Management Practice, Firm Size and Performance of Family Business: Indonesian Experience

Ambarriani, Anastasia Susty and Purwanugraha, Heribertus Andre (2012) Management Practice, Firm Size and Performance of Family Business: Indonesian Experience. International Journal of Economic Policy in Emerging Economies, 5 (4). pp. 1-16. ISSN 1752-0452

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Abstract

In the case of Indonesia, family businesses have remained important during the country’s years of fast economic growth. One of the reasons for the collapse is the businesses’ failure to apply appropriate management practices. Batik is one of the most important (if not the most important) family business industries in Indonesia. This study attempts to enrich our understanding of the characteristics of management practices, the extent to which the practices are being applied and their implications on performance of family firms within the Batik industry in Indonesia. Data was gathered through interviews owner or director of the individual family firms of the Batik Industry in the Central Java Region (Yogyakarta, Bantul, Solo, and Klaten) by using questionnaire (self-administered questionnaire). This study suggests that for the individual family firm of batik industry especially in Central Java to survive and grow, they need not only to improve its performances but also try to have more concern of their management processes to support their activities in term of financing, administration, and operational activities. It would be benefit for them to use technological capabilities to improve their performance also.

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