The Influence of Company Strategy towards Enterprise Risk Management, Organizational Culture, Supply Chain Management and Company Performance

Bambang Riyadi Soegomo, Taher Al Habsyi, Solimun and Irwandy Arif

Graduate School of Management and Business, University of Brawijaya, Indonesia.

Faculty of Administrative Sciences, University of Brawijaya Malang, Indonesia.

Faculty of Mathematics and Natural Sciences, University of Brawijaya, Indonesia

Bandung Institute of Technology, Bandung, Indonesia, Faculty of Mining and Petroleum Enginering

Corresponding author Email: ahmady23@gmail.com

Accepted 03 April, 2014

Abstract

This research was focused on Company Strategy as the exogenous variables, Enterprise Risk Management, Organizational Culture, Supply Chain Management and Company Performance as the endogenous variables on Coal Mining Companies at East and South Kalimantan. This research used explanatory research, by using the Enterprise Risk Management instruments from KPMG Australia (2001), strategy quality instrument from Tilles (1983), Organizational Culture instruments from Hofstede (1994), and Supply Chain Management instrument from Partiwi (2009). ROA and ROE of the coal mining companies were collected from a public company as a secondary data. The effect of those variables on five coalmining companies in East and South Kalimantan was tested by Partial Least Square (PLS). The total samples were 20 out of 96 coal mining companies in East and South Kalimantan Province. The research Showed that Company Strategy has a significant effect on Enterprise Risk Management, Company Strategy has a significant effect on Organizational Culture, Company Strategy has an insignificant effect on Supply Chain Management, Company Strategy has a significant effect on Company Performance, Enterprise Risk Management has a significant effect on Supply Chain Management, Enterprise Risk Management has a significant effect on Company Performance, Organizational Culture has a significant effect on Supply Chain Management, Organizational Culture has a significant effect on Company Performance, and Supply Chain Management has an insignificant effect on Company Performance. Based on the limited research, it is found that: (1) model fit is not sufficient because lack of data collected and (2) business environment on ROA and ROE of the coal mining companies was not analyzed. The world coal demands declined in 2008 and 2012, and this has made ​​ the company performance declining at those periods. In conclusion, this research showed that empirical studies support the importance of Company Strategy, Enterprise Risk Management, Organizational Culture, Supply Chain Management and Company Performance on Coal Mining Companies at East and South Kalimantan.

Keywords: Company Strategy, Enterprise Risk Management, Organizational Culture, Supply Chain Management and Company Performance.