PROPOSED RISK-BASED PERFORMANCE MANAGEMENT SYSTEM (RBPMS): INTEGRATING STRATEGY, RISK, AND PERFORMANCE A CASE STUDY OF INDONESIAN MANUFACTURING COMPANY

An increasingly competitive environment requires company to maintain company performance to achieve company goals. To improve company performance, the company needs a suitable and unique strategy and a sound enterprise risk management (ERM) implementation to face an era full of uncertainty and high...

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Main Author: Hadiyanto, Haris
Format: Theses
Language:Indonesia
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Online Access:https://digilib.itb.ac.id/gdl/view/74282
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Institution: Institut Teknologi Bandung
Language: Indonesia
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spelling id-itb.:742822023-07-03T15:02:08ZPROPOSED RISK-BASED PERFORMANCE MANAGEMENT SYSTEM (RBPMS): INTEGRATING STRATEGY, RISK, AND PERFORMANCE A CASE STUDY OF INDONESIAN MANUFACTURING COMPANY Hadiyanto, Haris Manajemen umum Indonesia Theses Competitive Advantage, Enterprise Risk Management (ERM), Performance Management, Risk-Based Performance Management System (RBPMS), Strategic Management INSTITUT TEKNOLOGI BANDUNG https://digilib.itb.ac.id/gdl/view/74282 An increasingly competitive environment requires company to maintain company performance to achieve company goals. To improve company performance, the company needs a suitable and unique strategy and a sound enterprise risk management (ERM) implementation to face an era full of uncertainty and high volatility. Many studies have examined the impact of implementing ERM on company performance, but only a few researchers have integrated ERM, company performance, and strategy management. The integration between strategy, risk and performance management is focused on evaluating the company's strategy in detail and carefully by considering three important indicators according to each strategic objective. This study aims to design and implement the integration between strategic, risk and performance management using the Risk-Based Performance Management System (RBPMS) in the case study of PT. XYZ with a focus and limitations on two strategic themes for internal processes, which is the innovation process and operation excellence. PT. XYZ is a livestock equipment manufacturing company in Indonesia and has dozens of both national and international competitors. This research will begin with problem exploration using interviews to understanding the company issue, selecting a performance management system framework, specifically RBPMS, determining key performance indicators (KPI) and their weighting, assessing key risk of the company, determining key risk indicators (KRI) and key control indicators (KCI), and aligning risk-taking to strategy evaluation by considering the performance, risk, and control condition (red-yellow-green color indicator). The KPI, KRI, and KCI will be presented in the results of this study to integrate strategic, risk, and performance management to make it easier for PT. XYZ to conduct strategy evaluations. The main cause of the problem is the unalignment management of strategy, risk and performance. Through a gap assessment with the COSO Enterprise Risk Management framework, it was found that the company had not carried out a linkage business strategy with risk exposure so that the company did not know whether the company had taken enough risks or not. the company also has not paid attention to how effective internal control is to determine the point of ineffectiveness of the action plans that have been prepared. The company also has not set an appetite for target achievement and the risks it faces. External and internal issue and the company context of the company are also managed using different methods and stakeholers so that there is no alignment of information and management between these three governance strategies, risk and performance management. The weighting process is carried out using the Analytical Hierarchy Process (AHP) method. Main data collection is done from expert at PT. XYZ (senior manager and manager). After analysis and weighting, there are 18 KPIs, 6 key risks, each of which is complemented by its KRI and KCI. By implementing this RBPMS, it is aimed that the company will be able to determine a more appropriate strategy by considering the achievement of KPI performance, risk exposure from KRI, and the effectiveness of internal controls through KCI. This research is limited to proposing a new performance management design using a risk-based performance management system framework combined with an analytical hierarchy process to weight KPIs for PT. XYZ as one of Indonesian livestock equipment manufacturers. text
institution Institut Teknologi Bandung
building Institut Teknologi Bandung Library
continent Asia
country Indonesia
Indonesia
content_provider Institut Teknologi Bandung
collection Digital ITB
language Indonesia
topic Manajemen umum
spellingShingle Manajemen umum
Hadiyanto, Haris
PROPOSED RISK-BASED PERFORMANCE MANAGEMENT SYSTEM (RBPMS): INTEGRATING STRATEGY, RISK, AND PERFORMANCE A CASE STUDY OF INDONESIAN MANUFACTURING COMPANY
description An increasingly competitive environment requires company to maintain company performance to achieve company goals. To improve company performance, the company needs a suitable and unique strategy and a sound enterprise risk management (ERM) implementation to face an era full of uncertainty and high volatility. Many studies have examined the impact of implementing ERM on company performance, but only a few researchers have integrated ERM, company performance, and strategy management. The integration between strategy, risk and performance management is focused on evaluating the company's strategy in detail and carefully by considering three important indicators according to each strategic objective. This study aims to design and implement the integration between strategic, risk and performance management using the Risk-Based Performance Management System (RBPMS) in the case study of PT. XYZ with a focus and limitations on two strategic themes for internal processes, which is the innovation process and operation excellence. PT. XYZ is a livestock equipment manufacturing company in Indonesia and has dozens of both national and international competitors. This research will begin with problem exploration using interviews to understanding the company issue, selecting a performance management system framework, specifically RBPMS, determining key performance indicators (KPI) and their weighting, assessing key risk of the company, determining key risk indicators (KRI) and key control indicators (KCI), and aligning risk-taking to strategy evaluation by considering the performance, risk, and control condition (red-yellow-green color indicator). The KPI, KRI, and KCI will be presented in the results of this study to integrate strategic, risk, and performance management to make it easier for PT. XYZ to conduct strategy evaluations. The main cause of the problem is the unalignment management of strategy, risk and performance. Through a gap assessment with the COSO Enterprise Risk Management framework, it was found that the company had not carried out a linkage business strategy with risk exposure so that the company did not know whether the company had taken enough risks or not. the company also has not paid attention to how effective internal control is to determine the point of ineffectiveness of the action plans that have been prepared. The company also has not set an appetite for target achievement and the risks it faces. External and internal issue and the company context of the company are also managed using different methods and stakeholers so that there is no alignment of information and management between these three governance strategies, risk and performance management. The weighting process is carried out using the Analytical Hierarchy Process (AHP) method. Main data collection is done from expert at PT. XYZ (senior manager and manager). After analysis and weighting, there are 18 KPIs, 6 key risks, each of which is complemented by its KRI and KCI. By implementing this RBPMS, it is aimed that the company will be able to determine a more appropriate strategy by considering the achievement of KPI performance, risk exposure from KRI, and the effectiveness of internal controls through KCI. This research is limited to proposing a new performance management design using a risk-based performance management system framework combined with an analytical hierarchy process to weight KPIs for PT. XYZ as one of Indonesian livestock equipment manufacturers.
format Theses
author Hadiyanto, Haris
author_facet Hadiyanto, Haris
author_sort Hadiyanto, Haris
title PROPOSED RISK-BASED PERFORMANCE MANAGEMENT SYSTEM (RBPMS): INTEGRATING STRATEGY, RISK, AND PERFORMANCE A CASE STUDY OF INDONESIAN MANUFACTURING COMPANY
title_short PROPOSED RISK-BASED PERFORMANCE MANAGEMENT SYSTEM (RBPMS): INTEGRATING STRATEGY, RISK, AND PERFORMANCE A CASE STUDY OF INDONESIAN MANUFACTURING COMPANY
title_full PROPOSED RISK-BASED PERFORMANCE MANAGEMENT SYSTEM (RBPMS): INTEGRATING STRATEGY, RISK, AND PERFORMANCE A CASE STUDY OF INDONESIAN MANUFACTURING COMPANY
title_fullStr PROPOSED RISK-BASED PERFORMANCE MANAGEMENT SYSTEM (RBPMS): INTEGRATING STRATEGY, RISK, AND PERFORMANCE A CASE STUDY OF INDONESIAN MANUFACTURING COMPANY
title_full_unstemmed PROPOSED RISK-BASED PERFORMANCE MANAGEMENT SYSTEM (RBPMS): INTEGRATING STRATEGY, RISK, AND PERFORMANCE A CASE STUDY OF INDONESIAN MANUFACTURING COMPANY
title_sort proposed risk-based performance management system (rbpms): integrating strategy, risk, and performance a case study of indonesian manufacturing company
url https://digilib.itb.ac.id/gdl/view/74282
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