International Journal of Law and Management

The role of corporate social responsibility (CSR) toward the development micro
and small and entrepreneurs using partnership and community development
program (PKBL) in Pekanbaru
Sri Indarti,
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To cite this document:
Sri Indarti, (2018) "The role of corporate social responsibility (CSR) toward the development micro
and small and entrepreneurs using partnership and community development program (PKBL) in
Pekanbaru", International Journal of Law and Management, Vol. 60 Issue: 1, pp.79-86, https://
doi.org/10.1108/IJLMA-12-2016-0167
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Micro and
The role of corporate social small and
responsibility (CSR) toward the entrepreneurs

development micro and small and

entrepreneurs using partnership 79

and community development Received 12 December 2016

Revised 29 December 2016

program (PKBL) in Pekanbaru Accepted 3 January 2017

Sri Indarti
Department of Management, Faculty of Economics, Universitas Riau,
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Pekanbaru, Indonesia

Abstract
Purpose – This paper aims to determine the roles of corporate social responsibility (CSR) or social
responsibility practiced by state-owned enterprises (SOEs) toward the development of entrepreneurial
attitude and revenue of micro and small entrepreneurs in Pekanbaru.
Design/methodology/approach – This research used quantitative analysis with t-test (different test) to
view the differences in entrepreneurial attitude and revenue before and after receiving the CSR fund through
Partnership and Community Development Program (PKBL program).
Findings – PKBL aid by a state-owned company is highly effective and helps small and micro entrepreneurs in
increasing revenue. It is seen from the significance of sales turnover and cost efficiency development. Some
positive impacts of receiving PKBL fund on the development of entrepreneurial attitude towards positivity are
significant and some are not. A significant change is found in the development of entrepreneurial attitude in the
aspect of planning and leadership that show that micro and small entrepreneurs have a plan and a good
leadership after receiving PKBL fund. There appears a significant difference before and after PKBL fund
distribution. Confidence, task orientation, risk taking and honesty dimensions show no signs of significant
difference before and after receiving PKBL fund, as they are related to someone’s nature, which is attached to
each individual, and it requires time, processes and optimal treatment to change.
Originality/value – No study has investigated the roles of CSR or social responsibility practiced by SOEs
towards the development of entrepreneurial attitude and revenue of micro and small entrepreneurs in Pekanbaru,
Riau.
Keywords CSR, Different test, PKBL
Paper type Research paper

1. Introduction
Micro- and small-sized enterprises (MSEs) became Indonesian weapon while enduring 1998
crisis. Despite being managed in a simple manner, they had already taken a major role that
time, as they served as a support and an important option for the community to live in a
more prosperous, independent state, and they helped many people by resolving
unemployment because of the following characteristics: resilient; flexible, independent, International Journal of Law and
Management
efficient (worked on by all family members) and self-financing (or family financing). Judging Vol. 60 No. 1, 2018
pp. 79-86
from the number of enterprises (units) and employment in Indonesia, MSEs play a huge role, © Emerald Publishing Limited
1754-243X
as can be seen in Table I. DOI 10.1108/IJLMA-12-2016-0167
 IJLMA Table I shows that 99.91 per cent of the business categories are MSEs and only about 1
60,1 per cent are medium- and large-sized enterprises, and therefore, it can be concluded that
MSEs develop rapidly, and huge proportion will play a great role in contributing to the
economic growth of the community, which needs economic policies that favor their business
development. Similarly, employment plays a great role as most of our workforce largely
goes to this sector, as shown in Table II.
80 Table II illustrates that MSEs provide huge employment. Micro-sized enterprises alone
even absorb 89.3 per cent of Indonesian workforce. However, judging from the productivity
standpoint, it appears that micro- and small-sized entities’ productivity remains extremely
low compared to medium- and large-sized enterprises, as shown in Table III.
Based on the condition above, on one hand, MSEs provide a big contribution in terms of
employment. Nonetheless, on the other hand, they have relatively small productivity; hence,
government needs to provide guidance through various efforts. One of such efforts is the
program deployed to state-owned enterprises (SOEs) in Indonesia through a program called
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PKBL (Partnership and Community Development Program), including education and

training activities and loans for the development of MSEs.
SOEs are obliged to lay aside 1-3 per cent of the profits to carry out corporate social
responsibility (CSR). In addition, social responsibility practiced by SOEs is very interesting
to investigate. The reaseon is the differentiating factors with non-SOEs, presence of coercive

Enterprises categories No. of enterprises (unit)

Micro-sized enterprises 50,700,000

Table I. Small-sized enterprises 520,220
Medium-sized enterprises 39,660
The number of Large-sized enterprises 4,370
business entities in Total 51,264,250
various categories or
classification in 2011 Source: Annual Report of the Department of Industry and Trade Riau, 2010

Enterprises categories No. of workers (people)

Table II.
Micro-sized enterprises 83,647,711
The number of Small-sized, medium-sized and large-sized enterprises 10,024,773
employment in Total working 93,672,484
various categories/
groups in 2011 Source: Annual Report of the Department of Industry and Trade Riau, 2010

Enterprises categories Productivity (IDR/employee)

Table III. Micro-sized enterprises Under 11.57m

Small-sized enterprises 11.57m
The labor Medium-sized enterprises 38.71m
productivity based Large–sized enterprises 2.22bn
on enterprise
category in 2011 Source: Annual Report of the Department of Industry and Trade Riau, 2010
 instruments such as government policy, imperative in nature, the implementation of CSR is Micro and
mandatory for SOEs. In fact, it is highly likely that the potential of social donation from small and
SOEs is larger than that from private companies. The social role of SOEs is outlined by
Ministerial Decision of State-Owned Enterprises No: Kep-236/MBU/2003. The decision
entrepreneurs
issued by the Minister of State-Owned Enterprises in principle is to organize the partnership
program and the community development program (CSR).
CSR practices in SOEs are not optimal indeed, based on the results of reviews and
interviews conducted by the researcher. The position of SOEs is twofold: they serve as a 81
business institution and social institution. The weaknesses are as follows:
 There are restrictions on the objects of aids.
 PKBL requires the distribution of direct aids from SOEs without the presence of a
third party as a companion; therefore, institutional capacity strengthening rarely
happens for institutions that should have been partners.
 Most social assistance from SOEs to community is still caricature in nature, simply
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a short-term donation, instead of leading to optimal sustainability and

empowerment of the community. In fact, the partnership program designed to
empower generally just provides financial capital without being accompanied by an
increase for the beneficiaries.
 Obscurity in relationship mechanism between units organizing then CSR activities,
without coordination and integrative.
 The management of social programs in SOEs is too bureaucratic.
 The absence of blue print in the majority of SOEs is related to the implementation of
social assistance.

PKBL is one of the causes, because the imperative nature of the program comes from the
Ministry of SOEs, and the companies think that they are only activity organizers.
Several aforementioned weaknesses lead to non-optimal implementations of CSR in
SOEs. Therefore, repairs and improvements need to be made from the Ministry of SOEs, be
it in terms of policies, programs or mechanisms of CSR implementation, so that CSR
becomes really helpful for the company, both in short and long terms. For the community,
the impact of socio-economic life or society welfare; and government are to increase national
or local revenue.
Based on the results on the distribution of PKBL fund to PT. Jasa Raharja (Ltd.), the
MSEs’ total delinquents from fund rolled out is shown in Table IV.
The data above show considerable delinquency. Data indicate that there are many
issues/constraints endured both by SOEs as the fund distributor and the entrepreneur (the
community) as the users of fund. Therefore, a common ground is required to make PKBL
fund distribution compatible with its mission, as a form of concern from SOEs in helping the
government to reduce poverty and increase community revenue surrounding the company.

Payments as of Payments received Table IV.

Year distribution of funds June 2012 as of June 2012 Delinquent as of June 2012 The delinquent of the

Distribution 2000-2010 9,057,664,939 8,498,500,227 559,164,712

partners as of June
Total 10,280,804,939 9,772,036,892 558,768,047 2012 in PT Jasa
Raharja (Ltd.) of Riau
Source: Jasa Raharja (2012) (Persero) province branch
 IJLMA The considerable fund is necessary to evaluate the extent of their use for the MSEs. Does the
60,1 fund make MSEs increase or grow? What are the constraints or problems in the distribution
of the fund? Based on those mentioned, this research is aimed to determine the roles of CSR
or social responsibility practiced by SOEs towards the development of entrepreneurial
attitude and revenue of MSEs in Pekanbaru. Furthermore, the research is aimed to examine
the differences between entrepreneurial attitude and revenue before and after receiving CSR
82 fund through PKBL Program.

2. Literature review
Social responsibility or also called as CSR is defined as the corporate commitment to act
ethically, operate legally and contribute toward the improvement of economy alongside the
improvement of life quality for the employees and their families, local community and the
society in a broad sense. CSR can also be defined as business commitment to contribute to
sustainable economic development and to cooperate with employees of the company, their
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families, local communities and the society as a whole (Fox et al., 2002 in Budimanta et al.,
2004). Thereby, CSR is directed either inside (internal) or outside (external) companies.
Inside, the responsibilities are directed to shareholders in the form of profitability and
growth and to employees to provide compensation according to the principles of justice.
Meanwhile, outside, CSR is related to the role of companies as taxpayers aimed to improve
the welfare and competence of the public and preserve the environment for the benefit of
future generations.
CSR, which is now commonly implemented by many companies, has undergone a
metamorphosis since its introduction. This concept did not appear easily. There were
several stages before its hype grew bolder. When the industry developed after the industrial
revolution, most companies still focused themselves simply as profit-seeking organizations.
They deemed that donations to communities were good enough to be given in the form of
employment, the fulfillment of community needs through their products and the payment of
taxes to the State. As time went by, the community also demanded social responsibility, as
they saw economic disparities between business actors and the surrounding communities.
The company operations also had a negative impact, such as resource exploitation and
environmental destruction around their operating sites. Such view then underlies the most
traditional concept of CSR.
Joseph Schumpeter in Bygrave (1994) stated that Entrepreneur as the person who
destroys the existing economic order by introducing new products and services, by creating
new forms of organization, or by exploiting new raw materials. Therefore, entrepreneurs are
people breaking the existing economic system by introducing new goods and services and
creating a new organization or business organization. These people do business through
existing businesses. In the book titled The Portable MBA inn Entrepreneurship, a definition
is given, broader than the definition given by Joseph Schumpeter: Entrepreneur is the person
who perceives on opportunity and creates an organization to persue it (Bygrave, 1994).
Therefore, an entrepreneur is a person who sees an opportunity and then creates an
organization to take advantage of the opportunity. The notion of entrepreneur here is
stressed on each person starting a new business. Meanwhile, the entrepreneurial process
includes all functions and actions required to pursue and utilize opportunities by creating an
organization.
In the opinion of Drucker (1985), entrepreneurship is the economic activity that moves
economic resources from low to high productivity region and greater outcome. Such
definition has been developing to date; hence, Drucker concludes that entrepreneurship is
the ability of a person to create a product that is mediocre at first, but with the application of
 managerial concepts and managerial techniques (asking which value useful for customers), Micro and
product standardization, process and equipment design, taking a basis on training of work small and
analysis to be performed and setting the desired standards, it is able to improve existing
resources and create new markets and customers.
entrepreneurs
Based on the opinion of Drucker, it can be noted that not all new businesses, small and
privately owned, are included as entrepreneurship; rather, the ability to improve the
productivity is called entrepreneurship. Kao (1991) also mentions entrepreneurship as a
process, process of creating something new (new creation) into something different from 83
the previous ones (innovation). The goal is achievement of individual welfare and added-
value to the community.
Ebert and Griffin define that small business is a business owned and managed
independently, and these small businesses do not dominate the market. These small
businesses are not part or subsidiary of another company. The one running the business is
the owner himself, who works freely according to his ability. Populist Economist Program is
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a set of activities in the Regional Revenue and Expenditure Budget prepared upon the
interests of development and directed to economic actors, cooperatives and small- and
medium-sized enterprises (SMEs), including micro-enterprises (Zulkarnain, 2005). The
bravery to launch the populist economics system as an economic system must be
accompanied by various actions and alignments as the economic actors of this system have
many weaknesses, in terms of human resources quality, financing, technology mastery or
market network mastery, including resulting production quality, which leads to low
competitiveness. Therefore, various strategic measures are highly needed so that populist
economics can grow reasonably. First is the reinforcement to the formal juridical order, be it
in the form of laws, government regulation, presidential decree or presidential decree,
including regional regulations that may provide support, protection and certainty for actors
of populist economics. Second is reinforcement in terms of KUKM financing, be it in the form
of funding from banking institutes and non-bank financial institutions, as well as the
distribution of microfinance institutions that is able to touch the all-weak conditions of SMEs.
Third is strengthening the improvement of the quality of human resources as economic
actors of the people in the form of sustainable education and training and distributed to the
rural level to gradually improve their skills in the business. Fourth is strengthening the
control of market network and essential partnerships. In this context, it needs the mastery of
networks and integrated market information to make products salable, either locally,
nationally, regionally and internationally. Partnerships should no longer be false; rather, they
should be based on the interests of all parties in cooperation and on principle of partnership:
mutually beneficial, mutually reinforcing and interdependent. It also must be supported by
adequate and binding legislation as implemented by other nations in undertaking this
conception. Fifth is the existence of a strong and consistent political will from the government
to bring the goal of promoting and establishing populist economics into reality, and it
certainly should be carried out truthfully and well-programmed.
Aloysius Gunadi Brata notes that SMEs are an essential part of an economy of a nation or
region, including Indonesia. As an illustration, despite its contribution in the national output
(GDP), which is only 56.7 per cent, and only 15 per cent in non-oil export, SMEs contribute to
around 99 per cent of enterprises in Indonesia, and they have 99.6 per cent share in the
employment (Kompas, 14.12.2001). However, in reality, SMEs have only received less attention.

3. Methodology
The scope of the study on fund distribution from CSR toward the attitude and revenue
development of MSEs in Riau province was to select three state-owned companies that
 IJLMA distribute fund from PKBL program in Pekanbaru, namely, PT. Jasa Raharja, PT. Angkasa
60,1 Pura and PT. Pegadaian in Riau region. Meanwhile, the material study scope included a
review on PKBL beneficiaries from 2012 to 2013. The population and sample in this research
were the MSEs as partners of several SOEs in Riau province, with all major branches
located in Pekanbaru. The entrepreneurs also received guidance through attitude training
and entrepreneurial development from these SOEs. In this case, the population was
84 consisted of 155 small- and micro-sized enterprises, and samples taken in this research were
95 SMEs. The consideration of this sampling was based on the reachable distance and
location. This research used quantitative analysis with t-test (different test) to view the
differences in entrepreneurial attitude and revenue, before and after receiving the CSR fund
through the PKBL program.

4. Result and discussion

The results of different test analysis (t-test) on eight variables are presented below: planning,
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confidence, task orientation, risk-taking, leadership, honesty, revenue and costs (Table V).
Based on the table above, on the planning variable, planning after receiving the PKBL
fund is significantly different from planning before receiving PKBL fund (p-value < 0.05),
meaning that the provision of PKBL fund, which is previously accompanied by training on
entrepreneurial attitude, has affected changes in attitude associated with the planning
process. Therefore, respondents plan their business growth, either in terms of obtaining
inputs, processes or related to output and marketing of their products. It can be seen from
the table above, before PKBL, there are 42 respondents who did not do the planning in their
activities, but after PKBL, there is a deduction, i.e. only 5 respondents did not do planning in
their business activities. It signifies that PKBL fund is able to make them do the planning
properly.
In confidence variable, results of different tests state that there are no significant
differences in the confidence of SMEs entrepreneurs before and after receiving PKBL fund
(p-value > 0.05), as seen from the finding above, where the negativity after receiving PKBL
fund is even greater than prior to receiving PKBL fund. In other words, PKBL fund is not
able to improve their confidence; instead, it creates a greater feeling of concern, as they
encounter greater challenges with greater business. It is because confidence is in the nature
of a person that takes relatively long time to change.
In the variable of task orientation, the analysis shows that there are no significant
differences in SME entrepreneurs before and after receiving PKBL fund in terms of
orientation to tasks (p-value > 0.05). It means that fund provision is not able to change their
attitude, from not task-oriented into task-oriented, although there are differences where the
negativity decreases after receiving PKBL fund, in comparison with prior to PKBL fund

No. First variable 1 Second variable P-value Information

1 PRS PRB 0.000 Significant

2 PDS PDB 0.152 Not Significant
3 OPTS OPTB 0.815 Not Significant
4 PRIS PRIB 0.289 Not Significant
5 KPS KPB 0.001 Significant
Table V. 6 KJS KJB 0.124 Not Significant
Results analysis 7 Income after PKBL Income before PKBL 0.000 Significant
different test 8 Cost after PKBL Cost before PKBL 0.001 Significant
 (a decrease from ten to eight respondents). According to the writer, it resembles confidence Micro and
in one’s self. This attitude is even instilled in a person; thus, it takes a long time to change small and
this mentality and a strong desire is required to be successful through hard work.
Judging from variable of risk-taking, PKBL fund is not able to change the attitude of
entrepreneurs
employers in the courage to take risks, meaning that there is no significant difference before
and after receiving fund from SOEs to SMEs in terms of risk-taking (p-value > 0.05). The
test results also demonstrate that after receiving the PKBL fund, the negativity is even
greater than before receiving PKBL fund.
85
In the variable of leadership, the result shows that the leadership before and after PKBL
funds has significant differences. There is a noticeable difference or increase in positive
attitude or decrease in negative attitude, from 29 respondents to 8 respondents (p-value <
0.05). It means that the indicators instilled in a leader become better as the guidance done
before funding is useful. It is compatible with the managerial concept, including leadership,
which is science that can be learned and applied by anyone to become a leader, in addition to
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the informal leadership taking place in relatively small organization, and well-developed
communication.
In honesty variable, the result shows that that there is no significant difference for
honesty dimension owned by SMEs before and after receiving PKBL fund (p-value >
0.05), although there is a decrease in the negativity, from 18 respondents to 9
respondents. It means that loan is often defined as non-absolute grants that must be
returned as self-awareness, that the loan is a revolving fund that can be utilized by
others. In terms of revenue variable, as reflected by the sales obtained by the
entrepreneurs, there is a significant difference (p-value < 0.05), meaning that by the use
of PKBL fund, the entrepreneurs can increase sale, especially an increase in turnover in
bigger range that affects increasing revenue. In terms of cost variable, it shows
significant cost difference before and after PKBL fund (p-value < 0.05), meaning that
entrepreneurs are becoming more efficient in the use of fund. It will affect the profit for
the entrepreneurs.

5. Conclusions and recommendation

Based on the analysis of study on impacts of distribution of CSR fund (PKBL Program) on
the development of attitude and revenue of MSEs in Pekanbaru, the following conclusions
can be made:
 PKBL program aid conducted by SOEs is highly effective and helps MSEs in
increasing revenue. It is seen from the significance in sales turnover and cost
efficiency development.
 The positive impacts from receiving PKBL fund on the development of
entrepreneurial attitude towards positivity are seen; some are significant and some
are not.
 A significant change is found in the development of entrepreneurial attitude in the
aspect of planning and leadership that show that MSEs have a plan and a good
leadership after receiving PKBL fund. There appears a significant difference before
and after PKBL fund distribution.
 Confidence, task orientation, risk-taking and honesty dimensions show no sign of
significant difference before and after receiving PKBL fund, as it is related to
someone’s nature, which is attached to each individual, and it requires time,
processes and optimal treatment to change.
 IJLMA Recommendations for this study are:
60,1  The PKBL program needs to be continued, but the mechanism of selecting business
actors who will receive it must be evaluated.
 Attitude guidance is needed, through intensive training and guidance, which is
more oriented to honesty (awareness to refund the loan so that SOEs would not
suffer delinquency), the courage to take risks, confidence and to be task-oriented, all
86 of which are important factors for the success of these entrepreneurs.
 A special department is needed to handle PKBL program. It should not be done by
SOE employees because it will overlap with their regular jobs so that the target of
CSR will be carried out properly.

Fostering partnership with other institutions in the implementation of PKBL, starting from
planning, implementation and evaluation, which are properly integrated.
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References
Budimanta, A., Prasetijo, A. and Rudito, B. (2004), “Corporate social responsibility”, Jawaban Bagi
Model Pembangunan Indonesia Masa Kini, Jakarta, ICSD.
Bygrave, W.D. (1994), The Portable MBA in Entrepreneurship, John Wiley and Sons.
Drucker, P.E. (1985), Innovation and Entrepreneurship, McGraw Hill Book, New York, NY.
Fox, S., Spector, P.E. and Miles, D. (2002), “Counterproductive work behavior (CWB) in response to job
stressors and organizational justice: some mediator and moderator tests for autonomy and
emotions”, Journal of Vocational Behavior, Vol. 59 No. 1, pp. 291-309.
Jasa Raharja, P.T. (2012), Riau Branch CSR Report, June 2012.
Kao, J.J. (1991), The Entrepreneurship, Prentice Hall, NJ.
Zulkarnain, Z. (2005), “Assertiveness and creativity employees working in multi level marketing (in
Indonesian Asertivitas dan Kreativitas pada Karyawan yang Bekerja di multi level marketing)”,
Psikologia Journal, USU Press, Vol. 1, p. 2.

Further reading
Budimanta, A.P. and Bambang, R. (2008), “Corporate social responsibility for development alternatives
Indonesia”, Indonesian Corporate Social Responsibility Alternatif Bagi Pembangunan Indonesia,
ICSD, Jakarta.

Corresponding author
Sri Indarti can be contacted at: [email protected]

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