Low Growth in State-Owned Enterprises Profitability, Weak Quality Cost Management?
DOI:
https://doi.org/10.1229/tecempresarialjournal.v17i2.79Abstract
State-Owned Enterprises (SOE) has a role in growing the Indonesian economy for citizen prosperity, with most of its capital coming from the state. Indonesian SOEs are experiencing a challenge in decreasing their ability to make profits. This research will test the quality costs management in minimizing internal and external failure costs, so the SOE can produce the goods that result in competitiveness, sales growth, and high profits. This research's analysis unit (SOE) is listed on https://bumn.go.id/ with 25 SOEs in total, using purposive sampling techniques. The data collection uses a secondary data method—taken from the financial report 2021. Data analysis was performed using a descriptive-verifiable statistical significance test (t-test). Based on the significance test results, evidence was found that quality costs affect profitability in Indonesian SOEs. Logically, the quality cost consists of prevention, assessment, and internal and external failure costs. Meanwhile, controlling cost consist of prevention costs and assessment costs. With huge controlling costs, SOE produced good quality and competitive products that will impact sales growth.
References
Abulaila, M. D., & Abdulrahman, I. (2019). The Impact of Quality Cost on Financial Performance of Banks Operating in Jordan. Research Journal of Finance and Accounting, 10(2), 53–61. https://doi.org/10.7176/RJFA
Aulia, A., & Meyliana. (2019). Analysis of the effect of the costs of prevention, assessment, internal and external failures on the profitability of the enterprise. Proceedings of the Research Results Seminar, 58–65.
Blocher, E. J., Stout, D. E., & Gary, C. (2010). Cost Management: A Strategic Emphasis. McGraw-Hill.
Botchkarev, A., Care, T., Andru, P., & Care, T. (2011). A Return on Investment as a Metric for Evaluating Information Systems : Taxonomy and Application. Interdisciplinary Journal of Information, Knowledge, and Management, 6.
Campanella, J. (1990). Principles of Quality Costs. ASQC Quality Press.
Eraslan, S., & Önal, S. (2021). Quality Costs And Application In A Manufacturing Enterprise Kalite Maliyetleri v e Bir Üretim İşletmesinde Uygulaması. International Journal of Society Researches, 17(35). https://doi.org/10.26466/opus.824779
Dawn, M. (2019). The Effect of Quality Costs on Increasing Profitability on CV Anabanua Cipta Buana in Wajo Regency, South Sulawesi Province. University of Muhammadiyah Makassar.
Firescu, V., & Popescu, J. (2015). The Costs of Quality : An Important Decision Tool. International Journal in Economics and Business Administration, III(4), 44–52.
Hansen, D. R., & Mowen, M. M. (2015). Management Accounting. New York: Cengage Learning.
Khairina Rosyadah, B. A. M. N. (2021). Does Profitability, Firm Size, and Investment Opportunity Set Affect Earnings Quality? Journal of Accounting, 25(1), 54. https://doi.org/10.24912/ja.v25i1.724
Kreem, Z. A., & Al-yasar, A. R. A. (2020). Quality Costs and Their Impact of the Competitive Advantage of Industrial Companies: Exploratory Study. PalArch's Journal of Archaelology of Egypt, 17(3), 2362–2374.
Muin, M. F., & Wardini, A. K. (2020). Study of State-Owned Enterprises ( SOEs ) Profitability in Indonesia 2012-2016 Period. Sriwijaya International Journal of Dynamic Economics and Business, 4(May), 57–72.
Myeza, Z. (2017). The effects of waste management on profitability in a flexible packaging company. University of the Witswatersrand.
Naini, N. F., Santoso, S., Andriani, T. S., Claudia, U., & Nurfadillah. (2022). The Effect of Product Quality on Customer Satisfaction ImplicThe effect of product quality, service quality, customer satisfaction on customer loyaltyations on Customer Loyalty in the Era of Covid-19. Journal of Consumer Sciences, 7(1), 34–50.
Omachonu, V. K., Suthummanon, S., & Einspruch, N. G. (2004). The relationship between quality and quality cost for a manufacturing company. International Journal of Quality & Reliability Management, 21(3), 277–290. https://doi.org/10.1108/02656710410522720
Padmiwati. (2018). The Effect of Quality Costs on Profitability with Operational Costs as an Intervening Variable at Kasih Ibu Surakarta Hospital. Widya Dharma Klaten University.
Paidi, M. (2010). Analysis of the Effect of Cost of Quality on Profitability Levels in PT. Cerya Riau Mandiri Printing Pekanbaru. Sultan Syarif Kasim Riau State Islamic University Pekanbaru.
Rachmawati, R. (2022). Intellectual Capital and Corporate Governance on The Profitability of Indonesian State-Owned Enterprises. Central Asia and The Caucasus, 23(1), 1502–1507.
Rachmawati, R., Romdani, N., & Ganiah, S. (2020). Does Disclosure of Intellectual Capital Increase the Profitability of State-Owned Enterprises in Indonesia? PalArch's Journal of ... , 17(March), 4074–4083. Retrieved from https://archives.palarch.nl/index.php/jae/article/view/6051
Rosiawan, M., Singgih, M. L., & Widodo, E. (2019). Model of quality costs and economic benefits of a business process of manufacturing companies. Cogent Engineering, 6(1), 1–15. https://doi.org/10.1080/23311916.2019.1678228
Siregar, M. I., Cahyadi, A., Igamo, A. M., Saggaf, A., & Sulbahri, R. A. (2022). Financial Ratio Analysis of State-Owned Enterprises (SOE) in the City of Palembang. Journal of Finance and Business, 20(1), 13–27.
Swantari, A., & Habibie, F. H. (2015). Quality Cost Analysis of Profitability (Case of PT. Development of Jaya Ancol Tbk.). Scientific Journal of Tourism, 20(3).
Tambingon, R., Karamoy, H., & Pangerapan, S. (2020). Indonesia Accounting. Indonesia Accounting Journal, 2(1), 52–57.
Tandiontong, M., Sitanggang, F., & Carolina, V. (2010). The Effect of Quality Costs on the Company's Profitability Level (Case Study at The Majecty Hotel Bandung). Scientific Journal of Accounting, 2(1).
Teplická, K., & Hurna, S. (2021). New Approach of Costs of Quality According their trend of During Long Period in Industrial Enterprises in SMEs. Management Systems in Production Engineering, 29(1), 20–26. https://doi.org/10.2478/mspe-2021-0003
Law of the Republic of Indonesia Number 19 of 2003 concerning State-Owned Enterprises.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Tec Empresarial
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
