Strategy and Organization
Companies operating in Indonesia are currently facing some strategic issues. Among the most dominant issues are growth and corporate governance
Even under competitive pressure, growth is mandatory for companies as the most important way to survive in the long run. Two options are available: organic and anorganic growth. Organic growth requires company to look beyond their traditional markets, invest in new skills, or even redefine their strategic focus. These are daunting tasks. Anorganic growth, on the other hand, relies on merger, acquisition, and alliance. It may look compelling at first. However, the fact says three out of four mergers fail to deliver expected results. This shows how difficult the post-merger management is.
Some people may claim that meeting corporate governance standards will divert significant amount of resources, and hence, lower profitability. However, Skha argues that companies with excellent governance ratings will attract investors and lower some of their costs.
We believe that in time, companies will be evaluated on corporate governance just as they are rated on business performance metrics. Those adhere to the standard will be rewarded, those who fail to comply will eventually run into trouble and get punished by their stakeholders.