Governance Practices and Organizational Performance: A Study on Village-Owned Enterprises in Riau Province, Indonesia

Proceedings of The 13th International Conference on Modern Research in Management, Economics and Accounting

Year: 2021

DOI:

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Governance Practices and Organizational Performance: A Study on Village-Owned Enterprises in Riau Province, Indonesia

Ria Nelly Sari, Dewi Junita, Rita Anugerah, and Satria Tri Nanda

 

ABSTRACT: 

This study aims to investigate the effect of implementing governance principles on organizational performance. This is a quantitative study conducted on Village-Owned Enterprises which is a hybrid social enterprise in Indonesia. The governance principles of Village Owned Enterprises are slightly different from corporate governance in general. As a social enterprise with a social mission, the governance of village-owned enterprises is based on the principles of being transparent, accountable, cooperative, participative, emancipative and sustainable.  Data was collected by using a questionnaire that was sent to 391 Directors of Village Owned Enterprises in Riau Province, Indonesia. A total of 125 responses were returned and then analyzed by using WarpPLS 5.0. The findings show that the implementation of governance principles of Village-owned Enterprises has an effect on organizational performance. This research contributes to the field of management accounting at Village Owned Enterprises. To be able to improve organizational performance Village Owned Enterprises must carry out governance practices properly. This will enact the organization run effectively so that organizational goals can be achieved.

keywords: governance, organizational performance, village-owned enterprises, WarpPLS; Indonesia.