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Exploring the Linkages Between Deming’s Principle, World-Class Company, Operational Excellence, and Company Performance in an Oil and Gas Industry Setting Wakhid Slamet Ciptono
Gadjah Mada International Journal of Business Vol 7, No 2 (2005): May-August
Publisher : Master in Management, Faculty of Economics and Business, Universitas Gadjah Mada

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (1680.011 KB) | DOI: 10.22146/gamaijb.5577

Abstract

This study explores the linkages between Deming’s Principle, World-Class Company, Operational Excellence, and Company Performance in the Indonesia’s oil and gas industry. The aim of this study is to examine the causal relationships model between the Deming’s Principle (DP), World-Class Company (WCC), Operational Excellence (OE), and Company Performance (Monetary Gain Performance or MGP and Value Gain Performance or VGP). The author used 140 strategic business units (SBUs) in 49 oil and gas companies in Indonesia. The survey was administered to every level of management at each SBU (Top, Middle, and Low Level Management). A multiple informant sampling unit is used to ensure a balanced view of the relationships between the research constructs, and to collect data from the most informed respondents on different levels of management. A total of 1,332 individual usable questionnaires were returned thus qualified for analysis, representing an effective response rate of 50.19 percent. Path analysis and structural equation modeling (SEM) are used to analyze the effect of Deming’s principle on company performance and to investigate the interrelationships between Deming’s principle, world-class company, operational excellence, and company performance. The results show that Deming’s Principle has significant positive and indirect effect on company performance (monetary gain performance and value gain performance). Although the Deming’s Principle has no significant direct effects on company performance, the Deming’s Principle has significant positive effects on the intervening variables (world-class company and operational excellence). The result also shows that a complete model fit and the acceptable parameter level that indicate the overall parameter are good fit between the hypothesized model and the observed data. By concentrating on a single industry (oil and gas), SEM specification of the causal relationship model between five constructs can be more complete and specific because unique characteristics of the oil and gas industry can be included (upstream and downstream chain activities). Finally, the particular design of the research and the findings suggest that the structural model of the study has a great potential for replication to manufacturing as well as service operations.
Hierarchical level oF managers’ abilities: A Moderator between Quality Management Practices and Company Financial Performance Wakhid Slamet Ciptono
Gadjah Mada International Journal of Business Vol 9, No 3 (2007): September - December
Publisher : Master in Management, Faculty of Economics and Business, Universitas Gadjah Mada

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (430.012 KB) | DOI: 10.22146/gamaijb.5591

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This study investigates the moderating impacts of hierarchical level of managers’ abilities on the form and strength of all structural relationships between quality management practices and company financial performance. This study describes the structural relationships among the research constructs —six critical factors of quality management practices (quality improvement program, supervisory leadership, supplier involvement, management commitment, training to improve products/services, cross-functional relationships); the contextual factors of oil and gas companies—world-class performance in operations (world-class company practices, operational excellence practices, company non-financial performance); and company financial performance. It uses a sample of 1,332 managers in 140 strategic business units (SBUs) within 49 oil and gas companies operating in Indonesia. The empirical results indicate that the goodness-of-fit of the unconstrained model is much better than that of the constrained model, and this is an indicator that hierarchical level of managers’ abilities moderates all structural relationships among the research constructs. Hence, the hierarchical level of managers’ abilities acts as a moderating variable of the whole model (i.e., among critical factors of quality management practices, world-class company practices, operational excellence practices, company non-financial performance, and company financial performance). It means that the major contribution of the hierarchical level of managers’ abilities is how to make changes in the organizational system. Top level managers’ abilities are deemed the most capable of making significant changes because of their broad sources of power and influence. Conversely, lower level managers’ abilities find it more difficult making significant changes in the system because of bureaucratic control processes that limit their actions —powerlessness or a chronic lack of autonomy. Compared to the hierarchical level of managers’ abilities, the degree of autonomy may be a more comprehensive contribution in reference to managers’ abilities to influence an organizational system. Autonomy may not only act as a person enhancer to increase internal work motivation, but it may also serve to moderate the extent to which individuals are able to significantly influence a system. In addition, involvement and empowerment of all organizational members (including managers) in cooperative and collaborative (interactive) efforts to achieve quality improvements appear to be a key element to TQM. Results further reveal that world-class performance in operations (world-class company practices, operational excellence practices, and company non-financial performance) positively mediates the impact of critical factors of quality management practices on company financial performance. Results also point out that three out of six critical factors of quality management practices are positively associated with world-class company practices and operational excellence practices under the moderating of hierarchical level of managers’ abilities. World-class company practices and operational excellence practices have direct and significant effects on company non-financial performance. Furthermore, empirical results suggest that there is a positive and significant relationship between company non-financial performance and company financial performance.
A SEQUENTIAL MODEL OF INNOVATION STRATEGY—COMPANY NON-FINANCIAL PERFORMANCE LINKS Wakhid Slamet Ciptono
Gadjah Mada International Journal of Business Vol 8, No 2 (2006): May - August
Publisher : Master in Management, Faculty of Economics and Business, Universitas Gadjah Mada

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (411.801 KB) | DOI: 10.22146/gamaijb.5617

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This study extends the prior research (Zahra and Das 1993) by examining the association between a company’s innovation strategy and its non-financial performance in the upstream and downstream strategic business units (SBUs) of oil and gas companies. The sequential model suggests a causal sequence among six dimensions of innovation strategy (leadership orientation, process innovation, product/service innovation, external innovation source, internal innovation source, and investment) that may lead to higher company non-financial performance (productivity and operational reliability). The study distributed a questionnaire (by mail, e-mailed web system, and focus group discussion) to three levels of managers (top, middle, and first-line) of 49 oil and gas companies with 140 SBUs in Indonesia. These qualified samples fell into 47 upstream (supply-chain) companies with 132 SBUs, and 2 downstream (demand-chain) companies with 8 SBUs. A total of 1,332 individual usable questionnaires were returned thus qualified for analysis, representing an effective response rate of 50.19 percent. The researcher conducts structural equation modeling (SEM) and hierarchical multiple regression analysis to assess the goodness-of-fit between the research models and the sample data and to test whether innovation strategy mediates the impact of leadership orientation on company non-financial performance. SEM reveals that the models have met goodness-of-fit criteria, thus the interpretation of the sequential models fits with the data. The results of SEM and hierarchical multiple regression: (1) support the importance of innovation strategy as a determinant of company non-financial performance, (2) suggest that the sequential model is appropriate for examining the relationships between six dimensions of innovation strategy and company non-financial performance, and (3) show that the sequential model provides additional insights into the indirect contribution of the individual dimensions of innovation strategy (partially mediators) to company non-financial performance —productivity or operational reliability. The findings provide empirical evidence extending the previous model of Zahra and Das. These findings also provide a basis for useful recommendations to upstream and downstream SBU managers attempting to implement a sequential model of innovation strategy —company non-financial performance links. This study shows that upstream SBUs rely on external innovation sources. They will acquire innovation policies through business partnership development (such as Joint Operation Body for Enhanced Oil Recovery or JOB-EOR, Joint Operation Body for Production Sharing Contract or JOB-PSC); licensing agreements (Technical Assistance Contract or TAC, Consortium Cooperation System); or acquisition with other firms (Joint Operating Contract or JOC). In contrast, downstream SBUs emphasize on generating internal innovation sources to develop their own in-house R&D efforts. The downstream SBUs should make extensive policies of internal innovation sources in their attempts to control the distribution of oil-based fuel and transmission of natural gas for domestic and international markets effectively. Both policies would enhance understanding and ultimately contribute to the improvement of company financial performance —sales, net profit margin, return on assets.
An Investigation of Hayes and Wheelwright’s Practices: Empirical Evidence from The Indonesia’s Oil and Gas Industry Wakhid Slamet Ciptono
Jurnal Siasat Bisnis Vol. 11 No. 1 (2006)
Publisher : Management Development Centre (MDC) Department of Management, Faculty of Business and Economics Universitas Islam Indonesia

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Abstract

The research extracts sixty seven Hayes and Wheelwright’s practices from the Hayes and Wheel-wright’s six principles. These items formed the basis of a questionnaire sent to over 2800 managers at the SBUs level in the Indonesia’s oil and gas companies. The empirical result indicates that All Hayes and Wheelwright’s six principles collectively have positive impact on an overall construct that may be termed world-class company (WCC). Result also points out that Hayes and Wheelwright’s six principles can be reduced into four meaningful factors) of world-class company—as operations strategies—for the Indonesia’s oil and gas industry— Workforce skills and capabilities, Management technical competence, Competing through quality, and Workforce participation. These meaningful factors of WCC were shown to be reliable and valid, and offer new insights into the understanding of operations strategy implementation in an oil and gas industry.Based on the oil and gas managers (the SBU level), operations strategies (four meaningful factors of WCC) can be viewed as the effective use of production and operations capability and technology for achieving business and corporate goals. Operations strategy, therefore, is to help a company’s operations organization define the common ground where it can play a proactive and collaborative role with other company functions or cross-functional relationships (Hayes et al., 1996).  Oil and gas managers in Indonesia can use these meaningful factors in concert with other critical qual-ity management practices to help them in there word-class company initiatives. Researchers can also use these factors to build structural model linking such factors to various organizational performance measures (i.e., Critical Success Factors of TQM, Operational Excellence, Six Sigma Quality Management, and Good Corporate Governance).Keywords: Hayes and wheelwright’s six principles, Hayes and Wheelwright practices, World-Class Company.
Pengaruh integrasi, berbagi informasi, dan penundaan pada kinerja rantai pasokan: Studi pada usaha kecil menengah batik di Indonesia Ihwan Addin Mufaqih; Nurul Indarti; Wakhid Slamet Ciptono; Anny Kartikasari
Jurnal Siasat Bisnis Vol 21, No 1 (2017)
Publisher : Management Development Centre (MDC) Department of Management, Faculty of Business and Economics Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/jsb.vol21.iss1.art2

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Penelitian ini bertujuan menguji pengaruh praktik-praktik rantai pasokan yang terdiri dari integrasi pemasok, integrasi internal, integrasi pelanggan, berbagi informasi, dan penundaan (postponement)) terhadap kinerja rantai pasokan. Survei menggunakan kuesioner dilakukan pada 102 UKM Batik, di Surakarta dengan teknik purposive. Hasil penelitian menunjukkan bahwa secara keseluruhan praktik-praktik rantai pasokan berpengaruh terhadap kinerja rantai pasokan. Integrasi internal dan berbagi informasi merupakan praktik-praktik yang berpengaruh positif pada kinerja rantai pasokan. Sementara itu, integrasi pemasok dan integrasi pelanggan tidak berpengaruh pada kinerja rantai pasokan. Menariknya, studi ini menemukan bahwa penundaan berpengaruh negatif terhadap kinerja rantai pasokan.
An Alternative to Optimize the Indonesian’s Airport Network Design: An Application of Minimum Spanning Tree (MST) Technique Luluk Lusiantoro; Wakhid Slamet Ciptono
Gadjah Mada International Journal of Business Vol 14, No 3 (2012): September-December
Publisher : Master in Management, Faculty of Economics and Business, Universitas Gadjah Mada

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (382.808 KB) | DOI: 10.22146/gamaijb.5477

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Using minimum spanning tree technique (MST), this exploratory research was done to optimize the interrelation and hierarchical network design of Indonesian’s airports. This research also identifies the position of the Indonesian’s airports regionally based on the ASEAN Open Sky Policy 2015. The secondary data containing distance between airports (both in Indonesia and in ASEAN), flight frequency, and correlation of Gross Domestic Regional Product (GDRP) for each region in Indonesia are used as inputs to form MST networks. The result analysis is done by comparing the MST networks with the existing network in Indonesia. This research found that the existing airport network in Indonesia does not depict the optimal network connecting all airports with the shortest distance and maximizing the correlation of regional economic potential in the country. This research then suggests the optimal networks and identifies the airports and regions as hubs and spokes formed by the networks. Lastly, this research indicates that the Indonesian airports have no strategic position in the ASEAN Open Sky network, but they have an opportunity to get strategic positions if 33 airports in 33 regions in Indonesia are included in the network.     
A CAUSAL RELATIONSHIP BETWEEN QUALITY MANAGEMENT PRACTICES, SUPPLY-CHAIN PRACTICES, DEMAND-CHAIN PRACTICES, AND COMPANY PERFORMANCE: EVIDENCE FROM THE INDONESIA’S OIL AND GAS INDUSTRY Wakhid Slamet Ciptono
Journal of Indonesian Economy and Business (JIEB) Vol 21, No 1 (2006): January
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (935.635 KB) | DOI: 10.22146/jieb.6494

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Studi ini mengembangkan suatu hubungan kausal antara lima konstruk penelitian QualityManagement Practices (QMP), Supply-Chain Practices (SCP), Demand-Chain Practices (DCP), CompanyPerformance (Value-Gain Performance atau VGP dan Monetary-Gain Performance atau MGP) denganmenggunakan Structural Equation Modeling (SEM)—studi kasus pada industri migas di Indonesia. Modelkonseptual penelitian ini merupakan kolaborasi dari berbagai penelitian sebelumnya yang terkait denganenam dimensi praktik manajemen kualitas berbasis Deming’s 14 points sebagai variabel independen,manajemen rantai pasokan yang terintegrasi (sektor hulu dan sektor hilir migas) sebagai variabel mediator,dan kinerja perusahaan (non keuangan dan keuangan) sebagai variabel dependen.Berdasarkan model struktural akhir menunjukkan paraktik manajemen kualitas (QMP) memilikipengaruh positif lebih besar ke praktik rantai pasokan (SCP) daripada ke praktik rantai permintaan (DCP).QMP berpengaruh langsung ke kinerja non keuangan perusahaan (VGP) dan tidak berpengaruh langsungke kinerja keuangan perusahaan (MGP). QMP juga berpengaruh tidak langsung ke MGP melalui SCP,DCP, dan VGP. DCP berpengaruh langsung lebih besar ke VGP daripada ke MGP, sedangkan SCP hanyaberpengaruh langsung ke VGP. Hasil hubungan kausal antar lima konstruk penelitian memberikangambaran bahwa perusahaan migas di Indonesia perlu mempertimbangkan kinerja non keuangan (VGP)untuk meningkatkan kinerja keuangan perusahaan (MGP). Sebagai contoh kaitannya dengan ketepatanwaktu pasokan dan dsitribusi merupakan faktor kunci untuk perbaikan secara sistemik.Hasil model struktural akhir didukung oleh nilai X2/df, GFI, AGFI, CFI, RMR, RMSEA, P, ECVIyang secara simultan menunjukkan the best fit to the data. Hasil ini memberikan kontribusi bahwa modelpenelitian ini sangat berpotensi untuk dilakukan studi replikasi baik untuk industri manufaktur maupunjasa. Penelitian berikutnya perlu membuktikan persamaan dan perbedaan antara industri manufaktur danjasa melalui model struktual dari industri migas di Indonesia. Bagi pihak manajemen perusahaan migas diIndonesia, hasil penelitian ini bisa digunakan untuk membuat skala prioritas perbaikan terpadu. Sebagaicontoh dengan penerapan UU Migas yang baru UU (Nomor 22/2001), bagaimana suatu perusahaan migasmampu mengoptimalkan perannya (sektor hulu atau sektor hilir atau kombinasi keduanya) denganmenyeimbangkan orientasi kebijakan peningkatan kinerja berbasis non keuangan (VGP) dan keuangan(MGP) secara simultan.Keywords: Quality Management Practices, Supply-Chain Practices, Demand-Chain Practices, Value Gain Performance, and Monetary Gain Performance
APPLICATION OF DELPHI METHOD IN PRIORITIZATION OF CRITICAL SUCCESS FACTORS OF TQM FOR THE INDONESIA’S OIL AND GAS INDUSTRY Wakhid Slamet Ciptono
Journal of Indonesian Economy and Business (JIEB) Vol 20, No 3 (2005): July
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.22146/jieb.6575

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The study describes the use of the policy Delphi method in building consensus for theprioritization of critical success factors of TQM (CSFs of TQM). The use of multi attributedecision analysis for supporting the qualitative data analysis (multifactor evaluationprocess, analytic hierarchy process, and NVivo) has been considered the foremosttechnique for examining the manages needs and the weightings of preferences from thepanel of managers for each CSFs of TQM in the most objective way available. Two roundof Delphi surveys were conducted. A significant consensus on the weighted evaluation ofthe six CSFs of TQM and the consistency ratio were obtained from twenty managers. Theresults vividly reveal that the Delphi method is a powerful and appropriate technique forderiving objective opinions in a rather subjective area such as the multi-attribute model for the prioritization of the CSFs of TQM.The results of qualitative data analysis (using MFEP) indicate that training to improveproducts/services provides the first priority (the weighted evaluation 0.184; 0.224; and0.169 for top level managers, middle kevel managers, and low level managers); followed by Quality Improvement, Top Management Commitment, Supplier Involvement, Cross-Functional Relationships among SBUs, and Supervisory Leadership.In addition, the qualitative data analysis (using AHP) also provides a set of sufficientlyconsistent CSFs of TQM was obtain after the second round of Delphi questionnaire. Theresult of consistency ratio (CR) shows that the managers had highly satisfactory inassessing the prioritization of CSFs of TQM (CR = 0.0456). Therefore, these CSFs of TQMwere supported the results from the quantitative data analysis.Oil and gas managers in Indonesia can use these qualitative data results in concertwith other critical quality management practices to help them in there word-class company initiatives. The researcher recommended the use of Delphi method as an objective and rigorous determining consensus. Researchers can also use this method to combine qualitative and quantitative research approaches into mixed methodology or triangulation.Keywords: Delphi Method, Qualitative Data Analysis, Critical Success Factors of TQM,Multifactor Evaluation Process, Analytic Hierarchy Process, and NVivo.
RE-CODE YOUR CHANGE DNA: THE RHENALD KASALI’S VIEWS ON THE ORGANIZATIONAL CHANGE MANAGEMENT Wakhid Slamet Ciptono
Journal of Indonesian Economy and Business (JIEB) Vol 22, No 4 (2007): October
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (212.826 KB) | DOI: 10.22146/jieb.37187

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There is nothing permanent except change” (Greek Philosopher Heraclitus, 500 B.C.). In today’s truly global economy and global climate change, all organizations find themselves part of the era of dynamics change—change is the only constant in today’s technology-driven world. Change can be an opportunity as well as danger:” Rapid change means rapid obsolescence of one’s skills and competencies, unless champion efforts are made to update and maintain them through change management.” The purpose of change management (champions of change) is to help leaders learn how to change not only an organization’s strategy, structure, and operations; but also the perceptions, expectations, the thinking and behavior, and performance of people (elite and grass-root society)—and to change all these elements in ways that keep them focused and consistent (Nadler, 1998). Today’s organization leaders attest to its success through re-code their change DNA. Immensely valuable to managers at all levels, Rhenald Kasali, provides the practical advice and real-life examples that can help people become effective leaders of organizational change or reformation (solution-based leadership) through his book “Re- Code Your Change DNA. DNA, the useful acronym for Deoxyribo Nucleic Acid, is the “code” used within cells to form proteins. It is a living organism’s basic building block; such as, it controls biological destiny. Key to an organization’s operating destiny is its organizational DNA— the structural, management, and operating protocols that exist within the organizations (both public and business). For most utilities, their DNA developed over several decades in a predictable regulatory environment, with low turnover of key leaders and a continuing pattern of promotion from within. In recent years, market dynamics caused and influx of new management talent into the industry, bringing new thinking, behaviors, and values. Recoding an organization’s change DNA to adapt to a differently defined and structured market can increase institutional agility, accelerate readiness for external change (adaptability), and enable sustained the alignment of financial leadership (Spiegel et al., 2005). Kasali describes together the conceptual or theory and the contextual or reality and practice—whether the challenge is renewal of fundamental change or reformation, his book delivers real life depictions that will help those who invest the time to change successfully. Kasali’s descriptions of the practices re-code your change DNA is not without its minor flaws. He seems to have trouble in measuring the key performance indicators more generalizability and rigorous after recoding our change DNA (how to measure the thinking and behavior changes’ indicator), leaving the reader a bit confused. But there is more to praise than criticize in this excellent book. All in all, Re-Code Your Change DNA is a solid description of the organizational change management, its benefits, and how it can be effectively deployed. The author knows the subject matter and communicates it effectively and well. Readers will have to attune to the author’s views on the organizational change management while reading this book
AN EXPLORATORY STUDY ON THE REAL-TIME STRATEGIC FACTORS OF CORPORATE REAL ESTATE ASSET MANAGEMENT [CREAM] PRACTICES: EVIDENCE FROM INDONESIAN COMPANIES Wakhid Slamet Ciptono; Budi Wiryawan
Journal of Indonesian Economy and Business (JIEB) Vol 16, No 2 (2001): April
Publisher : Faculty of Economics and Business, Universitas Gadjah Mada

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (342.825 KB)

Abstract

Memasuki era transformasi (reformasi) nasional dan otonomi daerah, organisasi publik dan bisnis Indonesia dituntut untuk mampu mengembangkan daya saing, efisiensi, dan keefektifannya guna melakukan proses perubahan secara kreatif dan berkesinambungan (sustainable). Setiap organisasi perlu membangun strategi perubahan secara proactive dan interactive (real-time strategic) untuk menjadi the leader of crisis. Studi ini menjelaskan penerapan real-time strategic dengan memotret praktik manajemen aset bangunan perusahaan (corporate real-estate asset management or CREAM) di Indonesia. Dengan menggunakan cluster analysis—dari 97 perusahaan yang menjadi responden—44 perusahaan (45%) berada dalam kelompok pasif, 37 perusahaan (38.10%) berada dalam kelompok selektif, dan 16 perusahaan (16.50%) berada dalam kelompok aktif. Hal ini menunjukkan potret perusahaan di Indonesia belum efisien dalam mengelola aset bangunannya. Dalam kondisi krisis multidimensional saat ini, berbagai kesalahan tipe I dan tipe III (mismanagement creates high level of inefficiency and high cost economy) menjadi suatu budaya yang harus segera dilakukan pembenahan secara sistematik, total, dan beorientasi pada program. Studi ini memberikan gambaran bagaimana bangsa Indonesia hijrah dari belenggu KKN (inactive and reactive strategic) menuju Indonesia Baru (a good corporate and government governance; proactive and interactive or real-time strategic) melalui corporate real estate asset management (CREAM).