Kompleksitas Industri dalam Memoderasi Hubungan antara Kompensasi Manajemen dan Kinerja Perusahaan Manufaktur di Indonesia
DOI:
https://doi.org/10.47747/snfmi.v3i1.3101Abstract
This study aims to explore the role of industry complexity as a moderating factor in the relationship between managerial compensation and firm performance. The research object consists of companies in the food and beverage manufacturing sector listed on the Indonesia Stock Exchange, considering the high operational complexity in this sector. The research method employs statistical analysis using the SEM-PLS approach to examine the relationships among variables. The results show that managerial compensation does not have a significant effect on firm performance, contrary to agency theory, which states that compensation is designed to improve performance. However, industry complexity is proven to be a significant moderating factor but has a negative direction in this relationship. This supports the Resource-Based View (RBV) theory, which states that unique resources can influence performance, while the role of industry complexity highlights the importance of external factors. This study provides theoretical implications by adjusting agency and RBV theories to external contexts, as well as practical implications for companies to consider industry complexity in designing compensation policies. A more holistic strategy is required to improve firm performance in a dynamic and complex industrial environment.
References
Amewu, G., & Alagidede, I. P. (2020). Mergers, executive compensation and firm performance: The case of Africa. Managerial and Decision Economics, 1-30. https://doi.org/https://doi.org/10.1002/mde.3244
Bao, M. X., Cheng, X., & Smith, D. (2020). A path analysis investigation of the relationships between CEO pay ratios and firm performance mediated by employee satisfaction. Advances in Accounting, 48, 100457. https://doi.org/https://doi.org/10.1016/j.adiac.2020.100457
Barney, J. B., & Arikan, A. M. (2005). The Resource-based View. In The Blackwell Handbook of Strategic Management (pp. 123-182). https://doi.org/https://doi.org/10.1111/b.9780631218616.2006.00006.x
Bello, A. L., Agbi, S. E., & Mustapha, L. O. (2022). CEO compensation and firm performance: non-linearity and asymmetry. International Journal of Social Sciences and Management Review, 5(2), 63-76. https://doi.org/https://doi.org/10.37602/IJSSMR.2022.5205
Berle, & Means. (1932). The Modern Corporation and Private Property. New York: The Mac- millan Company.
Chatha, K. A., & Jalil, M. N. (2022). Complexity in three-echelon supply chain network and manufacturing firm’s operational performance. Computers & Industrial Engineering, 169, 108196. https://doi.org/https://doi.org/10.1016/j.cie.2022.108196
Chen, C., & Hassan, A. (2022). Management gender diversity, executives compensation and firm performance. International Journal of Accounting & Information Management, 30(1), 115-142. https://doi.org/10.1108/IJAIM-05-2021-0109
Elsayed, N., & Elbardan, H. (2018). nvestigating the associations between executive compensation and firm performance: Agency theory or tournament theory", . Journal of Applied Accounting Research, 19(2), 245-270. https://doi.org/https://doi.org/10.1108/JAAR-03-2015-0027
Fama, E. F., & Jensen, M. C. (1983). Separation of Ownership and Control Journal of Law and Economics, 26(2), 301-325
Han, S., & Mun, H. (2023). An investigation into outside directors, managerial compensation, and firm performance in the Korean insurance industry. Managerial Finance. https://doi.org/https://doi.org/10.1108/MF-11-2022-0540
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/doi:10.1016/0304-405x(76)90026-x
Jiang, F., & Kim, K. A. (2020). Corporate Governance in China: A Survey. Review of Finance, 24(4), 733-772. https://doi.org/10.1093/rof/rfaa012
Kayani, U. N., & Gan, C. (2022). Executive Compensation and Firm Performance Relationship. Review of Pacific Basin Financial Markets and Policies, 25(1), 1-18. https://doi.org/https://doi.org/10.1142/S0219091522500084
Kazan, E. S. (2016). The impact of CEO compensation on firm performance in Scandinavia.
Khenissi, M., Hamrouni, A., & Farhat, N. B. (2022). Executive compensation indexed to corporate social responsibility and firm performance: Empirical evidence from France. Finance Research Letters, 50. https://doi.org/https://doi.org/10.1016/j.frl.2022.103213
Kim, H. S., & Jang, S. (2020). The effect of increasing employee compensation on firm performance: Evidence from the restaurant industry. International Journal of Hospitality Management, 88, 102513. https://doi.org/https://doi.org/10.1016/j.ijhm.2020.102513
Larkin, I., Pierce, L., & Gino, F. (2012). The Psychological Costs Of Pay-For-Performance: Implications For The Strategic Compensation Of Employees. Strategic Management Journal, 33(10), 1194-1214.
Löhde, A. S. K., Campopiano, G., & Calabrò, A. (2021). Beyond agency and stewardship theory: shareholder–manager relationships and governance structures in family firms. Management Decision, 59(2), 390-405. https://doi.org/10.1108/MD-03-2018-0316
Malhotra, S., & Harrison, J. S. (2022). A blessing and a curse: How chief executive officer cognitive complexity influences firm performance under varying industry conditions. Strategic Management Journal, 43(13), 2809-2828. https://doi.org/https://doi.org/10.1002/smj.3415
Nguyen, H., Onofrei, G., Harrison, N., & Truong, D. (2020). The influence of cultural compatibility and product complexity on manufacturing flexibility and financial performance. Operations Management Research, 13(3), 171-184. https://doi.org/10.1007/s12063-020-00163-y
Patnaik, B. C. M., & Padhi, P. C. (2012). Compensation Management: A theoretical preview. Trans Asian Journal of Marketing & Management Research, 1(1), 39-48.
Pepper, A., & Gore, J. (2015). Behavioral Agency Theory:New Foundations for Theorizing About Executive Compensation. Journal of Management, 41(4), 1045-1068. https://doi.org/10.1177/0149206312461054
Puni, A., & Anlesinya, A. (2019). Corporate governance mechanisms and firm performance in a developing country. International Journal of Law and Management, 62(2), 147-169. https://doi.org/10.1108/IJLMA-03-2019-0076
Rehman, S. U., Bresciani, S., Ashfaq, K., & Alam, G. M. (2022). Intellectual capital, knowledge management and competitive advantage: a resource orchestration perspective. Journal of Knowledge Management, 26(7), 1705-1731. https://doi.org/10.1108/JKM-06-2021-0453
Rusydi, M. (2021). The Impact of CEO Narcissism Behavior on Firm Performance through Earnings Management. Atestasi : Jurnal Ilmiah Akuntansi, 4(1), 53 - 60. https://doi.org/10.57178/atestasi.v4i1.164
Salsabila, S., Dirvi Surya, A., Hamdani, H., & Basuki, B. (2022). Pengaruh Kompleksitas Perusahaan, Jenis Industri, Profitabilitas Klien, Ukuran Perusahaan Dan Komisaris Independen Terhadap Fee Audit. JUMBIWIRA : Jurnal Manajemen Bisnis Kewirausahaan, 1(3), 11-23. https://doi.org/10.56910/jumbiwira.v1i3.255
Saptioratri Budiono, H. D., Nurcahyo, R., & Habiburrahman, M. (2021). Relationship between manufacturing complexity, strategy, and performance of manufacturing industries in Indonesia. Heliyon, 7(6), e07225. https://doi.org/https://doi.org/10.1016/j.heliyon.2021.e07225
Sartono, R. A. (2012). Manajemen Keuangan Teori dan Aplikasi Yogyakarta, BPFE.
Sheikh, M. F., Shah, S. Z. A., & Akbar, S. (2018). Firm performance, corporate governance and executive compensation in Pakistan. Applied Economics, 50(18), 2012-2027. https://doi.org/10.1080/00036846.2017.1386277
Sholihin, M., & Ratmono, D. (2013). Analisis SEM-PLS dengan Warp PLS 3.0 untuk Hubungan Nonlinier dalam Penelitian Sosial dan Bisnis. Penerbit ANDI.
Smirnova, A. S., & Zavertiaeva, M. A. (2017). Which came first, CEO compensation or firm performance? The causality dilemma in European companies. Research in International Business and Finance, 42, 658–673. https://doi.org/https://doi.org/10.1016/j.ribaf.2017.07.009
Thirion, I., Reichert, P., Xhauflair, V., & De Jonck, J. (2022). From Fiduciary Duty to Impact Fidelity: Managerial Compensation in Impact Investing. Journal of Business Ethics, 179(4), 991-1010. https://doi.org/10.1007/s10551-022-05155-5
Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5(2), 171-180. https://doi.org/https://doi.org/10.1002/smj.4250050207
Zandia, G., Mohamad, S., Keong, O. C., & Ehsanullah, S. (2019). CEO Compensation and Firm Performance. International Journal of Innovation, Creativity and Change, 7(7), 316-334.
