Jurnal Bisnisman : Riset Bisnis dan Manajemen

Vol. 1, No. 2 (September – Desember): 20-40

Strategic Risk Management Analysis PT Indo Tambangraya Megah, Tbk.

(Case Study Period 2011-2014, Amid Declining Coal Price)

Abu Bakar Ashidiqy, Kurniawan

Universitas Nusa Putra

Abstract: The Management Strategy in mining business companies are unique and specific study, where modern mining was
started to produce massive coal in the era of Industrial Revolution in England in 18th (eight teen) century, and throughout the
rest of Europe due to Industrial booming, this situation continued to all over the world along with economic growth in which
country surrounding where utilization of coal and minerals are required seeks systematically then which a called as modern mining
will exploited continue till today. Decision makers need a technical strategy and systematic analysis tools to scan the latest trend
situation and condition of nature environment business both external and internal, then assessed it and fixed it. Wheelen, make it
Four Basic Elements of Management Strategy, starting with 1) Environmental Scanning, 2) Strategy Formulation, 3) Strategy
Implementation and 4) Evaluation and Control (Monitoring) Performance. In conducting to monitoring or evaluation,
measurement tools the performance of company is important, Wheelen describes a number of measuring devices such are Activity
Based Costing, Traditional Financial Measures, Balance Score Card, Stake Holders and Share Holders Value and very famous
thing is Enterprise Risk Management (ERM). Research proven that the ERM in its implementation, need risk management
strategies to be able to do early detection, to the survival and sustainability of the company as part of Strategy Management.
Keywords: Decline Coal Price, Revenue of Company (EBIT) and Strategic Risk Management

Abstrak: Manajemen Strategi di perusahaan bisnis pertambangan adalah studi yang unik dan spesifik, di mana
penambangan modern mulai menghasilkan batu bara besar di era Revolusi Industri di Inggris pada abad ke-18
(delapan remaja), dan di seluruh Eropa karena booming Industri, ini Situasi berlanjut ke seluruh dunia seiring dengan
pertumbuhan ekonomi di mana negara di mana pemanfaatan batu bara dan mineral diperlukan, mencari secara
sistematis maka yang disebut sebagai penambangan modern akan dieksploitasi berlanjut hingga hari ini. Pengambil
keputusan memerlukan strategi teknis dan alat analisis sistematis untuk memindai situasi tren terkini dan kondisi
bisnis lingkungan alam baik eksternal maupun internal, kemudian menilai dan memperbaikinya. Wheelen, buatlah
Empat Elemen Dasar Strategi Manajemen, dimulai dengan 1) Pemindaian Lingkungan, 2) Perumusan Strategi, 3)
Implementasi Strategi dan 4) Evaluasi dan Kontrol (Pemantauan) Kinerja. Dalam melakukan pemantauan atau
evaluasi, alat pengukuran kinerja perusahaan itu penting, Wheelen menjelaskan sejumlah alat pengukur seperti
Penghitungan Biaya Berbasis Aktivitas, Pengukuran Keuangan Tradisional, Kartu Skor Saldo, Pemegang Saham dan
Nilai Pemegang Saham dan yang sangat terkenal adalah Risiko Perusahaan. Manajemen (ERM). Penelitian
membuktikan bahwa ERM dalam implementasinya, membutuhkan strategi manajemen risiko untuk dapat melakukan
deteksi dini, untuk kelangsungan hidup dan keberlanjutan perusahaan sebagai bagian dari Strategi Manajemen.
Kata Kunci: Penurunan Harga Batubara, Pendapatan Perusahaan (EBIT) dan Manajemen Risiko Strategis

* Corresponding author’s e-mail: [email protected]

ISSN: 2686-4789 (Print); ISSN: 2686-0473 (Online)
http://bisnisman.nusaputra.ac.id
Jurnal Bisnisman : Riset Bisnis dan Manajemen–September-Desember, Vol. 1, No. 2, 2019

PRELIMINARY Domestic Coal Market

Management Strategy in mining Minister of Energy and Mineral
business companies is specific, unique and Resources has issued Decree No.2934
deeper study, where modern mining was KI30/MEM/ 2012, on Determination of
started to produce massive coal in the era of Minimum Percentage Requirement and Coal
Industrial Revolution in England in 18th Sales for the Purposes of Domestic Market in
(eght teen) century, and throughout the rest 2013. The decision of the Minister of Energy
of Europe due to Industrial booming, this and Mineral Resources of the mandate in
situation continued to all over the world 2013, coal mining enterprises are required to
along with economic growth in which meet the minimum percentage of sales of
country surrounding where utilization of coal for domestic market (DMO) which
coal and minerals are required seeks allocated 20.30%. The percentage for
systematically then which a called as domestic needs is derived from estimates of
modern mining would be exploited continue coal production in 2013 amounted to
till today. 366.042.287 tonnes, which is derived from 45
In context Coal Company , Based on (forty five) companies holding Coal Mining
Regulation 28 of 2009 in conjunction with Agreement, 1 (one) State-owned enterprises
Regulation 24 of 2012, issued by the and 28 (twenty eight) company Coal Mining
Directorate General of Mineral and Coal Permit holders.The government estimates
Mining (Directorate General of Mineral and the demand for coal for domestic market
Coal) Ministry of Energy and Mineral (end user domestic) for the users of coal in
Resources (ESDM), described in definitive 2013 amounted to 74 320 million tonnes with
sense, role and function Coal Mining details of 60.49 million tons for the needs of
Company. Based on that functions of the role steam power plants (steam cola) and 0.74
of mining companies that the Law upon million tons of metallurgical and cement for
Mineral and Coal (Mining) point –b, at the pabik needs, fertilizers, textiles and pulp by
opening pages section, as follows that the 13:09 million tons (cooking coal).
operations of mineral and coal mining The downturn trend of coal prices
business activities outside the geothermal, reflected at index of Coal Reference Price
oil and gas and ground water has an (HBA) in the following chart, this price drop
important role in to give real added value to reflected occur may continue for the next few
the national economic growth and years into 2015, as long as there has been no
sustainable regional development. improvement of market symptoms
Mineral and coal's market has great (rebound) in commodities mining sector.
appeal because the needs of mineral and coal Symptoms of price declines in mining sector
in particular remains high, despite in last period hit all commodities beyond
experiencing fluctuations, coal is used to fuel coal mining, such as tin, nickel, copper and
needs of Power Plant (Steam Coal/ Thermal even gold (which during the previous year is
Coal ) and Steel Smelting plant (Cooking always the ascending equal trend to oil),
Coal), etcetera. today showed the opposite trend with
periods years-years previous (2011
previously) and continues to weaken.

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Table 1, Trends Decline Coal Price Harga Batubara Acuan (HBA) Indonesia 2011-20141

Exports Coal Market The world coal market dominance of

Mining.com released a report, in large demand (High Demand) number of
2013, amid the slowing down of mineral and countries in developing countries whilst
coal prices at this time, in fact that mineral keep growing (Emerging Countries) in Asia
and coal business is still attractive and there Pacific such as China and India, known as
is still appearing a potential increase in country with energy hunger on the supply of
return (rebound). Entering 2014, the price of energy (Energy Countries Hunger).
coal to New Castle Index Cooking Coal is Economic Growing Index yearly of China's
still quite interesting where it has passed the growth above 8% for over decade as
tipping point of USD 90 per tonne, but the something phenomenal, the data report by
price of thermal coal is still too low below the World Bank indicated forward into 2010,
USD 80 per tonne, and continues to the growth of China facing contraction and
experience the pressure is now September corrected to tend flat at 7%, followed by
2014 were down significantly in range of India 6%, Brazil and ASEAN 5%, these
USD 67.00 USD per tonne. shown that trend of world economic growth
Determining the coal price started is slowing down. Mineral Analysts
benchmark are used is depend on an said the drop of price minerals and coal are
agreement established between coal buyers fades, such are :
and sellers of coal in international markets a. Economic slowdown, in Europe due to
such as the prosecutor (Japanese Price Units) the debt crisis, the EU concerns
issued in Japan, Platts (International Coal syndrome will have default, due to the
Market), NCCI (New Castle Coal Index) huge debt that continues to hit Southern
issued on Australia, ICI (International Coal European countries such as Greece,
Index). Portugal, Italy and Spain, have not found
a bright spot way out of the crisis.

1Anonymous, Harga Acuan Batubara Indonesia (HBA), 2014, (Direktorat Jenderal Mineral dan Batubara,
ESDM, Indonesia). pp.1-10.

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b. Environmental Issues, pressure where e. American coal over stock, the growth of
coal big portion to pollution by up to 70% gas consumption in United States and
of pollution of the world, as a sensitive Canada is rapidly, some sector coal-
issue that regulation more tighten of based power plants began to switch off
Clean and Renewable Energy Policy and moves to gas because it is cleaner
(Green Economy). and cheaper, (current situation that
c. Shale Gas, finding reserves of shale gas, distribution system and gas
where gas findings with using latest infrastructure in United States and
technology can pumpt put that gas Canada are quite well) as a result of coal
'trapped' in under of fossil rocks and coal mining sector US and Canada can not be
in the depths of the earth without doing sold and absorbed by the American
overburden, through the process of market it self.
fracking in the earth and channeled
through a pipe directly to the processing The ambition to export American
plant, then go to the process of coal production may not competitive to sale
Regasification into LNG (Liquefied into market Asia Pacific, relatively expensive
Natural Gas), where the frozen gas at because freight costs, the market for sale to
extreme temperatures - 125 C which are China and India due to their distance from
then sold and distributed through production centers of other countries such as
tankers and liquefied through a Australia and Indonesia, (until now China
fluidisation, with products subsequential and India market up taken is the largest coal
such as CNG (Compression Natural Gas) and minerals), there is no other exit way
and LPG (Liquified Petroleum Gas) except to press the world coal prices to the
which reactif cleaner. same as the selling price of American coal, in
d. Market Speculation, which is not seen order to enter the market of China and India,
(due to Invisible Hand) mineral and coal by asking a variety of issues one example
commodity is very sensitive to rumors as with the findings of shale gas fracking
well as oil commodities, rumors 'sniff' technology all of which are unconfirmed.
the decline of mineral and coal
'accidentally' lowered amid fears of EU The Trend Declining Profit (Ebit)
and USA on economic growth BRICS The trend of decline in profit (EBIT)
(China, India, Brazil and Russia) are facing significantly where ITMG experience
increasingly phenomenal, there is no that situations is eroded to profit or EBIT in
way out to other than the economic period of 4 (four) years, during that period
growth of BRICS pressed with intent to 2011 into 2014, originally in year 2011, EBIT
restrain the rate of economic growth for (in thousands USD) stands at USD 706.915,
not getting 'Overheating', and curbing then in year 2012 fell to USD 558.438, then in
demand of regional BRICS against a 2013 decreased continue at USD 337.475 and
number of energy commodities. again decreased in 2014 at USD 192.697.2

2 Anonymous, Financial Statement ITMG,

periode 2011-2014, PT.Indo Tambangraya
Megah TBK, Jakarta.

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Table 2, the trend decline in EBIT due to the decline ITMG Coal Prices

or anomaly, where the rise in world oil prices

The pattern EBIT declining markedly can not lift (lift up) the price of coal and
further erodes as a result of going down mineral world whose condition continues to
trend price in the world market of coal and decline and tend to be flat.
mineral is positively correlated with the This condition if continues, may reduces
declining trend of EBIT (profit company). significantly profit (EBIT) some coal mining
In coal mining business portion of company on the long term and ultimate may
that use of crude oil (fuel) is around 60% of disrupt the continuity of the company.
the overall to mine operating cost, so that the
movement up and down (fluctuating) world THEORITICAL REVIEW
oil prices impact directly to the clappers Risk Management
company. Generally, mineral and coal Due to the uncertainty ongoing
commodity prices directly proportional to market there is potential lost may happen,
oil prices, in the sense that if crude oil prices and the risks inherent in any type of
rise, then price of coal and minerals are going business; which the risk as something needs
to increase. to be managed rather than avoided is the
In fact that trend of energy main platform activities of the company in
consumption and connected particular up on maintaining the continuity of business for a
coal and oil prices are not always parallel, in long time and sustained as a form of
fact that 2012 showed symptoms of opposite

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implementation of the vision and mission of losses), because of the element of uncertainty
the business of each company. inherent related to the incident or events.
Integration strategy decision-makers Aswath Darmodaran, define that
needs some tool, devices and systematic probability of an accident multiply by
analysis techniques to observe the current consequence lost of money and death, only
situation both internal and external quantifiable uncertainty to be risk)3
environment, according Wheelen theory that Many methods or instruments to used
says the necessary analysis enviro scanning in management strategies for measuring
in backing offer the formulation of business Performance of the company astheory by
strategy or corporate enterprise. Wheelen in stages Evaluation and Control or
Make a long list of vision and Performance Monitoring, to ensure some of
mission, identifying the strengths and the goals that have been achieved, by
weaknesses both external and internal to comparing the level of objectives to be
understand clearly how each component of achieved with the actual results and provide
the strengths and weaknesses could the feedback for input to process
constructed and can add value, to assess improvement would continue.
which are almost relevant to the current By selecting a measuring tool or
condition wihich a lot of competitiveness by instrument for measuring the performance
assessment in which that relevant then of enterprise companies Wheelen describes a
carried restriction some options from number of performance measurement tools
sharing events, then the limit with election such as Activity Based Costing, Traditonal
whic h that option comes closest to the facts Financial Measures, Balance Score Card,
after weighting analysis. Stake Holders Value, Share Holders Value,
Based on this information we will get Enterprise Risk Management (ERM), and so
the most suitable option strategies and on.
firmed, by choosing the best weight of some Researchers, use Risk Management as
options solution, which will be selected and a performance measurement tool because
implemented to create a competitive there are two (2) reasons:
advantage. 1. Risk Management serves as a warning
By identifying the weaknesses and system alerts or early detection tools.
advantages of PT. Indo Tambangraya, TBK 2. Serves as therapy with a number of
then the company can determine what mitigation steps are in various forms of
measures will be used in business risk management responses either by
competition amid coal commodity price avoiding, Retention or transfer the risk
crisis which today continues to weaken till (Risk Transfer by Insurance or Non
when as something unknown. Insurance like Bank and others body).
George E. Rejda in his book In which risk management is also
Principles of Risk Management and explained share many risk management
Insurance, the 10th edition, said that the risk models used such as Value at Risk (VAR),
has been defined as an event that could Earnings at Risk (EAR) and ISO 31000 Risk
potentially create a loss (concerning of Management.

3
Aswath Darmodaran, Strategic Risk Taking, a (Pennsylvania-USA : Wharton School of
Framework for Risk Management, Publishing, 2008), h.396.

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Furthermore, George E. Rejda would interference disrupt run

describes some parts of the Risk operation, and so on.4
Management (Entreprise Risk Management)
(ERM) within three (3) categories : Strategic risk
1. Strategic Risk, defined as the risk of loss On context of risk management
arising corporate level management at theories with reference to George E.Rejda
the strategic level as unclear vision and who said that,”Entreprise risks ia a term that
mission of the company, the market read encompasses all major risks faced a business firm,
error, unclear formulation, such risks include pure risk, speculative risk,
implementation and review that does not strategic risk, operational risk and financial risk.
run, will result in obscurity (absurd) And Strategic Risk is refers to uncertainty
company to be taken Where (unclear regarding the entire firms of goals –
direction) and the impact on the entire objectives and financial.”5
corporate objectives. So that could mean any events that
Treatment of risk at a strategic level could potentially threaten the company's
because in the wake of the foundation of overall business objectives and disrupt
what degree of accuracy and a clear financial posture can be regarded as part of
direction in level of operational risks and the strategic risks, both internal and external,
the risks of financial or other support including more specific with regard to the
organizations. situation threatening drop in coal prices and
2. Financial Risk, defined as the risk of loss led to a decrease in corporate profits.
that may arise corporate level financial
management as an example as a result of Strategic Risk Profile
Bank Interest Rate (Interest Rate), Strategic risk associated with risk at
Foreign Exchange (Foreign Exchange the corporate level, and air-effects with the
Rates). plan, implementation and monitoring of the
As an example of its Financial Risk management strategy of the company. For
treatments can be various kinds such as example, when a risk arises as a result of mal
by making financial hedging, function (incorrect) in reading the future
Derrivatives, Future Contracts, Options, market conditions where the company
Swaps and others Financial Instruments. previously made strategic plans with current
3. Operational Risk is defined as the risk of data and foecasting, namely by making the
loss that may arise at operational logical assumption when annual budgetting
management as an example of Price created .
Fluctuation of Oil as a major component Incorrect forecasting and market
of production, would be a significant prediction impact on revenue decline, as a
operating expense up huge dueto the the result of the collapse of commodity prices
protion of Oil is 60% to operating continue to decline, and facing under
expenses, uncertainties Availability pressure against to operating cost or burned
Component Parts and Raw Materials of rising operating costs.

4 George E.Rejda, Principles of Risk 5

George E. Rejda, Principles of Risk
Management and Insurance, (10th Edition, Management and Insurance, (10th Edition,
Pearson), p.7. Pearson), p.8

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Example: when the price of coal FOB compromises. On the assumption that
price at the rate of USD 70 per tonne in 2013 the external conditions force companies
and continued decline to USD 69.75 per ton to carry out a compromise in order to
in 2014, at the same time oil prices are likely withstand external pressures.
to rise and continue to pressure on 2. The strategic plan is correct but the
operations, the critical point of that the internal condition misread the strategic
operating cost is still the range of USD 60 per plan. On this assumption the company
tonne, making revenue derived from the can not control the internal situation,
difference between the selling price (market forcing the company to make a
value) and the price of operating (operating compromise in order to survive.
cost) continues to erode and this is a risk, 3. The strategic plan may be made to
potentially losses may happen contain or there is an error in it. On this
Strategic risks include when 1) a assumption from the beginning of firms
strategic decision having errors (wrong carry out a strategic plan in which there
decision when), 2) Also read the long term is an element of fault, for example, the
performance of the company, such as Vision and Mission of the company is not
considering the variable market, corporate in line with the conditions of resources
governance and stakeholders. and capabilities.
Market typical, related to the Alexander Roberts and William
character of the regional sector in certain Wallace said that ” Identifies,monitors and
market conditions and the movement of manage the risks profile of the organization.
commodity volatility changes that Major changes in this profiles can results in need
amendments can be stagnant, volatile even to revise or changes the elements listed above and,
very extreme (bullish and bearish factors). in particular, to devise new strategic plan.
Theoretically made of the risk Alternatively, changes maybe due to the
mapping at the strategic level is in a work implementation of a new strategy. Strategic risk
table following below, the mapping management covers four primaries areas or levels
intended to map the level consistent which are 1) Strategic Risk, 2)Changes of Project
implementation of the strategic plan on risk, 3)Operational Risk and 4)Unforeseeable
certain conditions: Risk.”
1. The strategic plan is correct but the
external conditions force make

Figure 1, Cycle Process Risk Management Strategy, Focus Wheel, Edinbugh Business School

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It could means that the Risk objectives into the core rather than the
Management Strategy is a process to management strategy of a company.
identifying, monitoring and managing a risk Both internal and external events
profile of an organization. Where are the become embedded within a company can
majority of the risk profile could result in an potentially interfere with the achievement of
impact of change, in alternation changes strategic objectives, strategic risk aspects into
include several primary areas such as: discussion point risk management strategy.
1. Strategic Risk. So that company executives and
2. Risk of changes in scope of projects and board of directors see that the increasing
programs. expectations of the shareholders, the owners
3. Operational Risk. of capital, the government and third parties
4. Risk unforeseeable. are part of the organization's risk, the core of
Strategic risks need to be managed a risk management is namely managing
with the Risk Management Strategy, financial risk and operational risk non
furthermore, the strategic risks need to be financial), and if its not managed properly
managed with the Risk Management will cause disastrous (Catastrophe) for
Strategy (SRM), his relationship with the strategic risk, and this becomes the center of
ERM can we draw the line encounter is that discussion of the Risk Management Strategy.
ERM has divided the risks into three (3) Based on the theory of Risk
categories of strategic risk, financial risk and Management Strategy stated by L.Mark
operational risk, which justifies that ERM is Frigo and Anderson J. Richard, can be
a strategic risk the 'high level' of an derived in more detail as follows:
organization or company, then the risk 1. It's process identifying, assessing and
management strategy (SRM) is talking about managing both internal and external
the risk of achieving the strategic objectives events and risk that could impede the
(risk strategy) is to focus on the discussion of achievement for strategy and strategic
risk management strategies. objectives. Is the process of identifying,
Frigo and Anderson said that, "SRM asses, and manage internal and external
is a crtitical a part of an organization of factors, which pose a risk and affect the
overall ERM process, it is not separate from achievement of the strategic objectives of
the ERM but it is a critycal element of it, and the strategy.
one tha has been becoming more 2. The ultimate goal is creating and
important.", SRM is become a critical protecting shareholder and stakeholder
element than the ERM, and not a separate, he value.Its main goal is to create, and
becomes something important. (1) protect the interests of all stakeholders
Because it has been said previously and more specifically are shareholders.
that the SRM focus on the discussion of risk 3. It's a primary component and Necessary
achieving strategic objectives, which COSO fondation of the organization's overall
defines strategic objectives (strategic enterprise risk management process.Its
objectives) is, "high-level goals aligned with main component is a basic foundation of
and supporting and mission," the strategic the organization's main connection to all
process enterpise risk of management.

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4. As a component of ERM, it is by investigated, and where to start, qualitative

definition of effected by boards of research conducted based on the
directors, management and otrhers. As a phenomenon that occurs, the phenomenon
component of ERM, defined as having an can be derived from the real world
effect, and it becomes important to be (practical) againts to the gap theory as
considered by the board of directors, research gap, where the phenomenon then
management and all parties. used as the basis in formulating research
5. It’s require a strategic view of risk and problems and create a research question.
consideration of how external and Qualitative findings are directed to
internal events or scenarios will Affect produce improvements in the quality of
the ability of the organization to Achieve work and basically could also benefit
its objectives. This requires a thorough fatherly interest of academics, in certain
view regarding the risks of internal and matters of professional practitioners are
external sides, about any event which closely related to the pattern of academics,
gives effect to the organization's ability while in other cases not, for the purpose of
to achieve its objectives. research it has become its own distinct in
6. It’s a continual process that should be need of answers research requires different
embedded in setting strategy, strategy research methods. Qualitative research
execution and management strategy. It methods were characterized by case studies
became an important stage of the process generally followed by improvement,
that should be inline with plan at the therefore data collection, data analysis and
time of setting the strategy, execution of actions often take place simultaneously.
strategy management strategy. Action research, or Action Research
Organization or company can adopt that is a method that can be adopted typing
definition and principles of SRM helps in handle by case study, researchers here acts
developing every business plan and as a professional practitioner. Research that
strengthen the ERM focus on strategic used to look into deeper a phenomenon or
risk management. event then becomes an issue of research, as
well as the reason for the depth of a study
RESEARCH METHODOLOGY used in stages of data analysis, Qualitative
In carrying out research interenship research methods are often associated with
PT. Indo Tambangraya, TBK, using human life in a community or organization
qualitative research methods is often used to in a situation (setting) are different from the
look into deeper a phenomenon or event to destination and perspective.
observing a case, thus the research process,
by data collection and analyis nature of Qualitative Methods
cases, and is often used by practitioners and There are a number of several
or managerial. methods that are often used in qualitative
Because it requires things - things research are as follows:
that are detailed in certain cases to be used 1. Grounded Theory
into improvement of performance 2. Case Studies
intensively. Important step in qualitative 3. Phenomenological
research is to determine what to be 4. Entnomethodology

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intelligence, ability or aptitude of the

Grounded Theory individual or group.
A qualitative research method that 2. The questionnaire or questionnaire, a
uses a systematic procedure to find a theory, number of written questions to use to
in which the working procedures developed obtain information from respondents
systematically to the criteria of the scientific about their personal or vote on
method. This research method is not something.
contrary to a theory or to test a theory, it is 3. Interview, A number of questions asked
different with a quantitative approach, in by researchers to assess the state of a
which the method starts from a variabel or person or an individual within a group.
derived from a theory, but starting from a 4. Observations, one tool direct
number of data to eventually formulate a observation, observation can be used as a
theory (inductive). test, questionnaire, record pictures,
The absence of a theory as the initial record images or sound recording, which
assessment designed. Thus assumptions: contains guidelines for observation
a. All the concepts related to the contains a plan of observations on some
phenomenon has not been identified. of the activities that may arise and be
b. Relations between the concept has not observed.
been arranged yet incomprehensible or 5. Documentation, Data stored in writing
conceptually. can be a file, with regard to research
c. With this assumption is grounded theory information, in various forms of
method has a specificity in the document
formulation of the problem, research The study sample, which is used is
objectives, research instruments, sample not based on population size, but on the
research and outcomes research concept representatives on diverse with
Research problems, researchers can technic based on proven concepts relevant to
not pose a problem beforehand clearly as in the theory that is being drawn up, the aim is
quantitative research methods, including the to take a sample of events or phenomena that
study variables and relationships between indicate the category, nature and size
variables. The substance of the problem is directly address the issue of research.
general and gives freedom to explore a
phenomenon more broadly and deeply. Case Study
Research instruments, which are The exploration into deeper on a
used in data collection process is focused on bound system, could also be activities,
the researchers themselves are generally events, processes or individuals based on
used two main methods, namely observation extensive data collection. Tied mean the case
and interview, grounded theory emphasizes is separated from similar cases in place, time
the importance of digging the background. and context to another.
Some types of research instrument used in The case studies are widely used by a
this study are as follows: relatively researchers with qualitative
1. Test, a list of questions or questions used characteristics, Case Study is a study by
to measure skills, measurement of giving limits firmly against an object or

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subject specific research, focusing on an interviews, observations and collect a

intensive and detailed case. number of documents needed to understand
Based on these limits can understand the behavior of the culture, traditions, beliefs
that characteristics of case studies covering and language.
several things: Basically ethnometodology is going
a. The object and subject of study may be a so far beyond more than just to collect data,
human, events, background and but a clump separate science on the object to
documents. be studied, not limited to the study of
b. The study was conducted in depth as a isolated tribes but also refers to human life
totality in accordance with the current (modern) in a variety of situations
background and context of each in order and problems.
to understand the various linkages.

Accomplished Research Review

Phenomenological
1. Doctoral Dissertation with the topic of
Principal foothold lies in the
research, "Risk Management Strategies
deepening of an object of study to try to
and Decision Support Tools for dryland
understand an event and its relation to
Farmers in Southwest, Queensland,
human life in a variety of specific situations.
Australia." The University of
Anthropology generally using a
Queensland, Gatton, Queensland, by
phenomenological approach in their studies
Chao Nam Nguyen, discusses the risk
in some cases, and this method can be used
management strategy as a supporting
in studying the phenomenon of social,
tool in decision-making process, is very
economic, business policy, public policy and
useful in helping a number of companies
other social studies.
dryland Farmers (or associations of
peasant producers of agricultural
Etnomethodology
commodities in the state of Queensland,
The ethnographic study, is a
Australia).
qualitative research procedure that is used to
describe, analyze and interpret the patterns
of behavior, beliefs and cultures to a cultural
group that develops over time, focus on the
study of the cultural depth. To understand
the group behavior patterns in culture,
researchers Culture (Ethnographers) spend a
lot of time in the field and carry out

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Jurnal Bisnisman : Riset Bisnis dan Manajemen–September-Desember, Vol. 1, No. 2, 2019

Table 3, Strategic Risk Management Research by Chao Nam Nguyen, Australia6

2. Thesis Master of Economics, with a corporation's reputation and led to the

research topic, "Risk Management company's losses.
Strategy to Maintain Corporate Risk management strategy is very useful
Reputation." The University of South in helping a number of companies such
Africa, South Africa, by Tasneem as Johnson & Johnson, Exxon Valdez,
Suliman Joosub, discusses the risk Coca Cola and Ford Firestone South
management strategy as a supporting Africa, in maintaining a reputation, with
tool in maintaining corporate reputation. the implementation of risk management
Where the company came under strategies, as one of the Strategy
pressure from factors 1) Internal such as Management tool.
ethical (Corporate Culture), Product and
Managerial Mistakes (Management
missleading), is also a factor of 2)
external accidents such as the condition
of the market is slowing and media
pressure has aggravated the

Table 4, Strategic Risk Management Research by Tasneem Suliman Joosub, South Africa7

3. Thesis Master of Science, the research Business, Denmark by Xhiao Hua Zao,
topic, "Risk Management in Strategic research on risk management in strategic
Alliances.", In college Aarhus School of alliances, in a country that is different

6
Nam Chao Nguyen, Risk Management Strategies and Decision Support Tools, (Australia, Dissertation
Ph.D, University of Queensland, 2007).
7
Tasneem Suliman Joosub, Risk Management Strategy to Maintain Corporate Reputation, (South Africa,
Thesys of Master (Commerce) Economic, University of South Africa, 2006).

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Jurnal Bisnisman : Riset Bisnis dan Manajemen–September-Desember, Vol. 1, No. 2, 2019

from the one in Denmark , Europe and company locations and culture for the
another in China, Asia. purpose of increasing capital through
Where companies try to increase capital asset ownership strategies through
gains and penetration of the market as a alliances, with the implementation of
destination where the independent risk management strategies, as one of the
variable is the Risk Management Strategy Management tool.
Strategy and Strategic Alliance
dependent variable is a different
company location between China and
Denmark.
Risk management strategy is very useful
in helping a number of different

Table 5, Strategic Risk Management Alliance by Xhiao Hua Zao, Denmark8

Model of Risk Management Strategy that sub sequent flow process since Mandate
ITMG & Commitment  Planning & Operating, 
As a series of risk management Capability & Compliance  Eveluation &
processes influence each other, and Improvement which all those connected by
reciprocal, and run chronological as an line which all process as strategic process
ecosystem as a chain link entities. and at core is Operatonal Process, also built
Because the each pilars have sub inside comprises upon steps of Risk
sequent instruments inside which is that Management
influence to another sub sequent, as reflected

8
Xhiao Hu Zao, Risk Management in Strategic Alliances, (Denmark, Thesys of Master of Science, Aarhus
School of Business, 2005).

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Jurnal Bisnisman : Riset Bisnis dan Manajemen–September-Desember, Vol. 1, No. 2, 2019

Figure 2, Model Risk Management Strategy ITMG as a chain, ERM Framework9

Strategic Process, as a domain All of them run chronological and

consisting which connected four (4) pillars simultaneously as a series of chain or cycle
that runs as chain or linkw and interplay of management of the risks of flow in Strategic
which is as follows: Process.
1. Mandate and Commitment consists of Operational Process, is part of a large
the Policy Statement, Corporate Culture, domain where the Operational Strategic
Unification ERM (ERM Objective Process The process also gave input to each
Alignment) and Compliance affect pillar behind -pilar strategic cycle process,
horizontally on how. success is highly dependent on the strategic
2. Plan & Organization, which consists of level of success in operarional level, so focus
Organizational Context, ERM Roadmap on the actual operating level automatically
& Plan, ERM Performance Indicators, focus on the strategic level.
Accountability, Unification to the whole 1. Operational Process comprises of two (2)
process (Integrate into All Process) Vertical pillars : of the Communications
vertical influence on how. & Consultation and Monitoring &
3. Capability and CompetenCY, which Review.
consists of Personnel (Human 2. Four (4) horizontal pillars namely
Resources), Risk Information, ERM Risk Determine Context (Establishing
Information System), Mechanism Context), Risk Assessment consists of
Communication, ERM Documentation Risk Identification, Risk Analysis, Risk
and Reporting, ERM Maturity Model, Evaluation and Managing Risk (Risk
affecting horizontally to how. Treatment).
4. Evaluation and Improvement, which
consists of ERM Maturity Model, Key
Principal Approaches and Continuous
Improvement affects vertically on how.

9Torben Juul Andersen and Peter Winter Schroder, Strategic Risk Management Practices, How to Deal
with Major Coprorate Exposures, (Cambridge, Cambridge University, UK, 2010).

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Jurnal Bisnisman : Riset Bisnis dan Manajemen–September-Desember, Vol. 1, No. 2, 2019

Analysis of Risk Management Strategy a. Project risk.

ITMG b. Risk Exploration Development.
There are five (5) ITMG risk a.1. Project risk
management process, which is described in Including category strategies Project
following stages : Management Office based in Balikpapan,
1. Establishing Context. East Kalimantan, handling some projects
2. Risk Identification. infrastructure, exploration and
3. Risk Analysis. development.
4. Risk Evaluation. In project management in ITMG is to
5. Risk Treatment determine three limit associated.
Project Risk 1. The budget allocated.
Analysis of project risk management 2. Quality and Quantity.
strategies include: 3. The schedule to be met.

Establishing Risk Identification Risk Analysis Risk Evaluation Risk Treatment

Context
Expansion Without delay the During the Delaying the Delaying expansion
projects in coal expansion project 2011-2014 project helped project spending.
postponed, and will suppress and period, there improve the
a focus on development and were company's profit Recalculate the accuracy of
efficiency and operating symptoms to the business all coal reserves and
increased expenditures may significantly efficiency and resources, and finding
productivity erode corporate delay the increased ways alternation other
cause the profits. expansion productivity. than open pit mines, like
current project. with was degree Auger Mining, which
commodity of Risk reduce degree of Risk
market combined combined between
situation between Likelihood and Impact 2:3.
weakened. Likelihood and
Impact 3:3.

Risk Operation Core (Core Function)

ITMG
Analysis of the implementation of
the core operations of risk management in
realizing the vision and mission are ITMG
covers include :
1. Risk Mine Operations.
2. Risk Operations Support.
3. Risk Sales and Logistics.
Included in category of core
strategies HO based in Jakarta, handling
some issuee in Site Operations, Operation
Support, Sales and Logistic, such are :

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Jurnal Bisnisman : Riset Bisnis dan Manajemen–September-Desember, Vol. 1, No. 2, 2019

Establishing Risk Identification Risk Analysis Risk Risk Treatment

Context Evaluation
Operating cost Increased Agreements Some SR reduced (peelings
efficiency and operating costs scheme mining contractors mine) and increase the
increased erode spending work contract with need to be volume of production
productivity. corporate profits. a contractor needs improved its output.
to be reviewed, productivity. Reviewing Base Rate
and find ways of which has been included
various things for for the Fuel removed and
efficiency ITMG which supplies fuel
measures. to get a discount rate of
Pertamina.

Lowering the Increased With the Integration The integration process is

cost of demurrage costs synchronization of process of better known as Shipment
demurrage. resulting from the Mine Plan, Mine Plan, Demand Pull (SDP)
delay Stevedoring Production, Production, Minimized demurrage
coal to barges and Operations and Hauling, and costs USD per ton, after
Transshipment. Coal Loading at capabilities treatment then reduce
the port as an Coal Loading degre of risk which
integrated process. reduce the combined between
level of delays Likelihood and Impact 2:3.
in unloading
coal, which
degree of Risk
consis
combined
between
Likelihood
and Impact
3:3.

mission ITMG is covering all Supporting

Risk Supporting Organizations ITMG Organizations, include:
Analysis of the implementation of 1. Corporate Finance Risk.
the risk management support organization 2. Corporate Risk Services (including HR, IT,
(Support Risk) in realizing the vision and Legal, EQ).
3. Risk of Corporate Affairs (External and
Government Relations).
4. Strategic and Busdev Risk.
5. Corporate Compliance Risk.
Including all the parts in category
strategy Support Function with HO based in
Jakarta. The 6rganizarion Risk Support
ITMG, such are :

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Jurnal Bisnisman : Riset Bisnis dan Manajemen–September-Desember, Vol. 1, No. 2, 2019

Establishing Risk Risk Analysis Risk Evaluation Risk Treatment

Context Identification
Trends EBIT EBIT declining During the Despite a Doing Coal Hedging
(Gain pr trend, erodes period 2011- decline in EBIT against commodity price
revenue corporate 2014, there is a due to declining decline trend of coal in
Company profits. phenomenon coal prices, sales aspect.
ITMG). (trends) EBIT ITMG Doing SWAP in
decrease successfully purchasing aspect Solar
significantly. manage risks to remedy anticipate rising
survive with a diesel prices, aftre
case of risk treatmen then decrease
management degree of risk which
measures listed combined Likelihood and
in column four, Impact 3:3.
which original
degree of risk
combined
between
Likelihood and
Impact 3:4.
Pareto analysis Buying Diesel During the Despite the By doing Fuel Pooling
of the operating and Explosives period 2011- trend of rising purchases to Pertamina by
expenditures seized 60% 2014, there is a Diesel price in combining demand all
such as Diesel. spending of phenomenon Q3 2014 and contractors ITMG get
company (trends) EBIT then decreased possibility a discount rate
decrease at the end of up to 30%, and savings of
significantly. 2014, which was millions of USD, declining
originally on the to Likelihood and Impact
Likelihood and combination 3: 3.
Impact
combination of
3: 4
Pareto analysis Buying Diesel During the Despite the By doing Pooling
of the operating and Explosives period 2011- trend of price purchases Explosives to
expenditures seized 60% 2014, there is a increases Orica and others, so by
such as spending of phenomenon explosives in Q3 combining demand all
Explosives. company (trends) EBIT 2014, which was contractors ITMG get a
decrease originally in discount rate up to 30%,
significantly. Likelihood and and savings of millions of
Impact USD, declining to
combination of Likelihood and Impact
3: 4 combination 3: 3.

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Jurnal Bisnisman : Riset Bisnis dan Manajemen–September-Desember, Vol. 1, No. 2, 2019

Risk mapping integration at ITMG

Figure 3, Mapping Integration Risk Management ITMG

The picture above, explains an CONCLUSION AND SUGGESTION

integrated risk mapping ITMG that aspect of Conclusion
Coal Price Volatility, the trend fall in coal Based on a thorough description above it can
prices on the market today are in priority be drawn some conclusions as follows:
number 1 (one) ITMG risk and has become a 1. Declining tend conditions coal price
serious concern because a big impact for a cause impaired performance of the
decrease in EBIT in period Last time had company, proved the EBIT decline
threatened the company's business significantly in last period, a number of
continuity. scenarios with the help of risk
ITMG Risk Map Integration aims to management tools out of the crisis, in
map overall good every degree of risk order to survive and continued viability
likelihood and impact, in every subsidiary of the company to grow better in the run
ITMG in one format display (dashboard) to length (sustainablilty).
describe any movement the degree of risk 2. Risk Management can be used as one tool
trend from time to time, to facilitate the Management Strategy, because risk
mitigation measures in an integrated management tool to help companies
manner methodology to helps when taking with early information (Alert Warning
the judgement. System) on trends situation of internal
and external conditions.
3. Risk Management not only helps the
company with go thorugh to look at the
trend of the situation of internal and
external conditions, but also help the
way out with some way exit scenarios

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Jurnal Bisnisman : Riset Bisnis dan Manajemen–September-Desember, Vol. 1, No. 2, 2019

and risk mitigation in the form of risk market situation, in order to support the
response. ease of access to new capital loans from
banks and investors, which the company
has a bargain power and dominant in
Suggestion
terms of price, interest on the loan
Based on the above, the authors propose
negotiation scheme.
some suggestions that might be considered
as an input for decision makers ITMG
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