REPUTATION DEVELOPMENT STRATEGY FOR CORPORATE OPERATING IN INDUSTRIAL ESTATE.

Author:Sarjana, Sri
Position:Report - Abstract
 
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INTRODUCTION

Research Background

Business conditions are down due to economic conditions (Nainggolan, 2016). The adverse effects of the 2008 global financial crisis resulted in the general weakening of business activities and the collapse of public companies (Hidayat & Meiranto, 2014). Development of industrial estates in Indonesia is still lagging compared to new industrialized countries such as South Korea and Thailand (Kwanda, 2000). Batamindo Industrial Estate is currently being abandoned by big companies and many companies are moving to other industrial estates due to the low order and high business competition (Zunara & Fatyandri, 2017). The development of industrial estate is considered less effective and inefficient because it is less useful for local people (Syahruddin, 2010). The company is experiencing financial difficulties if the company has performance that shows negative earnings, negative net income and negative book value of equity (Brahmana, 2007). Many companies tend to face liquidity difficulties as indicated by the decreasing ability of firms to fulfill their obligations (Hanifah, 2013).

The development of industrial estate is in harmony with preconditions or ideal conditions required for purpose of industrial development to be achieved (Soerjono, 2017). Industrial estates is an area dominated by industrial activities that have combination of various facilities including plant equipment, research facilities and laboratories for development, offices, banks, social facilities and public facilities (Dirdjojuwono, 2004). The purpose of industrial estate development is direction of industrial estate development to encourage industrial development through development of industrial location (Sagala et al., 2004). Large and medium manufacturing industry companies in 2010-2015 have increased (Suhariyanto, 2016). Industrial development plays important role in promoting economic growth, with one percent economic growth that can absorb workforce of one hundred thousand people (Soeling, 2007).

Some previous studies have similarities in use of dimensions to measure the influence of corporate identity of each indicator referred. Similarities in the utilization of dimensions in testing this study include Ishtiaque et al. (2006); Kitchen et al. (2013). According to Ishtiaque et al. (2006) developed corporate strategy, communication and culture. Abratt & Kleyn (2012) is also used similarity strategy. This research develops communication strategy in describing the characteristics (Ishtiaque et al., 2006; Kitchen et al., 2013), strategy (Abratt & Kleyn, 2012), communication (Pishdar et al., 2014; Perez & del-Bosque, 2014) and culture (Kitchen et al., 2013).

The adverse effects of 2008 global financial crisis resulted in general weakening of business activities and collapse of public companies (Hidayat & Meiranto, 2014). Batamindo industrial estate is now less attractive area for big companies, even many companies are moving to other industrial estates due to absence of orders and high business competition (Zunara & Fatyandri, 2017). The company faces financial difficulties when company have performance that shows negative operating profit, negative net income and negative book value of equity (Brahmana, 2007). Many companies tend to experience liquidity difficulties as indicated by decline in the company's ability to meet obligations (Hanifah, 2013). Business conditions are down due to economic conditions (Nainggolan, 2016). The development of industrial estates in Indonesia is still lagging compared to new industrialized countries such as South Korea and Thailand (Kwanda, 2000).

LITERATURE REVIEW

Corporate reputation is an assessment with support of individual or collective organizational identity built on trust (Agarwal et al., 2015), subjective and collective recognition, perceptions, attitudes and evaluation of organization over time between all stakeholders involved and based on certain aspects of organizational quality, past behavior, communication, symbols and potential to meet future expectations (Sontaite-Petkeviciene, 2014), employee, customer, stakeholder, supplier, government, media, competitors and community assessment (Erkmen & Esen, 2014), estimates global perceptions of different stakeholders about the company, evaluated through series of dimensions and attributes to create value related to organization (Olmedo-Cifuentes et al., 2014), strategic success factors and deserve attention in complex business environments (Vitezic, 2011), multi-stakeholder concepts reflected in perception that stakeholders have organizations (Balderelli & Gigli, 2014), elements related either directly or indirectly with the company's stakeholders (Mattera & Baena, 2012).

This study uses the definition of corporate reputation concept from Agarwal et al. (2015); Olmedo-Cifuentes et al. (2014). Expert opinion is used as basis in this study because the definition developed has dimensional equation on corporate reputation variables such as products and services, vision and leadership and financial performance that has similarities with Agarwal et al. (2015). The concept of corporate reputation is developed in construct that corporate reputation is assessment and perception of company in industrial estate based on products and services (Olmedo-Cifuentes et al., 2014; Vitezic, 2011), vision and leadership (Agarwal et al., 2015; Balderelli & Gigli, 2014), financial performance (Mattera & Baena, 2012; Balderelli & Gigli, 2014) and innovation (Olmedo-Cifuentes et al., 2014).

Corporate identity as multidimensional concept consisting of various aspects of company such as business strategy, philosophy for executives, corporate culture, corporate behavior and design (Ishtiaque et al., 2006), a set of attributes that demonstrate the way in which organization engages itself directly with external public (Kitchen et al., 2013), patterns of beliefs, values and emotions formed in specific interaction between society and its environment in context of organizational culture (Kianinasab & Ebrahimi, 2015).

This research uses definition of concept for corporate identity from Ishtiaque et al. (2006); Kitchen et al. (2013). In the opinion of Ishtiaque et al. (2006) are used because definition developed has similar concept of corporate identity such as corporate strategy, communication and culture. The concept of corporate identity according to Abratt & Kleyn (2012) is also used in this study because it has similarity of dimension is strategy. The concept of this research develops concept of corporate identity which means that corporate identity is communication strategy in describing the characteristics of corporate by utilizing behavior (Ishtiaque et al., 2006; Kitchen et al., 2013), strategy (Abratt & Kleyn, 2012), communication (Pishdar et al., 2014; Perez & Del-Bosque, 2014) and culture (Kitchen et al., 2013).

CSR is company's interest in improving balance between corporate and community growth to achieve sustainable development (Kim et al., 2017), firm commitment to maximize prosperity both economically, socially and environmentally in long term through business practices, policies and resources (Fatma et al., 2016), process with aim of embracing responsibility for corporate action and promoting its impact through environmental activities for consumers, employees...

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