THE IMPLEMENTATION OF RISK MANAGEMENT AND ITS EFFECT ON GOOD COOPERATIVE GOVERNANCE AND SUCCESS
https://doi.org/10.22146/jieb.28570 Sugiyanto Sugiyanto(1*), Anggi Andriani Rahayu(2)
(1) Master of Management, Institut Manajemen Koperasi Indonesia
(2) Master of Management, Institut Manajemen Koperasi Indonesia
(*) Corresponding Author
Abstract
The Cooperative success must be support by Good Cooperative Governance and implementation of risk management. This study identifies risk management, especially in savings and loan cooperatives, and to test and prove empirically the effects of the implementation of risk management on good cooperative governance and the cooperative success. The research method used a descriptive quantitative analysis and saturation sampling techniques; while the size of the population was 73 persons, consisting of various cooperatives’ boards of directors, supervisors, managers, and administrators. The primary data needed in this study were obtained by using a survey method which involved questionnaires and conducting structured interviews. This study uses a statistical approach by using path analysis. The result of this study shows that two categories of risks can be identified, which are minor and insignificant risks. A minor risk includes the credit risk and strategic risk, and an insignificant risk includes six risks: market risk, liquidity risk, operational risk, legal risk, reputation risk and compliance risk. Based on the statistical analysis, the indication is that there is no effect from the implementation of risk management on a cooperative’s success, but there is an effect from the implementation of risk management on good cooperative governance, and good cooperative governance has an effect on a cooperative’s success. Indirectly, a cooperative’s success is not influenced by the implementation of risk management, but it is influenced by the implementation of risk management through good cooperative governance as an intervening variable.
Keywords
Full Text:
PDFReferences
Ariff, M. S. B. M., Zakuan, N., Tajudin, M. N. M., Ahmad, A., Ishak, N., & Ismail, K. (2014). A framework for risk management practices and organizational performance in higher education. Review of Integrative Business and Economics Research, 3(2), 422.
Ahmed, I., & Manab, N. A. (2016). Influence of enterprise risk management framework implementation and board equity ownership on firm performance in Nigerian financial sector: An initial finding. IOSR Journal of Business and Management (IOSR-JBM), 18(1), 61-68.
Buallay, A., Hamdan, A., & Zureigat, Q. (2017). Corporate governance and firm performance: evidence from Saudi Arabia. Australasian Accounting, Business and Finance Journal, 11(1), 78-98.
Danoshana, S., & Ravivathani, T. (2013). The impact of the corporate governance on firm performance: A study on financial institutions in Sri Lanka. Merit Research Journal of Accounting, Auditing, Economics and Finance, 1(6), 118-121.
Djohanputro, Bramantyo. (2008). Risiko korporat terintegrasi [Integrated corporate risk]. Jakarta: PPM.
Dominic, Ochoi Ong’ondo and Florence Memba. (2015). Effect of corporate governance practices on financial performance of public limited companies in Kenya. International Journal of Management and Commerce Innovations, 3 (1), 122-132.
Dorfman, Mark. S. (2007). Introduction to risk management and insurance. Englewood Cliffs, New Jersey: Prentice Hall.
Dülfer, E., and Laurinkari, J. (1994). International handbook of cooperative organizations. Germany: Vandenhoeck & Ruprecht.
Fadun, O. S. (2013). Risk management and risk management failure: Lessons for business enterprises. International Journal of Academic Research in Business and Social Sciences, 3(2), 225.
Gray, E.W. andC.F. Larson. (2006). Project management: The managerial process (3rd ed.). New York: McGraw-Hill.
Hanel, A. (1985). Basic aspects of cooperative organizations and policies for their pro-motion in developing countries. Selbstverl.
______. (2005). Organisasi koperasi [Organization of cooperatives]. Yogyakarta: Graha Ilmu.
Hillson, D., and Murray-Webster, R. (2004). Understanding and managing risk attitude. In Proceedings of 7th Annual Risk Conference, held in London, UK (Vol. 26). Retrievedfrom, http://www.kent.ac.uk/ scarr/events/finalpapers/Hillson%20%2B%20MurrayWebster.pdf.
Indroes Ferry, N. (2008). Manajemen risiko perbankan [Risk management in banking]. Jakartat: PT. Raja Grafindo Persada.
Komite Nasional Kebijakan Governance (KNKG). 2006. Pedoman umum good corporate governance Indonesia [A guideline for Good Corporate Governance: Indonesia]. Indonesia: KNKG.
Lam, J. (2014). Enterprise risk management: from incentives to controls. New Jersey: John Wiley andSons, Inc.
Mohammed, H. K., and Knápková, A. (2016). The impact of total risk management on company's performance. Procedia-Social and Behavioral Sciences, 220, 271-277.
Muhamad, Zakir., Djayani Nurdin, Nurhayati Haris and Sulaeman Miru. (2017 The effect of risk management and good corporate governance on financial performance and its impact on the firm value. IOSR Journal of Business and Management, 19 (5), 94-105.
Otoritas Jasa Keuangan. (2016). Peraturan Otoritas Jasa Keuangan No. 18 Tahun 2016 Tentang Penerapan Manajemen Risiko Bagi Bank Umum [Financial Service Authority regulation no. 18 year 2016: Implementation of risk management for conventional banks]. Jakarta.
Pearce, J. A., Robinson, R. B., and Subramanian, R. (2000). Strategic management: formulation, implementation, and control. Columbus: McGraw-Hill.
Ping, T. A., & Muthuveloo, R. (2015). The impact of enterprise risk management on firm performance: Evidence from Malaysia. Asian Social Science, 11(22), 149..
Pradana, Yana Ayu. (2014). Application of risk management to the realization of good corporate governance at company insurance. Trikonomika, 13 (2), 195-2014.
Putra, A., & Simanungkalit, R. M. (2014). The Impact of Implementation Good Corporate Governance to Firm Value (Evidence from Indonesia Public Banking Sector). Review of Integrative Business & Economic Research, 4(1), 95-102.
Rejda, E., G. (2003). Principles of risk management and insurance. New York: Pearson Education Inc.
______. (2011). Introduction to risk management and insurance (11th ed.). Upper Saddle River, NJ: Prentice Hall.
Santoso, D. (2008). Kegagalan penerapan good corporate governance pada perusahaan publik di Indonesia [Failures of implementing good corporate governance in Indonesian public corporations]. Jurnal Hukum IUS QUIA IUSTUM, 15(2).
Shad, M. K., & Lai, F. W. (2015). Enterprise risk management and firm performance validated through economic value added factors. International Journal of Economics and Statistics, 3, 148-154.
Tahir, I. M., & Razali, A. R. (2011). The Relationship between enterprise risk management (ERM) and firm value: Evidence From Malaysian public listed companies. International journal of economics and management sciences, 1(2), 32-41.
Todorovic, I. (2013). Impact of corporate governance on performance of companies. Montenegrin Journal of Economics, 9(2), 47.
Yilmaz, C., & Buyuklu, A. H. (2016). Impacts of Corporate Governance on Firm Performance&58; Turkey Case with a Panel Data Analysis. Eurasian Journal of Economics and Finance, 4(1), 56-72.
Wenk, D. (2005). Risk Management and Business Continuity. Overview and Perspective Journal of the Chartered Insurance Institute, 3(3), 234-246.
Williamson, Oliver E. (1985). The economic institutions of capitalism. New York: The Free Press.
DOI: https://doi.org/10.22146/jieb.28570
Article Metrics
Abstract views : 26956
| 
views : 14742
Refbacks
- There are currently no refbacks.
Copyright (c) 2018 Journal of Indonesian Economy and Business
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
| Journal of Indonesian Economy and Business |
| The Journal of Indonesian Economy and Business (print ISSN 2085-8272; online ISSN 2338-5847) is published by the Faculty of Economics and Business Universitas Gadjah Mada, Indonesia. The content of this website is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License |
| © 2019 Journal of Indonesian Economy and Business | Visitor Statistics |