JRSSEM 2022, Vol. 02, No. 5, 884 – 888

E-ISSN: 2807 - 6311, P-ISSN: 2807 - 6494

DOI: 10.36418/jrssem.v2i05.349 https://jrssem.publikasiindonesia.id/index.php/jrssem

LITERATURE REVIEW : DECENTRALIZATION ANALYSIS IN

IMPROVING MANAGERIAL PERFORMANCE

Sri Trisnaningsih

Deni Ariadi

1.2

UPN Veteran East Java Faculty of Economics and Business, Indonesia

e-mail: trisna.ak@upnjatim.ac.id, deniariadi@gmail.com

*Correspondence: trisna.ak@upnjatim.ac.id

Submitted

: 28

November 2022

Revised

: 17

December 2022

Accepted

: 27

December 2022

Abstract: In the era of the digital economy 4.0 competition in the world of technology and

information is increasing, today companies are required to maintain human resources in order

to decentralize and evaluate performance in a contiunity manner in order to make the right

decisions. In the study, the goal is to analyze more deeply about decentralization in improving

manjerial performance. Researchers use the literature review approach, which is a systematic,

explicit and reproducible method to identify, evaluate and synthesize the work of research

results and the results of thoughts that have been produced by researchers and practitioners.

The review literature aims to make an analysis and synthesis of existing knowledge related to

the topic to be studied in order to find a blank space for the research to be carried out. The

data source used by the author is in the form of secondary data, where the researcher uses 4

articles obtained from the google scholar database. The results of this study suggest that

decentralization is useful for making a positive contribution to management performance, this

is because decentralization is a process of delegation of responsibilities and authorities starting

from upper level management to lower level management. Decentralization has a very

important role for management because it is able to be considered to be able to help

management in the right and efficient decision-making process, so that managers have the

initiative to take action to solve problems that arise so that the decision making can be done

quickly and precisely.

Keywords: Decentralization; Improving Managerial Performance.

Sri Trisnaningsih

Deni Ariadi

| 885

DOI: 10.36418/jrssem.v2i05.349 https://jrssem.publikasiindonesia.id/index.php/jrssem

INTRODUCTION

Economic growth in the current era

tends to be very dynamic, this is also offset

by competition in a very complex world of

work. Decentralization is a company's effort

in increasing human resources in making

the right decisions, decentralization

according to experts Hendry Maddick

(1963) also revealed that his views on the

meaning of decentralization which is a legal

handover of power to be able to handle

certain areas or functions to autonomous

regions. Meanwhile, according to

Dwinarian, asnawi and sanggenafa

Decentralization is a delegation of

responsibilities and authorities from upper

level management to lower management

so that the workload of upper level

management is reduced and will focus

more on their work.

PT. Financial Statement

Manipulation Scandal. Kimia Farma Tbk. PT

Kimia Farma is one of the government-

owned drug manufacturers in Indonesia. In

the audit dated December 31, 2001, the

management of Kimia Farma reported a net

profit of Rp 132 billion, and the report was

audited by Hans Tuanakotta & Mustofa

(HTM). However, the Ministry of SOEs and

Bapepam considered that the net profit was

too large and contained elements of

engineering. After a re-audit, on October 3,

2002 the financial statements of Kimia

Farma 2001 were re-presented (restated),

because a fairly basic error was found. In

the new financial statements, the profit

presented was only Rp 99.56 billion, or

lower at Rp 32.6 billion, or 24.7% of the

initial reported profit. The error arose in the

Raw Material Industry unit, namely errors in

the form of overstated sales of IDR 2.7

billion, in the Central Logistics unit in the

form of overstated inventory of IDR 23.9

billion, in the Pharmaceutical Wholesaler

unit in the form of overstated inventory of

IDR 8.1 billion and overstated sales of IDR

10.7 billion.

Misrepresentations relating to

inventory arise because the value that is in

the inventory price list is inflated. PT Kimia

Farma, through its production director,

published two master prices on February 1

and 3, 2002. The list price as of February 3

has been inflated in value and used as the

basis for inventory valuation in the

distribution unit of Kimia Farma as of

December 31, 2001. Meanwhile, the

misrepresentation related to sales is to do

double recording of sales. The double

recording was carried out on units that

were not sampled by the accountant, so

they were not successfully detected. Based

on Bapepam's investigation, it was stated

that the KAP that audited PT Kimia Farma's

financial statements had followed the

applicable audit standards, but failed to

detect the fraud. In addition, the KAP was

also not proven to help management

commit the fraud.

In the world of work, problems

will always arise, of course, due to changes

in the work environment that are very

dynamic, this change is of course also

followed by increased competition, of

course, the management is required to

innovate to stricter management controls,

this requires decentralization and work

evaluation in order to demystify and

prevent abuse of authority from each part

of a company.

Based on the explanation above,

886 | Literature Review : Decentralization Analysis In Improving Managerial Performance

researchers are interested in studying and

researching using literary studies with the

title of decentralized analysis research in

improving managerial performance, using

the formulation of the problem, namely

how decentralization analysis in improving

managerial performance.

MATERIALS AND METHODS

This type of research is a review

literature according to Yuhertiana (2015)

research with a literature review approach

in it contains summaries, reviews, and

thoughts of the author by reviewing various

documents, such as government

publications, academic publications, laws

and regulations, journals, books, news, and

other records that have relevance to a topic

discussed. The first step that needs to be

done is planning or planning, where

researchers survey several scientific articles,

journals or proceedings, and other

literature that is in accordance with the

purpose of writing this article. In this first

step, researchers conducted a survey to

understand decentralization analysis in

improving managerial performance

through the results of previous studies that

mentioned the relationship between

decentralization and managerial

performance.

The second step is to conduct a

review, where the researcher observes the

presence or absence of relevance of each

literature used in order to obtain

satisfactory review results and in

accordance with the title taken. In this

study using secondary data, this is because

the data was obtained by researchers from

journals and internet sites so that data

collection was not carried out directly. The

literature in this study uses Google Scholar

and Google search to obtain data using the

keywords "Decentralization", and

"Managerial Performance". Based on

searches on google scholar and google

search researchers found 4 articles selected

based on 2017-2022, as for the 4 articles

used by researchers as a source of literature

spread over the background and discussion

of research results. The third step is

reporting, where researchers pour out the

results of literature studies that have been

analyzed using the systematics of writing

scientific articles.

RESULTS AND DISCUSSION

1. Research from Dessy Gheofani with

the title The influence of

decentralization and management

accounting systems on managerial

performance Concluded that partial

decentralization has a significant

effect on managerial performance

in PT. Auxano Pekanbaru is because

decentralization is a broader

concept and relates to how far top

management delegates authority.

The results of the study partially

show that decentralization affects

managerial performance in

universities. Auxano Pekanbaru.

2. Research from Willy Nurhayadi with

the title The influence of

decentralization, Perception of

environmental uncertainty, public

accountability, organizational

culture on managerial performance

through a management accounting

887 | Title of Paper

system which concluded that the

results of the study partially showed

that decentralization affects

managerial performance through a

management accounting system in

hospitals in Banten province.

3. Research from Asriani Hasan with

Analysis of the Influence of

decentralization and management

accounting systems on Managerial

performance which concludes that

the results of the study partially

show that decentralization affects

managerial performance so that it

can be used by management for

decision making.

Research from Alifiah Wulansari Mustofa

and Sri Trisnaningsih entitled Literature

Study: The role of decentralization in

improving management performance

which concludes that decentralization is

able to have a positive influence on

managerial performance. Decentralization

is defined as the delegation of

responsibility and authority from upper

management to lower level management.

Decentralization has an important role in

the company, where decentralization can

speed up the decision-making process and

provide motivation to managers at various

levels to improve their performance which

will have an impact on improving company

performance. In addition, decentralization

can provide convenience in the process of

collecting and utilizing information, so that

upper management has no obstacles in the

process of formulating strategic planning

and decision making. From the description

above, the researcher explained that in

increasing competition in the business

world and to overcome its problems, the

management needs to take

decentralization steps to detect problems

that arise so that the management is able

or able to make the right and efficient

decisions

CONCLUSIONS

Based on what has been explained

above from the results of the study, the

author implies that decentralization is

useful for making a positive contribution to

management performance, this is because

decentralization is a process of delegation

of responsibilities and authorities starting

from upper level management to lower

level management. Decentralization has a

very important role for management

because it is able to be considered to be

able to help management in the right and

efficient decision-making process, so that

managers have the initiative to take action

to solve problems that arise so that the

decision making can be done quickly and

precisely.

REFERENCES

Nurhayadi, Willy. (2017). The influence of

decentralization, Perception of

environmental uncertainty, public

accountability, organizational culture

on managerial performance through

a management accounting system:

Sultan Ageng Tirtayasa University.

Gheofani, Dessy. (2021). The influence of

decentralization and management

accounting systems on managerial

888 | Literature Review : Decentralization Analysis In Improving Managerial Performance

performance: National Seminar on

Multidisciplinary Scientific Papers,

Vol.1No.1 August 2021, Pp. 217 – 225.

Hasan, Asriani. (2020). Analysis of the Effect

of decentralization and management

accounting systems on Managerial

performance: Journal of Politala

Accounting Research, Vol 3 No.1 June

2020, PP. 11 – 16.

Hasan, Asriani. (2020). Analysis of the Effect

of decentralization and management

accounting systems on Managerial

performance: Journal of Politala

Accounting Research, Vol 3 No.1 June

2020, PP. 11 – 16.

Mustofa Wulansari, Alifiah (2022).

Literature Study : The role of

decentralization in improving

management performance : Rifle

Proceedings, Vol 2 No.1 May 2022,

Pp. 28 – 35.

Submitted

for possible open access

publication

under the terms and conditions of the

Creative Commons Attribution (CC BY SA)

license

(https://creativecommons.org/licenses/by-

sa/4.0/).