Does leadership matter in managing the village-owned enterprise?

• Kumba Digdowiseiso1 Department of Management, University of National, Jakarta, Indonesia
• Heru Dian Setiawan, Eko Sugiyanto Department of Public Administration, University of National, Jakarta, Indonesia
• Suharyono . Department of Management, University Of National, Jakarta, Indonesia

Abstract

The establishment of the village-owned enterprise (Badan Usaha Milik Desa –
BUMDes), as stipulated in Law No. 6/2014 on Village, is an effort to increase economic
growth, together with the equitable distribution of assets to the village community. It is
expected to be a pillar of economic activity in the village that serves as an institution that
remains committed to village characteristics. However, the existence of BUMDes has not
fully produced satisfactory results in terms of continuation of the programs and
profitability. Therefore, this qualitative study aims to determine the factors that influence
the village head’s leadership. Using Northouse’s (2013) concept, this study finds that both
task and relationship behaviour are very important factors to achieve success in managing
BUMDes in Indonesia.