers wait long to get answers 191 about the price of the goods. Sometimes the 7. Company image does not significantly distribution of goods is not timely. Regarding affect customer loyalty. prices, price changes often occur, so that customers However,company image does not sometimes object. Lack of after sales service. This guarantee customers make repeat causes the image of the shop is not good and purchases and recommendations. results in customers less loyal to the Zelika Store. 8. Customer satisfaction has a significant influence on the company's image. High Effect of customer satisfaction on company satisfaction leads to a more positive store image. Customer satisfaction has a significant image. influence on the company's image. The research In this study there are some limitations, conducted by Selvy Normasari, SrikandiKumadji namely when respondents fill out questionnaires, and AndrianiKusumawati (2013) shows that the some respondents do not fill in completely because variable customer satisfaction has a direct effect on it requires respondents' knowledge. Respondents corporate image variables. Customer satisfaction is also did not fill out a questionnaire based on facts a feeling of pleasure or disappointment someone experienced but based on feelings to please the who appears after comparing between perceptions company. Researchers have limitations in or impressions of the performance or results of a controlling respondents. The researcher did not product and expectations. know whether the respondent's condition was in good health or not filled out the questionnaire. 5. CONCLUSION, IMPLICATION, SUGGESTION, AND LIMITATIONS REFERENCES Based on the results of the research discussion Adona, Fitri. 2006. Citra dan Kekerasan dalam Iklan previously described in Chapter IV, the following Perusahaan di Televisi. Padang: Andalas conclusions can be concluded: University Press. 1. Service quality variables are significantly Ghozali Imam, 2017. Model Persamaan Struktural affected by Zelika Stores customer Konsep dan Aplikasi Dengan Program AMOS satisfaction. Service quality is considered 24. Semarang: Badan Penerbit Universitas to affect customer satisfaction in Diponegoro. conducting transactions at Zelika Stores. 2. Price has a significant effect on Zelika Haryanto Edy, (2013) Kualitas Layanan, Fasilitas dan Store customer satisfaction. Reasonable Harga Pengaruhnya Terhadap Kepuasan prices felt by customers. They stated that Pengguna Jasa Layanan Pada Kantor Samsat the Zelika Store is different from other Manado. Fakultas Ekonomi dan Bisnis stores that satisfy customers. Program Pasca Sarjana, Magister 3. Service quality significantly influences Manajemen Universitas Sam Ratulangi Zelika Store customer loyalty. Retail must Manado Vol.1 provide satisfaction to its customers. Hikmatul Bariroh, 2015. Pengaruh Kualitas Layanan Satisfaction leads to repeat purchases. terhadap Minat Membeli Pelanggan Pada 4. Price does not significantly affect Minimarket Indomart Minimarket Alfamart. customer loyalty of Zelika Stores. Retail Universitas Islam Negeri Maulana Malik must give satisfaction to its customers first. Ibrahim Malang. Satisfied customers will buy back or even I Gede Mahatma Yuda Bakti and Sik Sumaedi, recommend to others. 2012. An analysis of library customer loyalty 5. Customer satisfaction significantly The role of service quality and customer influences Zelika Store customer loyalty. If satisfaction, a case study in Indonesia. Vol. 34. the customer states satisfaction then make a recommendation and repeat the Kaihatu. 2008. “Analisa Kesenjangan Kualitas purchase. Pelayanan dan Kepuasan Konsumen 6. Service quality significantly influences the Pengunjung Plaza Tunjungan Surabaya”, company's image. Enhancement quality of Jurnal Manajemen dan Kewirausahaan, service automatically enhances company Vol. 10 No. 1, hal 166-83. image. 192 Kotler, 1997, Marketing Management : Analysis, Tjiptono and Gregorius Chandra. 2008. Service, Planning, Implementation, &Contro, Prentice Quality Satisfaction. Andi Ofset. Hall, Inc. Yogyakarta. ______, 2002. Manajemen Pemasaran di Indonesia : Tandjung, Jenu Widjaja. 2004. Marketing Analisis, Perencanaan, Implementasi dan Management : Pendekatan Pada Nilai-Nilai Pengendalian. Jakarta: Salemba Empat. Pelanggan. Edisi Kedua. Cetakan Kedua. Malang: Bayumedia Publishing. Mardikawati dan Farida, 2013. Pengaruh Nilai Pelanggan dan Kualitas Layanan terhadap Loyalitas Pelanggan melalui Kepuasan Pelanggan Bus Efesiensi, studi PO Efesiensi Jurusan Yogyakarta-Cilacap). Jurnal Administrasi Bisnis, Vol 2, nomor 1 Melysa Elisabeth Pongoh, 2013. Kualitas Layanan, Kualitas Produk Dan Harga Pengaruhnya Terhadap Loyalitas Pelanggan Kartu As Telkomsel Di Kota Manado. Vol.1 No.4 Hal. 86-94. Muhammad Kashif, Sarifah Suzana, Wan Shukran, Moshin Abdul Rehman, Syamsulang Sarifuddin. 2015. “Customer Satisfaction and loyality Malaysian Islamic Bank”. International Journal of Bank marketing. Vol. 33 Iss 1 pp. Mubbshern Munawar Khan and Mariam Fasih. 2014. Impact of Quality on Customer Satifaction and Customer Loyality: Evidence from Banking Sector. Pakistan Journal of Commerce and Social Sciences. Vol.8(2), 331- 354. Nguyen, Tahir M. Nisar, Dan Knox, Guru Prakash Prabhakar, (2018). Understanding Customer Satisfaction In the UK Quick Service Restaurant Industry The Influence of the Tangible Attributes Of Perceived Service Quality. Vol. 36 Purnama, Nursya’bani. 2006. Manajemen Kualitas. Edisi Pertama. Yogjakarta : EKONISIA Normasari Selvy, Kumadji Srikandi, Kusumawati Andriani Kusumawati (2013). Pengaruh Kualitas Pelayanan Terhadap Kepuasan Pelanggan,Citra Perusahaan dan Loyalitas Pelanggan. Fakultas Ilmu Administrasi Universitas Brawijaya Malang. Jurnal Administrasi Bisnis Vol. 6. Sugiyono, 2015. Metode Penelitian Pendidikan (Pendekatan Kuantitatif, Kualitatif dan R&D. Bandung: Alfabeta. Tjiptono, Fandy, 2011. Strategi Pemasaratan. Yogyakarta: CV. Andi Ofset. 193