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Go Back       Himalayan Journal of Economics and Business Management | Volume:4 Issue:3 | May 29, 2023
100 Downloads272 Views

DOI : 10.47310/Hjebm.2023.v04i03.011       Download PDF       HTML       XML

Decision Analysis on Corporate Structure to Maintain the Financial Sustainability: A Case Study of an Indonesian Steel Company

Fadil Alhamdi1, Yos Sunitiyoso, S.T. M.Eng. Ph.D.2

1School of Business and Management, Institut Teknologi Bandung, Indonesia

2School of Business and Management, Institut Teknologi Bandung, Indonesia

*Corresponding Author

Fadil Alhamdi

Article History

Received: 15.05.2023

Accepted: 20.05.2023

Published: 29.05.2023

Abstract: The change in corporate structure is one of the companies’ strategies to maximize their profit. In some cases, companies change their corporate structure to improve their financial condition. As the case study in this article, an Indonesian steel company has a plan to change its corporate structure from an operating company to a holding company due to the financial problem that coming from a huge amount of debt. However, the decision on the change of corporate structure needs to be justified. This article aimed to analyze the decision using the Analytical Hierarchy Process (AHP) method. From 5 criteria and 14 criteria obtained from the interviews and questionnaires, the result of the AHP calculation shows that the Ability to Pay the Debt, Business Size Growth, and Business Portfolio are the most important sub-criteria to determine the suitable corporate structure for the company. After assessing the corporate structure options based on each sub-criterion, it is determined that the holding corporate structure is the more suitable corporate structure for the company to solve its financial problem. This article provides insights into how a decision analysis is performed to determine the suitable corporate structure for a company.

Keywords: Corporate structure; financial condition; holding structure; AHP

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