NATIONAL RENEWABLE ENERGY (BIO-FUEL) STRATEGY

Bambang Sugiyono Agus Purwono

Post Doctorate Program in Management Sciences,
Faculty of Economics, University of Brawijaya
Lecturer in State Polytechnic of Malang
Email:bambang_sap@yahoo.com
Promotor: Ubud Salim, Co-Promotor: Djumahir, and Solimun.

ABSTRACT

The purposes of this research are to introduce and to develop the eight-step method for
designing the Strategic Planning and design of the National (Indonesia) Renewable Energy
Strategic Planning that have not been published by the Indonesian Government also to
reduce the research variables that dominant variables.

The two types of research variables are internal and external environments. Internal
environments include the strengths and weaknesses and the external environments include
the opportunities and threats. The variables of strengths consist of inbound logistics,
operations, outbound logistics, marketing and sales, and service. The variables of
weaknesses consist of firm infrastructure, human resources management, technological
development, and procurement. The external environments comprise of technology,
demographic trends, economic trends, political and legal environment, and socio-cultural
environment. Participants are regulators, providers or producers, researchers, and end
users who are concerned about the renewable energy. The method of analysis uses
quantitative and qualitative approaches or mixed methods or pragmatism paradigm. The
number of respondents for the quantitative approach was 42 (fourty two) respondents using
questionnaires and fifteen research variables and the respondents were analysed by factors
analysis. The qualitative approach was used to interview 25 (twenty five) participants. The
interviews were recorded using audio-visual or handy-cam.

The research finds that the confirmatory typology reduced the research variables to three
factors namely distribution channel, human resources training program, and manufacturing
technology. The Strategic Planning arranged by the eight-step for designing the Strategic
Planning are Vision, Missions, Objectives, Strategies, Policy, Program, Budgets, and
Procedures.

The findings of the study did not discuss about business ethics, and values.

Keywords Strategic Planning, Renewable Energy, Eight-Step method.

INTRODUCTION

An interesting phenomenon in Indonesia (in some provinces) in the middle of the year 2005
was the longest queuing at the Gas Station (SPBU/Stasiun Pengisian Bahan Bakar Umum) in
some provinces. Some cars had to wait for a half day, because there was not enough fuel at
the Gas Station. If there was any gasoline or diesel oil in the SPBU, the fuel price increased
very highly and the volume was very limited (the retailers outside SPBU). The energy supply
was 5.800 MTOE (Million Ton of Energy) in 1976 then was increased and became 12.000

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MTOE in 2008. The Government (Indonesia) had planned to build the Steam Generating
Unit (Pembangkit Listrik Tenaga Uap/PLTU) as a crash program by manufacturing and
installing PLTUs in 2009 with the total capacity of 10.000 MW (mega Watt) and the
government had spent money about US$ 25,6 billion (Yusgiantoro,
http://www.kompas.com). The PLTU fueled by non-renewable energy (crude oil and coal).
The Pertamina company produced oil with the lifting capacity about 965.000 bpd (barrel per
day) but the demand is about 1.050.000 bpd in 2010 (www.kompas.com) and the crude oil
stock is very limited.

The other phenomenon is the fluctuating price, in 1974 the crude oil price is lower than US$
20 per barrel, at the end of the year 2009 the crude price was US$ 100 per barrel, and in June
2010 the crude price is US$ 83 per barrel.

Some people as individuals or groups (in Sumatra, Kalimanan, NTT, and Java
(Yogyakarta/Bantul, Tegal, Bondowoso, Probolinggo, Sidoarjo, Mojokerto, Sukabumi,
Bogor, Jakarta, Solo, and Malang)) have produced the bio-diesel and bio-ethanol using the
Kamani seeds, SJC seeds, sugar cane, etc as raw materials (www.youtube.com and
www.kompas.com) which are more renewable and the crude oil and coal.

Harold Koontz and Heinz Weihrich (Koontz, 1988: 62, 82) stated that the strategic planning
steps are Purposes or missions, Objectives, Strategies, Policies, Procedures, Rules,
Programs, and Budgets. And Bititci’s observation (Lee, 1998: 527, 531) stated that hoshin
kanri (policy deployment) is not a solution to all planning problems but a process which
enables managers to plan effectively and translate those plans into actions. And the steps for
designing strategic planning are vision, Business Objectives, Strategic goals, Critical
success factors, Critical task action plan, and Performance measure. It means every
researchers might modify and combine the new steps for designing the strategic planning.

Singh (2004: A9) stated that strategy intent and strategic mission influenced by external
environment consist of opportunities (possibilities) and threats (constraints) and internal
environment consist of strengths and weaknesses. The variables of strengths consist of
inbound logistics, operations, outbound logistics, marketing and sales, service. The variables
of weaknesses consist of firm infrastructure, human resources management, technological
development, and procurement. And Fries (2006: 6) stated that the relationship between
organization and environment factors impact to the factors of strategy. Singh (2004: A10)
said for the future analysis, the researchers might use the primary and support activities of the
value chain analysis (Michael E Porter) provides opportunities to understand how external
environmental trends affect the specific activities of a firm.

The method of analysis of the previous researchers used only quantitative or qualitative
approaches, in this research mixed method used for analyzing, because mixed methods
research can answer research questions whereas the other methodologies cannot, and mixed
methods research provides better (stronger) inferences, and mixed methods provide the
opportunity for presenting a greater diversity of divergent views (Creswell, 2009: 18).

The Problem Statement

The problem solution is to substitute and blend the fossil fuel or non- renewable energy (the
gasoline and diesel oil) with the non-fossil oil or bio-fuel or alternative energy or renewable
energy (produced by Straight Jatropha Curcas/SJC, Algae, sugar cane, Coconut Palm/Cocos

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nucifera, African Oil Palm/Elaeis guineensis, Cassava/manihot esculenta, Zea mays L.,
Arenga pinnata, etc) as smooth as possible without emerging new problems, concerning with
the environment and involving and improving the wealth or prosperity of the people in the
villages.

The Economic Potential

The average diesel oil consumption level in Indonesia is up to 14 million kiloliter or 88,000
barrel (1 barrel = 159,25 liter) every year. For making a substitution of 5% only, it needs
about 700 thousand kiloliter (4.400.000 barrel) of bio-diesel every year. That bio-diesel
demand actually can be obtained easily in Indonesia, because Indonesia is rich enough with a
lot of plants that can produce bio-diesel mixture. The main source of bio-diesel is the cheap
CPO (Crude Palm Oil) and SJC oil.

The bio-fuel specialist from ITB, Manurung, R, stated that 1 Ha of SJC plant can produce
about 4.3 tons of oil per year or can produce about 4.7 kiloliter of bio-fuel per year.
Remembering that the SJC plant can grow in non-productive/dry/critics areas and Indonesia
has extensive dry areas, castor planting is expected to give an excess for society. Besides, the
planting SJC plants for bio-diesel supply is also good for increasing the productivity of the
dry areas and later can increase the land owner’s income. This dry area exploitation also will
not affect the food supply. According to the data from Centre Beaurau of Statistics
(BPS/Badan Pusat Statistik), in 2003 the critical area in Indonesia is up to 22 million Ha.
Based on the estimation of Manurung, R, above, the planting of SJC plant in the critical area
is only 10% and can obtain 10.3 million kiloliter of bio fuel every year.

After the production, realization and distribution of the bio-fuel or bio-energy, the
government and the people will receive:
1. The reduction of the operating cost in industries, because the price of the bio-fuel is
lower compared to gasoline and diesel oil.
2. Fishermen will be able to fish and sail their boats (fueling the bio-diesel oil) which
will allow them to produce for the domestic and export commodities.
3. The involvement of the people who live around the bio-fuel factories as workers
(way of creating new jobs).
4. The reducing of the operating cost of the factories because the bio-fuel price is lower
than the gasoline and diesel oil.
5. The increasing knowledge and skill of the people who live around the bio-fuel oil
factories.
6. The increasing revenues or tax for the regional government.

Government Commitment

There are many of the Government commitments such as the Presidential Regulation No. 5
(2006), about National Energy Policy, the Presidential Directive No. 1 (2006), about
supplying and exploiting of bio-fuel as an alternative energy, the Government will plan to
mix diesel oil with bio-diesel up to 10% in 2010, PT Pertamina’s target to change 400,000
kiloliter of diesel oil with bio-fuel from SJC oil in three years and later will be marketed
through more than 200 gas Station in Jakarta, Surabaya and Denpasar (Hanung Budya, Vice
Director of Commercial of PT Pertamina, Ltd), LoC (Letter of Commitment) between Eco-
Securities with 11 Indonesian companies to guarantee bio-diesel market (November 22,
2005), the forming of the National Team to Bio-fuel Program, which is recognized by Al-

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Hilal Hamdi, Director General of Oil and nature Gas (Tubagus Haryono) decree no.
3674K/24/DJM/2006 dated on March 17, 2006 about allowing the mixing gasoline with 10%
ethanol/alcohol, and the Government has determined SNI 04-7182-2006, that is standard for
substitution of fuel of diesel motor (B10). With these Letters, it means the using of B10 and
E10 can be used legally by the society.

LITERATURE REVIEW

Strategic Management Process

Robbins (2009: 276) stated that Strategic Management Process defined as a six-step process
that encompasses strategic planning, implementation, and evaluation (Figue 1). The six steps
are:
1. Indentifying the organisation’s current mission, goals and strategies,
2. External analysis,
3. Analysing the organisation’s resources and capabilities (internal analysis),
4. Formulating strategies (SWOT analysis),
5. Implementing strategies, and
6. Evaluating results.

In other words, the strategic management process is gathering the quantitative data and
qualitative data for designing the matrix SWOT and SWOT analysis and designing the
strategic planning for formulation strategy, and the next steps are the implementation of
strategy and evaluation and measure (Figure 2).

Strategic Planning

The function of management consists of planning, organizing, actuating, and controlling

(POAC). Strategic planning is a part of the planning function.

Source: Robbins (2009: 276).

Figure 1 Strategic Management Process

Harold Koontz and Heinz Weihrich (Koontz, 1988: 62, 82) stated that the strategic planning
steps are Purposes or missions, Objectives, Strategies, Policies, Procedures, Rules,
Programs, and Budgets (Figure 3).

Bititci’s observation (Lee, 1998: 527, 531) stated that hoshin kanri (policy deployment) is
not a solution to all planning problems but a process which enables managers to plan
effectively and translate those plans into actions. And the steps for designing strategic

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planning are vision, Business Objectives, Strategic goals, Critical success factors, Critical
task action plan, and Performance measure (Figure 4).
In other words, the writer defined the strategic planning steps as Vision, Missions,
Objectives, Strategies, Policy, Program, Budgets, and Procedures (Figure 6).

Figure 2 Strategic management process for formulation strategy

Source: Koontz (1988: 62).

Figure 3 Hierarchy of plans

Source: Lee (1998: 527, 531).

Figure 4 Steps in Strategic Planning

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Internal and External Environment

Kulwant Singh (Singh, 2004: A9) stated that strategy intent and strategic mission influenced
by external environment consisting of opportunities (possibilities) and threats (constraints)
and internal environment consist of strengths and weaknesses. The variables of strengths
consist of inbound logistics, operations, outbound logistics, marketing and sales, and service.
The variables of weaknesses consist of firm infrastructure, human resources management,
technological development, and procurement.

The other approach for determining the external environment/variables using Michael E
Porter’s Value Chain Analysis (Hitt, 2005: 89) and the external environments consist of
technology, demographic trends, economic trends, political and legal environment, and
socio-cultural environment (Figure 5).

Figure 5 Michael E Porter’s Value Chain Analysis

Fries (2006: 6) stated that the relationship between organization and environment factors
impacts to the factors of strategy.

Source: Fries (2006: 6).

Figure 6 Factors that influenced the strategy

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Research Variables

The two types of research variables are internal and external environments. Internal
environments include strengths and weaknesses and external environments include
opportunities and threats. The variables of strengths consist of inbound logistics, operations,
outbound logistics, marketing and sales, service. The variables of weaknesses consist of firm
infrastructure, human resources management, technological development, and procurement.
The external environments consist of technology, demographic trends, economic trends,
political and legal environment, and socio-cultural environment.

ANALYSIS AND INTERPRETATION

Qualitative Method of Analysis

The BUFE methods (eight steps) for designing the Strategic Planning

Hitt (2005: 7) stated that the strategy is an integrated and coordinated set of commitments and
actions designed to exploit core competencies and gain a competitive advantage. Koontz and
Weihrich (Koontz, 1988: 58) stated that Strategic Planning can be used as a set of concepts or
statements that integrates the organizations’ goals, policies, and action in order to fulfill the
organizations’ future mission. Strategic planning can help the organizations to achieve their
long-term objectives. Strategic planning is the systematic identification of opportunities and
threats that lie in the future. Strategic planning can build expected future trends, data, and
assumptions. Strategic planning is much more action oriented than long range planning. And
the Strategic planning will improve the company performance.

In this paper the writer will discuss the BUFE methods (eight steps) that anyone can design
their own strategic planning using these eight steps. The steps are:
1. Vision,
2. Missions,
3. Objectives,
4. Strategies,
5. Policy,
6. Program,
7. Budgets, and
8. Procedures.

Figure 7 presents the BUFE methods (eight steps) for designing the strategic planning.

Figure 8 presents the definition of every step in the BUFE methods (eight steps) for
designing the strategic planning.

For the purpose of this discussion some of the steps will be discussed separately.

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 Figure 7 The eight steps designing the strategic planning

Figure 8 The definition of the strategic planning

The eight (8) Step discussion

Step 1 - Vision

Determining the strategic direction of a firm involves developing a long-term vision of the
firm’s strategic intent. A long-term vision seems typically at least five to ten years into the
future. A philosophy with goals consist of the image and character of the firm. The ideal
long-term vision has two parts: a core ideology and an envisioned future. While the core
ideology motivates employees through the company heritage, the envisioned future
encourages employees to stretch beyond their expectations of accomplishment and requires
significant change and progress in order to be realized. The envisioned future serves as a
guide to many aspects of a firm’s strategy implementation process, including motivation,
leadership, employee empowerment, and organizational design (Hitt, 2005: 385).

A vision describes what the organization would like to become (Wheelen, 2004: 11). A vision
involves looking to the future, attempting to assess what is needed and the best ways to
supply those needs (Murphy, 2004: 87, 98). A vision defined as an almost “impossible
dream” that provides a direction for the company for the next 10 to 20 years (Kotler, 2009:

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82). All members of the organization should be able to identify themselves with it and it
should help them to feel proud, excited, and be part of something that is much bigger than
themselves. A vision should stretch the organization’s capabilities and image of itself. It
gives shape and direction to the organization’s future.

Vision ranges in length from a couple of words to several pages, the shortest is, the easiest to
remember. Effective vision statements are clear, concise, catchy, and memorable.

In another word, a vision is defined by realizing the impossible dreams in the future.

The Ministry of Energy and Mineral Resources (2007) stated that

The Indonesian government set up the Autonomous Village Energy (Desa
Mandiri Energi/DME) program, the aim of which is to provide 2000 poor,
remote villages with modern energy systems based on renewable energy that
can be sustainably operated by the local community. By January 2009, however,
only 430 villages had been electrified.

The purpose of the project is to improve the rate of implementation of the DME
program and thus to contribute to the dissemination of renewable energy sources
in rural regions of Indonesia. The quality of the implementation process is to be
improved through a structured dialogue between all the involved parties
including self-evaluations and independent evaluations. As a support, several
studies will be prepared in order both to identify examples of good practice and
also to develop a uniform implementation structure as well as proposals for
suitable technologies. The dialogue will be accompanied by a training program
designed to boost the technological capacities of the implementation structures.

Implementation of the measures will speed up the realization of the DME

program and thus the dissemination of renewable energies. Electrification of the
villages will contribute to the economic development of the affected regions and
will also create jobs.

Another participants SUT expressed:

You (the people in the villages) will learn and operate the sophisticated
technology if you have the mindset “doing the things right” and able to carry out
the appropriate training program, so in the future you can operate the (high tech)
processors efficiently.

The vision of National Renewable Energy Strategy (Figure 9) is empowering the

communities (the people in the villages) to sustain and to produce the bio-fuels efficiently
also to maintain the environment.

Step 2 - Mission

When properly constructed, a mission statement should provide a clear, concise description
of an organization’s overall purpose. A mission statement should answer three questions
(Thompson, 2003: 32):
1. Who are we?
2. What do we do?
3. Where are we now?

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 Figure 9 The Vision statement

Figure 10 The Mission statements

The prerequisites of the mission (Armstrong, 2007: 38-39) are Market oriented, Realistic,
Specific, Market environment, Distinctive competencies, and Motivating.

Participant AB expressed:
The regional government has to support for producing the bio-fuels or
alternative energy related to the budgets, human resources training program (the
people in the vilagges) and commercializing the products. The Regional
government designs a small group activities (SGA) in the villages and arranges
the cooperation between regional government, people in the villages and
universities. The SGA will produce the bio-fuels, distribute to the people in the
local villages and the rest should be commercialize, and the Pertamina company
should purchase the products as a national stock.

Figure 10 presents the mission statements of National Renewable Energy Strategy.

Step 3 - Goals/Objectives

Mission and vision, although frequently short statements, are broad, encompassing and far-
reaching. They can often seem overwhelming and perhaps even impossible to achieve. Goals

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and objectives create the bite size pieces, the road map and manageable stepping stones to
achieve the mission, make the vision a reality, and navigate the course we have set for our
business, or for ourselves.

Goals of the bigger fuzzy things and objectives are the SMART (Amstrong, 2007: 38-39):
Specific, Measurable, Attainable (accountable), Rewarding (realistic), and Timed
(timeliness).

The definition of the objectives are:

1. The desired results (Murphy, 2004: 87).
2. A desirable direction in which we want to move (Dervitsiotis, 1981: 9).
3. The ends toward which activity is aimed (Koontz 1988: 62).
4. The end results of planned activity (Wheelen, 2004: 12).

The prerequisite of the objectives should be as specific as possible.

Figure 11 presents the objectives statement of National Renewable Energy Strategy.

Figure 10 The Objectives statements

Step 4 - Strategy

For years the military used the word “strategies” to mean grand plans made in the light of
what is believed and adversary might or might not do. While the term “strategies” still
usually has a competitive implication, managers increasingly use it to reflect broad areas of
an enterprise operation.

The definitions of the strategy are:

1. As plan, play, pattern, position, and perspective (5 P’s Mintzberg) (Hubbard, 2004:
11).
2. The broad program for defining and achieving an organization’s objectives; the
organization’s response to its environment over time (Stoner, 1995: 266).
3. The decisions and actions that determine the long-run performance of an organization
(Robbins, 2009: 273).
4. The act of the general or plan the destruction of one’s enemies through effective use
resources (Calingo, 1997: 5).

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 5. The act of the general or a general leading an army (Calingo, 1997: 5).
6. Both proactive/planned (intended and deliberate) and reactive (adaptive) (Thompson,
2001: 12).
7. Strategy is the skill in managing or planning (Feurer, 1995:11).

H Igor Ansoff (Kotler, 2009: 85) stated that the prerequisite of the strategy are Market
penetration, Product development, Market development, and Product diversification.

Another participant YO expressed:

Nusa Tenggara Timur is one of the potential region to produce an alternative
energy using raw materials such as the sorghum, and Borassus flabellifer or
palmyra (lontar or siwalan). There are many non-productive fields. The regional
government is not likely to expresse seriously – sometimes is very bombastics
and yet they do nothing, so the people in the villages always ask – how will the
alternative energy continue? The regional govenment concerns about the
alternative energy but does not focus, always talk about the equipments or
technology selection. The contraint is water supply. The regional govenment
should not talk only – use political will –say nothing – have to do the reality.

Figure 12 presents the strategy statement of National Renewable Energy Strategy.

Figure 12 The strategy statements

Step 5 - Policy

Policies also are plans in that they are general statements or understandings which guide or
channel thinking in decision making. Not all policies are “statement”; they are often merely
implied from the actions of managers.

The definitions of the policy are:

1. A standing plan that establishes general guidelines for decision making. (Stoner,
1995: 296). And a standing plan is an established set of decisions used by managers
to deal with recurring or organizational activities; major type are policies,
procedures, and rules.
2. Plans in that they are general statements or understanding which guide or channel
thinking in decision making (Koontz, 1988: 64).

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 3. A broad guideline for decision making that links formulation of strategy with its
implementation (Wheelen, 2004: 14).

Another participant AB expressed:

The lecturers in universities should provide their working time to observe this
product untill 15%.

Another participant RSj expressed:

This alternative energy will create new jobs. The government should arrange
the condusive rules, or give the tax holiday to the investors.

Figure 13 presents the policy statements of National Renewable Energy Strategy.

Figure 13 The policy statements

Step 6 - Program

Programs are a complex of goals, policies, procedures, task assignments, steps to be taken,
resources to be employed, and other elements necessary to carry out a given course of action;
they are ordinarily supported by budgets.

The definition of the program is activities needed to accomplish the plan.

Figure 14 presents the program statements of National Renewable Energy Strategy.

Figure 14 The program statements

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Step 7 - Budgets

A budget is a statement of expected results expressed in numerical terms. It may be referred

to as a “numberized” program. In fact, the financial operating budget is often called a “profit
plan.” It may be expressed either in financial terms or in terms of labor-hours, unit of
product, machine-hours, or any other numerically measurable term. It may deal with
operations, as the expense budget does; it may reflect capital outlays, as the capital
expenditures budget does; or it may show cash flow, as the cash budget does.

Another participant Har expressed:

We can invite the foreign investors, but if we can use the local investors is better
than the first.

The definition of the budgets is the cost of programs or some budgets are also control
devices.

Figure 15 presents the budgets statement of National Renewable Energy Strategy.

Figure 15 The budgets statements

Step 8 - Procedures

Procedures are plans that establish a required method of handling future activities. They are
guides to action, rather than to thinking, and they detail the exact manner in which certain
activities must be accomplished. They are chronological sequences of required actions.

Another participant CY expressed:

Be carefull, use the equipment in good procedures, the highest efficiency,
prepare every raw material and equipment to be used, sequence the processes.
And be concerned with the environment or ecology.

The definition of the procedures is sequence of steps needed to do the job.

Figure 16 presents the procedures statement of National Renewable Energy Strategy.

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 Figure 16 The Procedures statements

Quantitative Method of Analysis using Factor Analysis

The output of the quantitative analysis are eigen value, components, and factor analysis
(Tables 1 and 2, Figure 17).

Tables 1 and 2 and Figure 17 show the reducing research variables (15) to three (3) factors,
named distribution channel, human resources training program, and manufacturing
technology, and the total variance explained is 65,68% exceeding 50%. It means the
information explained by the three factors is good.

Tabel 1
Rotated Component Matrix(a)

Component
1 2 3
X111_PBB .281 .577 .133
X112_MES .069 .572 .605
X113_GUD .795 .250 .230
X114_DIS .788 .127 .099
X115_TRN .464 .599 .060
X121_FIN .557 .465 .225
X122_DEV .085 .870 .111
X123_PRO .135 .570 .567
X124_LAB .332 .557 .467
X211_SEL .464 .316 .662
X212_MAN .439 -.165 .708
X213_BUD .629 .062 .584
X221_REG .544 .390 .231
X222_EKO .043 .306 .724
X223_MAR .833 .192 .166

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser
Normalization.
a Rotation converged in 13 iterations.

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 Tabel 2
Total Variance Explained

Component Rotation Sums of Squared Loadings

Total % of Variance Cumulative %
1 3.795 25.301 25.301
2 3.120 20.802 46.102
3 2.937 19.578 65.680
Extraction Method: Principal Component Analysis.

Figure 17 Confirmatory Factor Analysis Model

Propositions

The quantitative result is reducing the fifteen (15) research variables to become three factors
and the qualitative results - the final objective is to increase the prosperity or wealth of the
people in the villages. The following propositions (Figure 18) are presented:
P1: The increasing of the raw materials supply will increase the production capacity
using the higher technology proportionally.

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 P2: The increasing of the raw materials supply and the increasing of human resources
training program for the people in the villages and using the higher technology will
simplify the processing.
P3: The increasing of the raw materials supply and the increasing of human resources
training program for the people in the villages and using the higher technology will
increase the prosperity or wealth of the people in the villages.

P4: The increasing of the raw materials supply and the increasing of human resources
training program for the people in the villages and using the higher technology and
improving the distribution channel will increase the prosperity or wealth of the
people in the villages.

The main proposition is the increasing of the raw materials supply and increasing the human
resources training program for the people in the villages and using the higher technology and
improving the distribution channel and the concern for the environment will increase the
prosperity or wealth of the people in the villages.

Figure 18 Propositions

CONCLUSIONS

The factor analysis reduced the fifteen research variables to three factors named “distribution
channel,” “human resources training program,” and “manufacturing technology.”

The eight steps designing the strategic planning are Vision, Missions, Objectives, Strategies,
Policy, Program, Budgets, and Procedures.

The main proposition is the increasing of the raw materials supply and increasing the human
resources training program for the people in the villages and using the higher technology and
improving the distribution channel and the concern for the environment will increase the
prosperity or wealth of the people in the villages.

Implications

There are two implications of the research namely theoretical implications and practical
implications.

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Theoretical implications

The research findings is the steps for designing the strategic planning which are Vision,
Purposes or missions, Objectives, Strategies, Policies, Programs, Budgets, and Procedures.
This finding will improve the statements of the past researchers - Harold Koontz and Heinz
Weihrich (Koontz, 1988: 62, 82) who stated that the hierarchy of the plans are Purposes or
missions, Objectives, Strategies, Policies, Procedures, Rules, Programs, and Budgets. This
finding is supported by the Bititci’s observation (Lee, 1998: 527, 531) who stated that hoshin
kanri (policy deployment) is not a solution to all planning problems but a process which
enables managers to plan effectively and translate those plans into actions. And the steps for
designing strategic planning are vision, Business Objectives, Strategic goals, Critical
success factors, Critical task action plan, and Performance measure. The findings provided
the statements of Thomas L Wheelen and J David Hunger (Wheelen, 2004: 9-10) who stated
that Strategic Management Process consist of four basic elements: Environmental scanning,
strategy formulation (missions, Objectives, Strategies, Policies), Strategy implementation
(Programs, Budgets, and Procedures), and Evaluation and Control (Performance).
Environmental scanning is the monitoring, evaluating, and disseminating for information
from the external and internal environments to the key people within the corporation. Related
to the technology, Khalil (2000: 7) who stated that the wealth of creation involves more than
just money; it may encompass factors such as enhancement of knowledge, intellectual capital,
effective exploitation of resources, preservation of the natural environment, and other factors
that may contribute to raising the standard of living and quality of life. Technology generates
wealth when it is commercialized or used to achieve a desired strategic or operational
objective of an organization. While the underlying premise for the Management of
Technology field is that technology is the most influential in a wealth-creation system, there
are other factors (labor, natural resources, market, public and environmental policy, and
capital) that contribute to the system.

Practical Implications

The findings of the study are useful for lecturers, administrators, project managers, and
practitioners easily.

Limitations

The findings of the study did not discuss about business ethics, and values.

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 STRATEGI PENGEMBANGAN
ENERGI TERBARUKAN (BIO-FUEL) DI INDONESIA
(NATIONAL RENEWABLE ENERGY/BIO-FUEL STRATEGY)

MAKALAH

Oleh:

Bambang Sugiyono Agus Purwono

PDIM-FE-UB-Malang

Dipresentasikan pada acara

The 5th Doctoral Journey in Management
Tuesday, 3rd August 2010

Universitas Indonesia
Depok
Indonesia

2 0 10

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