Institutional
Capacity Development of Village Owned Enterprises In Sarjo Village, Sarjo
District Nuraisyah, Dandan Haryono, Viny Marsela
Sombodatu Universitas
Tadulako, Indonesia Email: [email protected]
[email protected] [email protected] |
Keywords |
Abstract |
capacity building, institutions, village owned enterprises |
Through employment and community and village business empowerment,
village-owned enterprises have a role and contribution to the economy. The
main problems faced are not only capital, marketing, labor, technology, and
market problems; what is more important is institutional capacity in human
resource development. This study examines the institutional capacity development
of village-owned enterprises in Sarjo Village, Sarjo District, Pasangkayu
District. This research is descriptive-explorative in nature and uses an
inductive qualitative method. The research strategy is a case study. This
research focuses on institutional capacity, stages of institutional capacity
building, and levels of institutional capacity development. The research
location was a village-owned enterprise in Sarjo Village, Sarjo District,
Pasang Kayu District, and informants were selected based on their role in
developing the institutional capacity of the two elements. Observations,
interviews, and collection of relevant documents were used to collect data.
Data analysis uses interactive models and performs step-by-step analysis
using linear and hierarchical techniques. The institutional capacity of
Village Owned Enterprises is not yet optimal. This is evident from the
capacity to use its resources is still limited. Stages Implementation of
institutional capacity building has been carried out, but is still limited in
the scope of each stage, in addition to limited knowledge in running its
business. Meanwhile, the institutional capacity building carried out by the
government in Sarjo Village, Sarjo Subdistrict, Install Timber District, has
not had any follow-up stages in the form of technical guidance and business
assistance stages. Institutional capacity development carried out by
Village-Owned Enterprises is still limited, both at the personnel level,
organizational level development and system (rule) level development. Based
on the description above, it shows weak entrepreneurial skills, such as
enthusiasm, attitude, action, and knowledge. Studies show that networking is
a business characteristic of Sarjo Village, Sarjo District, Pasang Kayu District,
which is very important for the existence, survival and sustainability of the
business � 2023 by the authors. Submitted
for possible open access publication under the terms and conditions of the
Creative Commons Attribution (CC BY SA) license (https://creativecommons.org/licenses/by-sa/4.0/). |
1. Introduction
The BUMDes approach, which is a
component of the Micro, Small and Medium Enterprises (BUMDES) approach from a
global perspective, is recognized as having an important role in the
development and economic growth of developing countries, especially in Indonesia.
According to the World Bank (2005), small and medium enterprises (SMEs) are one
of the main drivers of economic development and are very important for growing
the economy and creating new jobs. Recently, developing countries have
considered the importance of the existence of small and medium enterprises, for
at least three reasons. (Berry,
Rodriguez, & Sandee, 2001), namely:First, because SMEs tend
to be better at producing a productive workforce; secondly, because as part of
its dynamics, SMEs often achieve increased productivity through investment and
technological change; and third, because it is usually considered that SMEs
have an advantage in terms of flexibility compared to large businesses in their
implementation..
As a developing country, Indonesia
recognizes that small and medium enterprises play an important role in the
economy, especially after the monetary crisis in 1997. Their strong resistance
to the crisis attracted the attention of the Indonesian government and people,
Tambunan (2009:1). This has synchronization with what is being done by BUMDes
in Indonesia, especially at BUMDes which is located in Sarjo Village, Sarjo
District, Pasangkayu Regency.
In several areas, Village Owned
Enterprises (BUMDES) have become an important part of the national economy.
However, they still face various challenges and challenges both from within and
from outside, such as in terms of processes, production and processing,
marketing, and the business environment (2002:1). According to (Tresnawati,
Wardiani, & Anisyahrini, 2021), village-owned enterprises face
many problems when helping micro and small businesses in Indonesia. This
includes issues such as:
1.
Internal Problems
a.
Lack of Capital
A business unit that depends on limited
village capital requires capital. However, loan capital from banks or other
financial institutions is difficult to obtain due to the administrative and
technical requirements required by the bank.
b.
Limited Human Resources (HR).
Most small businesses come from families
and grow in a traditional way. Limited human resources both in terms of formal
education, knowledge and skills greatly affect the management of company
management, making it difficult to achieve optimal growth. In addition, the
business unit faces the challenge of implementing new technological innovations
to increase the competitiveness of the products it produces due to limited
human resources.
c.
Weak Business Network and Market Penetration Capability.
Small businesses, which usually come from
families, have very limited business networks and low market penetration
capabilities because the products they produce are limited in number and of
less competitive quality. On the other hand, large businesses have strong
business networks, good promotions, and technology that can reach markets all
over the world.
2.
External Issues
a.
Unfavorable Business Climate
Although the government's growth policy
continues to be improved from year to year, it is considered not fully
effective. This is shown by the unhealthy competition that continues to occur
between large entrepreneurs and small entrepreneurs.
b.
Limited Business Facilities and Infrastructure.
Lack of information about the progress of
science and technology causes their facilities and infrastructure not to
develop quickly and do not support the progress of their business as expected.
c.
Implications of Regional Autonomy
The enactment of Law no. 23 of 2014, the
authority to regulate and supervise local communities is in the hands of the
regions. Business actors will be subject to new levies as a result of this
system change. Competitiveness will decrease if this situation is not corrected
immediately. In addition, excessive regional enthusiasm sometimes makes
entrepreneurs outside the region not interested in developing their business in
that area.
d.
Free Trade Implications
We know that the 2003 AFTA and 2020 APEC
had significant consequences for Bumdes' ability to compete in free trade. In
this case, Bumdes is required to carry out production processes efficiently and
productively and produce products that meet global market demands with quality
standards such as quality (ISO 9000), environment (ISO 14000), and human rights
(HAM). Developed countries often use this problem as a non-tariff trade
barrier. Thus, the Hadith of BUMDES is expected to enable the community to prepare
themselves to compete competitively with a long-lasting comparative advantage.
Short-lived Product Nature.
e.
Limited Market Access
The products made cannot be marketed
competitively in the domestic and international markets due to limited market
access. Furthermore, the researcher presents previous research in order to be able
to distinguish where there are similarities and differences that appear in this
study as a novelty that must exist in every study.
The research entitled Capacity
Building (Bumdes) of Village-owned Usaa Agency which was carried out by (Nuraisyah
& Haryono, 2023) in Sigi district. This research
focuses on the Institutional Capacity Building of BUMDES because Sigi District
is one of the many districts that has BUMDES. This study found that BUMDES
faced problems in increasing human resource capacity, such as building
community learning motivation because the general public did not know about it.
about the natural opportunities and challenges of employees in applying the
results of their training in their workplaces. This study aims to find out how
village-owned enterprise institutions (BUMDes) can improve the economy of the
people of Sigi Regency. This study uses qualitative and phenomenological
methods. This study identified research informants who had a direct
relationship with the management of natural resources by BUMDES. This study
uses data analysis techniques to identify and organize data collected from
field notes, interviews, and other sources. therefore easy to understand and
results clearly communicated to a wide audience. The results of the research
and discussion show that increasing the capacity of Village-Owned Enterprises
(BUMDes) in improving the economy of the people of Sigi Regency can be measured
through institutional development, human resource capacity building, and system
capacity building. which didn't work.
The similarities from the research
conducted in 2022 and 2023 are, firstly the similarities in the area of
variables namely discussing capacity building, the two theories
used are almost the same, the methods are the same.
The differences in research
conducted by the authors in 2022 and 2023 are as follows, different times and
places, different theories used, different units of analysis, different
novelties and results and different recommendations, but this research is part
of development of previous research.
Furthermore, discussing the facts
in the field showing that the performance of village-owned enterprises is still
low, this is shown as follows: Village-owned enterprises have not run their
business effectively, for example, the majority of village-owned enterprises do
not have all types of businesses that are clear, as well as the equipment
needed. in business. so that Village-Owned Enterprises Under these conditions,
Village-Owned Enterprises incur higher costs and obtain less than optimal
profits. Other conditions show that, in the last three months from August -
October 2023, product orders have decreased by around 30% each month,
especially from the region (market share). This condition directly causes
profit (profit) to decrease.
From the results of observations
with several Village-Owned Enterprise owners, regarding institutional capacity
as follows: 1) do not yet have competence, in this case they have not been able
to organize their functions and roles according to business needs. 2) The
ability of employees or Human Resources is still limited, for example: lack of
loyalty. 3) Limitations in establishing relationships and accessing networks in
taking advantage of opportunities. For example, the business network is still
limited, where the existing network is in the procurement of raw materials, 4)
Has not been able to obtain and access information, for example information on
market opportunities or market needs, and information on marketing products, 5)
Not yet able to produce superior products. 6) Do not understand the rules
related to his business.
Problems with Village Owned
Enterprises, including: 1) The quality of human resources for small business
owners is still low, 2) Product quality is not maximized, 3) Cooperation
between micro, small and medium enterprises is still low, 4) Mastery of markets
and technology and 5) Limitations access to sources of capital.
Next, we will discuss the concept
of institutional capacity building, including:
a.
Institutional and institutional
concept
a.
In this dissertation, institutions (institutions) are conceptually
defined as the rules of the game (Adelman
& Adelman, 1987); (North,
1990); (Leković,
2011), which are both formal and
informal. Influence one another, and complement and replace one another to
achieve goals (Zenger,
2002). The rules governing the
relationship between individuals and groups are called institutions (Broner et
al., 2022). In addition, (Lee &
Cotte, 2009) states that institutions have
various types of boundaries, namely boundaries made by humans for their
interactions. Draft Boundaries can be formal, such as man-made rules or laws,
or informal, such as conventions or codes of conduct.
b.
(code of conduct) or contains both; meanwhile, according to Ruttan
and Hayami, 1984, institutions are rules set in a community group or
organization to help its members in the hope that everyone can work together or
relate to one another to achieve common goals. In addition, institutions,
according to (Nugent
& Nabil, 1989) (Djogo,
2003), are boundaries or controls that
govern behavioral relationships between group members or individuals. By this
definition, most organizations are institutions because they usually have rules
that govern their relationships with members and with others outside the
organization.
c.
In addition, it is said that the institution has a clear purpose
and location (North, 1990: 4). According to (Tan, 1994), economic institutions function
to meet the needs of human life, such as getting money, hoarding, processing,
and distributing goods and services. Meanwhile, according to (Vablen, 1997: 7),
business institutions (business enterprises) are formed on the basis of the
motivation to seek profit.
d.
By considering the two opinions above, the authors define
Village-Owned Enterprises as economic institutions that function to meet the
needs of life and human livelihoods by producing, stockpiling, processing, and
distributing goods and services. This organization was formed with the aim of
making a profit.
b. Capacity Building Concept
By considering the responses
(Goodman, 1998; GTZ, 2005; JICA, 2004; UNDP, 1992; Mahsun, 2006:25; Haryanto,
29-32). Institutional capacity is defined as the ability of an institution to
use resources optimally to achieve the vision, mission, goals, objectives,
outputs, and impacts that have been determined in business performance. These
resources can come from within the institution (HR, system, mandate, structure,
budget and facilities), or from outside the institution (outside the
environment or external factors).
(Haryono
& Nasir, 2021) The study of capacity building
has given rise to various concepts and definitions. Some scientists interpret
capacity building as capacity development or capacity strengthening, implying
an initiative on developing existing capacity, while others refer to
constructing capacity as a creative process of building capacity that has not
yet existed. Referring to the opinion, (Marrison,
2021), ACBF (2001:9), (Millen
& Shmatikov, 2001), (Brown,
Tollefson, Dunn, Cromwell, & Filion, 2021) and GIZ,2001: Institutional
capacity building as a process and strategy to improve the ability of
individuals, groups, organizations , community or society, to encourage or
drive change at various levels in individuals, groups, organizations and
systems to strengthen the adaptability of a person or organization so that they
can respond to environmental changes. and aims to improve the performance of an
institution in achieving organizational goals
Institutional capacity building as
a cycle. (ACBF, 2001; Millen, 2001). Institutional capacity development as a
process to improve the ability of individuals, groups, organizations,
communities or society. Brown, at, all, 2001; GIZ, 2001. Dividing institutional
capacity building into three levels which include the system level,
organizational level and individual level, where Institutional capacity is the
ability of an institution, in this case a Village-Owned Enterprise, to
optimally use available resources, which include human resources, systems,
mandates, structures, budgets and facilities, as well as the environment, to
achieve the vision, mission, goals, targets, outputs, outcomes, and impacts set
by the organization on business performance. Institutional capacity development
as a process to improve the ability of individuals, organizations, to encourage
or drive change at various levels in individuals, organizations and systems to
strengthen the ability to adapt to a person or organization so that they can
respond to environmental changes. The aim of institutional capacity building is
to improve the performance of an institution in achieving organizational goals.
The theories in the framework of
thought above are used by researchers as an important foundation that will be
used as a point of view and research guide. Based on the description above, the
formulation of the problem in this study is how is the institutional capacity
building of Village Owned Enterprises in Sarjo Village, Sarjo District, Pasang
Kayu District? The aim is to describe and analyze the institutional capacity
development of Village-Owned Enterprises in Sarjo Village, Sarjo District,
Pasang kayu District.
2. Materials and Methods
In accordance with the
objectives of this research, this research was conducted using a
descriptive-explorative research type. The descriptive research aims to obtain
an overview of institutional capacity development in village-owned enterprises
in Sarjo village, Sarjo district. While exploratory research is carried out by
digging deeper into institutional capacity building
, as well as other parties such as the Regional
Government, in this case the Village and District, in the implementation of
institutional capacity building for Village Owned Enterprises in Sarjo Village,
Sarjo District and their obstacles.
This research uses a qualitative
approach with an inductive method to achieve the research objectives. This
approach aims to understand aspects of human social life based on a holistic
and complex perspective. Informants' views are processed through words,
recording, interpreting, and conveying in detail the perspective of this
informant, which is considered to originate from sociocultural problems. A case
study is a research approach in which the researcher studies a program, event,
activity, process or group of people as a whole. The study was limited by time
and activity, and various data collection methods were used during the set time
to gather information. (Creswell &
Creswell, 2017).
The object of this research is
the development of institutional capacity of village-owned enterprises in Sarjo
Village, Sarjo District. As stated in the research design section, the method
used in this study is a qualitative method with in-depth exploration of the
research object. The focus of this research includes institutional capacity.
The informants were obtained in two ways, namely by determining the key person
and snowballing. Key person for informants, Snowbolling is carried out to
determine stakeholder informants, besides that snowbolling informants is also
carried out if information or issues of interested parties are found that need
further exploration and which affect the research being carried out.
The size of the number of
informants is adjusted to the number of researchers' needs, while the
informants are related to institutional Researchers have taken several steps to
collect qualitative data, such as limiting research, collecting data through
observation and interviews (both structured and semi-structured), making
documentation, using visual materials, and creating protocols for recording or
recording data. Collection of Documents, Collection of Audio and Visual
Material
The validity that has been
carried out by researchers in this qualitative research is by using three of
the eight validity strategies proposed by (Creswell &
Creswell, 2017), namely:
a.
Conduct
data triangulation based on different data sources by examining evidence from
various sources related to the development of institutional capacity of
village-owned enterprises in Sarjo village, Sarjo sub-district and then using
it to support the overall themes,
b. Conduct method triangulation: the methods used
in data collection include observation, interviews, and documents or
questionnaires. Ask the researcher's opinion in the interview report to ensure
that the research results are accurate.
Basically, the data processing
carried out by researchers is an attempt to make sense of data and or
information in the form of text or images. This process is carried out before
performing the analysis and gaining a better understanding of its meaning. Some
researchers compare studying the layers of an onion to understanding its deeper
meaning. (Creswell &
Creswell, 2017) layer by layer.
The above research analysis was
carried out even before data collection was completed. In the drawing and
testing stages of conclusions, researchers always "come back" to get
confirmation of facts and field data. This analysis during data collection was
conducted to determine the focus (centre of interest), create analytic
questions and initial propositions, and provide the basis for post-data
collection analysis (analysis after data collection). Therefore, data analysis
was carried out repeatedly. (cyclical) (Raharjo, 2019).
3. Results and Discussions
It has been 9 years since the
Village Law was passed, but the development of Village Owned Enterprises
(BUMDes) in various regions in Indonesia has not shown optimal performance.
Even though the role of Bumdes is quite vital in order to boost the national
economy starting from the village. The management of Bumdes refers to
Permendesa Number 4 of 2015 concerning Establishment, Administration and
Management, and Dissolution of Village-Owned Enterprises. One of the Bumdes
that needs institutional revitalization and optimization is the Bumdes in Sarjo
Village, Sarjo District, Pasangkayu Regency (North Mamuju) West Sulawesi
Province.
Individual
Capacity Development (HR)
Starting from the recruitment
process for BUMDES MANAGEMENT employees in Sarjo Village, the recruitment of
BUMDES management or personnel was based on the results of recommendations and
discussions with representatives of community leaders who were approved and
approved by the village head. Furthermore, based on the results of the
research, by interviewing the Head of Bumdes and Head of Sarjo Village, Mr.
Aldi explained, Bumdes Sarjo was established in 2017. Initially he was
secretary, then now he is chairman. Currently, the BUMDes has 12
administrators. So far, he and other Bumdes Sarjo officials have not received
intensive training, only simple financial training.
"We have never
received HR capacity building training, business training and the like,".
However, if human resource
development is lacking, village institutional and entrepreneurial capacity will
fail to develop. In addition, when questioning matters related to the program
planning process, everything has not gone well because they do not yet have
facilities, both the secretariat office and other equipment. Based on the
results of the research, the researchers analyzed that the level of success or
progress of the Bumdes in Sarjo Village may not be as expected because there
are several indicators or parameters that have not been carried out coherently,
including, first, Recruitment of management that has not been carried out
professionally, the two Bumdes personnel are maximally still rich in structure
but minimal function so that there are a number of important notes that must be
carried out when human resources are abundant or too many, it must be balanced
with capacity building through training and this has not been implemented
properly. Third, an organization must have good and mature planning regarding
program plans, program implementation, and program evaluation where this is
part of professional organizational management but this has not been
implemented so it needs to be a concern that must be done.
Organizational
Capacity Building (STRUCTURE)
With regard to organizational
capacity development, it is related to structure, communication and
coordination, this has an important role in developing institutional capacity.
Although in reality there is minimal training and the role of the local government
for Bumdes in Pasangkayau district, especially Bumdes Sarjo, but at least they
have a business being run, namely tunnel rental, cattle and rental of
electronic musical instruments. According to the head of the village village
and head of Bumdes "We have 9 cows that are bred and ready to sell. Prices
range from IDR 9 million to IDR 12 million," (Andrianto, Matoati,
& Ermawati, 2023). These cows are stored in the residents'
place because the Bumdes do not yet have their own land. The electone rental
was running before the Covid-19 pandemic. After the pandemic, the rental of
electronics has stagnated, especially now that technology is getting more
sophisticated, people can play music or do karaoke from their cellphones. For
tunnels, the rental price is IDR 125,000 per plot and is still effectively
running.
From the Bumdes business
income, there is a profit sharing per year, namely 15 percent for village
institutions, 5 percent for the supervisor or village head, 80 percent of which
goes to Bumdes, including for administrator fees. This was stated in Perdes
rules. He explained, this Bumdes originates from its budgeted capital from the
central village fund, namely from the Ministry of Villages. The role of local
government in the development of Bumdes has not been maximized. This is a
challenge for Bumdes administrators. Besides that, the lack of business capital
is an obstacle in the development of Bumdes Surjo. "In 2023 we plan to add
more cows, but are constrained by capital, (Bumdes Chief, 2023). The
development of Bumdes is also faced with the challenge of a lack of
communication and coordination between Bumdes management
On the internal side, Bumdes
Sarjo is also not yet complete. This Bumdes doesn't have an office yet,
currently it's still a ride-hailing. There is no office, automatically this
BUMDes does not have an organizational structure chart. The impact of the work
system is erratic. Based on the results of the research above, the researchers
conducted an issue analysis by conducting an analysis based on the research
data obtained which was based on indicators that became questionable, among
others, First, the role of the Regional Government in strengthening BUMDES had
not met expectations, so it could be said that it was not optimal. The two
governments in pushing for the progress of BUMDES have not been comfortable
with the actions taken. The three organizational structures and work procedures
for Bumdes currently have human resources, but the structure does not yet exist
because the work system is not optimal because it does not have its own office
or room. The four obstacles experienced by Bumdes in Sarjo Village are,
Capital, HR training or HR capacity, business opportunities that are still in
doubt, offices, and government participation that has not been maximized. The
five targets for Bumdes Sarjo this year are to increase capital and add a
business that is quickly profitable, even though it is still in the process of
designing and formulating. The six employees of Bumdes Sarjo receive an honor
or an uncertain incentive because honors are only based on income or profits
from the business being managed, namely 80% of the profits from the business
made are used as business capital again, operational including honorifics. The
seven businesses that are run by Sarjo's bumdes already exist and of course are
already running so they only need coaching and maximizing the potential of
existing businesses. The eight BUMDES reports are always given to the village
head in accordance with the provisions. Finally, Bumdes Sarjo has sufficient
capital and the capital comes from the village, so that in the future the
Bumdes through the village head can access capital through investors or others.
System
Development (Institutional)
Furthermore, the results of the
research are related to the system or rules and basis for implementing Bumdes
in Sarjo Village, Sarjo District. Based on the results of the research that the
basis for implementing Bumdes in Sarjo Village is PERDES (Village Regulations),
but this rule has been around for a long time. Then, currently there are no
Bumdes community associations or containers in their area. The informant said
"There used to be Bumdes associations from the central and district
levels, but now they don't exist anymore, whether it's a vacuum or it doesn't
really work. Furthermore, with regard to operational guidelines, they are only
aligned with PERDES, there are no operational guidelines, especially PERDES. It
also requires revision or Innovation from these rules so that they are adapted
to the progress of the times and technological developments then related to
changes in structure and management The informant also revealed that his party
needed guidance from the local government to revitalize and boost the Bumdes
institution so that it is more professional. management capacity, establishment
of offices and business development of Bumdes. In this way, the goal of Bumdes
to strengthen the village economy can be realized as expected.
Based on the research results
in the bag, the researchers analyzed the indicators in system development based
on the data and facts obtained. first, the basis for BUMDES rules is the lowest
perdes rules, but these rules already require revision to keep up with the
times. Moreover, there are no operational guideline taps belonging to BUMDes.
Second, there is no Bumdes coordinating team forum facilitated by the regional
government for the flow and channel of Bumdes coordination and development, so
the role of the local government is needed so that Bumdes can be massive and dynamic.
The three work rules for BUMDes personnel have not met expectations because
there are no clear rules regarding the BUMDes work procedures. The four
operational guidelines or Bumdes regulations are only based on old Perdes.
First, in terms of individual capacity
development, the number of Bumdes personnel in Sarjo Village has been maximized
and exists.
Second, in terms of structural capacity development, the obstacles
experienced by the Bumdes in Sarjo Village lie in capital, determining the
right business and human resource capabilities. Sarjo Bumdes target this year
is to add new businesses to get lots of profits. Employees of Bumdes Sarjo get
Honor or Incentives that come from business profits at Bumdes Sarjo Adesa. The
businesses run by the Sarjo bumdes are tent rentals, cattle farms and
electones. Bumdes reports are always given to the village head in accordance
with applicable regulations. Bumdes Sarjo has sufficient capital and the
capital comes from village funds.
The third is from the development of systems or rules. The basis for BUMDES
rules is village regulations and operational guidelines or Bumdes SOPs guided
by village regulations, then the current BUMDES operational rules and
guidelines are in accordance but require revision.
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