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Financial management effectiveness of Indonesia's construction state-owned enterprises

Pamulu, Muhammad Sapri, Kajewski, Stephen L., & Betts, Martin (2009) Financial management effectiveness of Indonesia's construction state-owned enterprises. In Jaiswal, Sumeet & Wang, Liang (Eds.) Infrastructure Research Theme Postgraduate Student Conference 2009, 26 March 2009, Queensland University of Technology, Brisbane.

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Abstract

This paper addresses a comparative analysis of financial management effectiveness, which evaluates financial performance in the Indonesia’s construction state-owned enterprises (SOEs). State companies were established to make a significant contribution to the growth of national economy and generate profitable revenue for the state. The primary objective is to examine critical aspect of corporate financial strategy that would affect the sustainable growth of SOEs. This research is an extension of a larger study that is an attempt to explore strategic practices for Indonesian construction firms that generates a competitive advantage. The research methodology adopted for this empirical study includes data collection and analysis of firm annual reports and audited financial statements of the SOEs in 2001-2007 fiscal years. All of 14 construction firms under Ministry of State-Owned Enterprises of Republic of Indonesia have been selected as the sample of study. The methodology relies on financial ratio analysis to draw meaningful conclusion. There are some methods and techniques in analysing financial performance of either construction public or private firms, but management effectiveness approach is widely regarded as the ultimate measure of corporate performance. Modified traditional ratios of Return of Investment (ROI) such as Return of Assets (ROA), and Return on Equity (ROE) are adapted to support different purposes of analysis. The analysis reveals that the Contracting SOEs performs more effective than above the Consulting SOEs. Thus, corporate management board of Consulting SOEs need to pay more serious attention to their corporate financial strategies. This perspective will be increasingly important along with the current privatisation policy of the Indonesian government.

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ID Code: 19226
Item Type: Conference Paper
Keywords: Financial Management, Management Effectiveness, Indonesia, Construction, State-owned Enterprises
ISBN: 9781741072709
Subjects: Australian and New Zealand Standard Research Classification > ENGINEERING (090000) > CIVIL ENGINEERING (090500) > Civil Engineering not elsewhere classified (090599)
Divisions: Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering
Past > Schools > School of Urban Development
Copyright Owner: Copyright 2009 Queensland University of Technology
Deposited On: 27 Mar 2009 14:22
Last Modified: 03 Apr 2013 11:13

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