2014 International Symposium on Technology Management and Emerging Technologies (lSTMET 2014), May 27 - 29, 2014,
Bandung, Indonesia
Strategy Tools Usage in Indonesia:
A Survey of Indonesia Managers
Oni Bibin Bintoro, Jam Hidajat
School of Business Management
Institute Technology Bandung.
Bandung, Indonesia
Abstract-This paper is based on Indonesia survey on the use of
strategy tools in Indonesia companies. The research described in
this paper is a survey of Indonesia manager and Executive MBA
students who completed a paper survey into the use of strategy
tools within their organizations. This paper reports the result of a
survey conducted with 143 Executive MBA students at School of
Business Management, Institute of Technology Bandung ( SBM
ITB) from 2 campuses: Bandung campus and Jakarta campus,
Indonesia.
The purpose of the survey was to explore the strategy tools used
in Indonesia companies. A self-report questionnaire inquiring on
company strategic planning process practices was distributed.
The respondents of executive MBA student, each represents a
contributor of strategy team at companies in Indonesia. The data
were examined to identify popular strategy tools and techniques
utilized in company strategic planning. The data exposed that
Indonesia companies essentially engaged in extensive used of
strategy tools. Many of traditional strategy tools and techniques
prevalent in strategic management literature were used in the
process. Realistic implications of the contextual nature
companies' strategic planning process are discussed.
Keywords-Strategy Tools; Strategic Planning; Executive
MBAstudent; Strategy Survey; Indonesia Companies;
I. INTRODUCTION
Many studies have recognized that strategy tools have been
developed over the years to facilitate strategic decision making
[3] [6] [7] [12]. It is also recognized that the most common
strategy analysis tools used were well known and relatively
simple [3]. The popularity of strategy tools appear to be based
on teaching these strategy tools in the business schools and on
their relative ease of application in practice. This study also
vital to identify the strategic planning tools utilized in these
companies' activities. Since many companies have a high
failure rate, information from this study might prove valuable
in helping such company understand and apply the strategy
tools successful strategic planning process practices of
increasing profitable businesses to their company situations.
An empirical study in Saudi Arabia revealed that the most
regularly used strategy tools and techniques were
benchmarking, analysis of critical success factors and
sensitivity analysis, followed by product life cycle, SWOT and
stakeholder analysis [2]. Researchers investigated the use of
strategy tools and techniques in Jordanian companies which
978-1-4799-3704-2/14/$31.00 2014 IEEE
were listed on the Amman Stock Exchange, the key results of
the research that the managers of these companies had an
understanding of most of the strategy tools and techniques
surveyed that the use of strategy tools and technique related
more to the company's size and less on the age and nature of
the business [1].
-
II. STRATEGY TOOLS AND TECHNIQUES
A. Strategy Tools
The term "strategy tool" is used here to include the full
range of concepts, ideas, and techniques and approaches that
structure or influence strategy and management activity. This
study is concerned with how managers use these strategy tools
as they carry out strategy activity. Some of the strategy tools
within the scope of the paper are benchmarking, SWOT
analysis, the balanced scorecard, porter's 5 forces, core
competence and resource-based approaches.
of
Some findings from survey conducted by Bain and Co that
on average companies use twelve strategy tools [ll]. Study in
[11] argue that the global recession definitely has influenced on
management tool use in 2008, both in the number and kinds of
tools executives used, because strategy tool usage declined,
with companies employing an average of 11 tools, down from
12 tools in 2000 and from 15 tools in 2006. Another survey
found that strategy tool use to be a normal part of strategy
workshops [3]. Strategy tools are also a key module of typical
MBA strategy course and decision making teaching and
continue to be supported in practitioner-oriented strategy
literature [5].
The extensive use of the familiar and relatively simple
strategy tools by enthusiastic managers can be partially
explained by Knott's study in [7], based on interviews with
practicing managers, where "management fads" and "tool
skepticism" appeared common. Reference [7] put forward that
the strategy tools are used more for facilitation,
communication, and for the inclusion of managers in strategy
interactions, rather than for their main purpose or analysis.
Although there are several standardized strategic planning
tools available for use, literature shows that traditional planning
methods have changed to reflect the needs of organizations
these days. It is recognized that current strategic planning has
different features than top-down hierarchy processes of the
1960's and 1970's. [4]. Now, strategic planning is seen as a
417
factor that is able to improve integrated different capabilities,
internal communication, and coordinate organizational
activities across functional areas [4]. TABLE! . SAMPLE OF DEMOGRAPHIC .
No Respondents percentage
B. Research question Total 143 100.0
Male 100 69.9
Based on the gaps in the literature, mainly in large Female 43 30.1

companies, this study investigated what kinds of strategy tools, Age (median) 31.46

and techniques are needed for large companies to accomplish Years of Work experiences 6.94
success. The study accounted here is an effort to evaluate the 0-5 years 63 44.1
5-10 years 31 21.7
Indonesia companies and identify the types of strategy tools > 10 years 36 25.2

and techniques they employ. The explicit research questions in Experience with strategic planning
this study were: Head of SP team 12 8.4
Member of SP team 47 32.9
Contributing to the SP process 70 49.0
Research Question: What types of strategy tools and Awareness of the SP process 52 36.4

techniques are used in these Indonesia companies? level of involvement with strategic planning process
Corporate 52 36.4
Subsidary 16 11.2
Departmental 59 41.3
Other 26 18.2
III. METHODOLOGY
The turnover of organization
less than Rp 5 Billion 12 8.4
A. Setting, Sample and Data Collection Rp 5 Billion - Rp 500 Billion 20 14.0
more than Rp 500 Billion 111 77.6
This study was designed with quantitative approach and a
No of empfyees in organization
survey questionnaire was initially conducted, followed by Fewer than 250 employees 21 14.7

semi-structured interviews with 23 managers of 2 Indonesia between 250 - 3000 employees

more than 3000 employees
34
91
23.8
63.6
large companies. The nature of this research is descriptive, and
Ownership structure
to address these issues we used a survey consisting of a closed SME 21 14.7
State Owned Enterprise 40 28.0
ended questionnaire with a 7 - point Likert scale. In order to be Large Private IMNC 82 57.3

able to generalize conclusions, we have used a large and

diverse sample. The sample consisted of manager of
organization connected to School of Business Management,
C. The use o/Strategy Tools in Indonesia companies
Institute of Technology Bandung (SBM - ITB), either through
teaching or research links. All respondents received a paper This study used various strategy tools and techniques in
format of survey and were invited to answer either by strategic planning. The results indicate that the use of strategy
completing the attached questionnaire. The data were gathered tools with the strategy tools within the strategic planning
by means of a survey of 143 managers and strategy planning process is very popular. However, not many of the participants
contributor from the Indonesia companies. In particularly, a utilized many of the traditional tools and techniques explained
self-report questionnaire was developed to collect data on the in the strategy literature. Some of popular strategy tools were
strategy development processes, tools, and techniques used in used. The most common consideration in strategy making
company strategic planning and administered to the process was making a financial profit. All respondents did
participants. include Dyson's (2007) comprehensive strategic planning
B. Data Analysis process as a part of their planning process, all did intentionally
The total number of response received was 145 and formally.
questionnaires; a number of people may not have participated
due to their lack of experience or involvement with the strategy
development process in their organizations. Additionally, 2
questionnaires were excluded from the analysis due to
incomplete responses. The responses cover a wide mix of
respondents work for Indonesia companies. The result indicate
that the survey is a cross industry, with responses from
different sectors. The majority of the respondents were directly
participated in the strategic planning process in their
organizations. And also the majority of respondents came from
large organizations.

418
TABLE II. THE USE OF STRATEGY TOOLS IN INDONESIA that a certain number of strategy tools or strategy planning
COMPANIES, N=143 EXECUTIVES OF INDONESIA COMPANIES.
method is best for Indonesia companies was far from true in
Rank Tool/Technique used Rate 1 to 7 No of executives
this investigation.
Mean frequencies
Benchmarkinq 5.15 133 B. FUTURE RESEARCH
Cost Benefit Analysis 5.03 128
Risk Analysis 4.80 126 The recommended step of the study should explore the
SWOT (TOWS) analysis
Core Competence
4.60
4.22
122
112
paradigm and types of strategy tools in Indonesia companies
Forecasting Economic model 4.02 110 utilizing a larger sample. As part of ongoing research of this
Balanced Scorecard
Gap Analysis
3.90
3.39
118
103
study, strategic planning survey will be conducted for larger
Corporate Modeling 3.21 95 sample of Indonesia companies. Furthermore, industry specific
10
11
Decision Tree Analysis
Value Chain Analysis
3.10
3.06
98
93
strategy making trends in Indonesia companies should be
12 Resource Based Planning 3.02 95 explored to establish if there is a relationship between strategy
13
14
Contingency Analysis
Visioning
2.97
2.91
94
87
making practices types and tools in certain industry sectors.
15 Cognitif Mappina 2.78 89 The result of study could prove useful in separating certain
16
17
Sensitivity Anal sis
PIMS Analysis
2.75
2.33
88
82
contextual factors that commonly face specific industries and
18 cultural and TechnoloQies 2.33 85 examine how to plan successfully for them. To examine
Porter's 5 forces
19
20 Soft System Methodology
2.28
2.10
79
74
whether formal or popular strategy tools or techniques would
21 Systems Dynamics 2.04 76 positively influence the success of companies more than their
22
23
Real option
Portofolio matrix / BeG matrix
1.88
1.82
76
73
existing practices is a significant part of study. Further research
24 Delphi 1.63 73 is required in the field of Strategy planning process and the
utilization of strategy tools within strategic planning. The
companies in this study were profitable, but, fmding out if
Some of the strategy tools and techniques used were very companies could be more profitable by utilizing certain
basic. Benchmarking, Cost Benefit Analysis, Risk Analysis, strategy tools, techniques, or hybrids could provide valuable
SWOT analysis, decision tree analysis, and sensitivity analysis insight into the linkage of strategic planning process and
were utilized by several participants. Reviewing forecasting company performance.
economic model, balanced scorecard, gap analysis and
corporate modeling were mentioned. From the respondent
interviews, Meetings, focus group, mailing list, brainstorming, ACKNOWLEDGMENT
and networking were stated as methods for strategy making
process. Most of the respondents claimed to readjust their The author gratefully acknowledges the valuable
strategies for various reasons: new direction, profit, accounts, participation of SBM ITB in this study and contribution from
and situational change and securities issues. Executive MBA student and alunmi from Class Executive
MBA Bandung Campus; X43, X44, X45, X46, X47, X48; and
Summary, most of executives of Indonesia companies in from Class executive MBA Jakarta Campus: BLEMBA 12,
this study engaged in the use of variety strategy tools. BLEMBA 13, BLEMBA 14, MBA PTFI Batch 2 and MBA
However, their methods for strategy making were different. PTFI Batch 3.
Some of the traditional strategy tools and techniques well
known in strategy making literature were not employed in full,
but some of their strategy tools applications were used during
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