Financial Engineering Based on Financial and Non Financial Factors on Organizations Performance

Abstract

Clean water is a primary human need, so the provision of clean water is a necessity that cannot be negotiated. PDAM is a business entity managed by the region with the aim of providing services and providing clean water for the people in Indonesia. The purpose of this study is to examine the effect of knowledge management, resource management and application of culture’s organization to improve organizational performance which was carried out in the period before and after financial engineering. This type of research quantitatively with a positivistic paradigm. Population of this study is all Regional Drinking Water Companies (PDAM) in Region II Indonesia (Java and Madura Islands). The analytical technique used is regression analysis and ANOVA difference test to test the research hypothesis. The results of the study show that resources based have a significant effect on PDAM organizational performance before financial engineering. Knowledge management, resource-based and organizational culture significantly influence the performance of PDAM after financial engineering. based on different test results show there is a difference in knowledge management, resources based, organizational culture and organizational performance before or after financial engineering. There is a research novelty that is contributing to the development of financial management science through proving the application of financial engineering to improve the performance of the PDAM organization on financial and non-financial factors. Based on the results of this research, it is also a consideration for buildings a PDAM holding in order to expand market share and prepare for an initial public offering (IPO).