How Economic Sustainability Is Created By Implementation of Good Corporate Governance In Small Scale Enterprises: Case Study In Tenun Songket Industry In West Sumatera

Abstract

The purpose of this research is to determine the effect of the implementation principles of good corporate governance on the family firm's economic sustainability. Corporate governance refers to the mechanism used by companies in managing relations between stakeholders, determining the direction or strategic objectives of the company, as well as how to control the company's performance. The population in this study were all songket weaving business units in West Sumatra. The sample was obtained by using Snowball technique and purposive sampling with the criteria of the business unit managed by the family. The number of samples in this study is 118 units of family business of songket weaving in West Sumatera. Data analysis with multiple regression, data is processed by using IBM SPSS statistics 24. From the results of the study obtained the correlation value (R) of 0.397. With a value of α = 0.05, the results obtained (1) Transparency have a significant effect on economic sustainability of “Songket” weaving industries in West Sumatera with a regression coefficient of -0.132, (2) variable Accountability has a significant effect on economic sustainability of “Songket” weaving industries in West Sumatera with a regression coefficient 0.110, (3) Responsibility has not significant effect on economic sustainability of “Songket” weaving industries in West Sumatera with a regression coefficient of 0.019, (4) Variable Fairness has a significant effect on economic sustainability of “Songket” weaving industries in West Sumatra with a regression coefficient of 0.147.