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Top1. Introduction
The level of competition in the 21st century is getting tense as the implementation of the free trade era, such as AFTA (Asian Free Trade Area), APEC (The Asia Pacific Economic Cooperation), NAFTA (North America Free Trade Area), and the signing of various bilateral agreements as well as multilateral, which was initially to support free competition in trade, such as the GATT (General Agreement on Tariffs and Trade) and EU (European Union). Anticipating the era of free competition, a number of companies began to rearrange and improve their strategies by reviewing organizational performance and conducting intense evaluations of the company's internal competencies.
Developing a world class and excellent institutions require a well financial, operational (human resources, technology, business networks, strategic knowledge, reliable culture) and administration status. These circumstances also should be supported by good leadership, governance, risk management, and critical management. It is impractical to maintain an excellent performance without a willingness to deal with rapid changes, ranging from technological changes, customers preferences, regulations, and so forth. A great performance is not possible without a trusted relationship between the organization and the stakeholders. (A.B.Sutanto: 2010).
The construction sector has an impact on almost every sector of the economy, including roads, dams, irrigation, housing, schools and other construction that are a physical basis for developing and improving living standards. In most developing countries, increasing building capacity and capability, including increasing the cost efficiency, time and quality of construction work is a crucial factor.
As a business that provides products in the form of physical infrastructure and facilities, the construction industry has a very fundamental role in national development. In Indonesia, the construction sector is one of sector that shares a large contribution to Gross Domestic Product (GDP). Over the past 3 years (2008-2010), the construction sector has increased every year, and reach 10.3% in 2010 of GDP (BPS, 2011). However, the current conditions indicate that the increasing role of construction services is still not optimal. As part of the world community, Indonesia also cooperates in trade and services, including the construction industry with other countries. The level of competition of the Indonesian construction industry still needs to be improved so that it can compete, both on the international stage and within its own country. The construction service industry is an industry that includes all parties related to the construction process including professional staff, construction executors, and also suppliers who together meet the needs of industry players (Hillebrandt, 1985). Statistical data show that in the developing countries the construction sector contributes and has a significant influence on national development (World Bank, 1984).
The construction industry itself is commonly defined in the form of activities and products. In general, activities included are planning, design, construction, repair and maintenance, and demolition, while the products include: buildings, airports, and ports, electrical, communications, reclamation, channels, dams, pipelines, canals, highways, bridges, railroads, reservoirs, and tunnels (Ofori, 1990).
As essential for economic growth, the construction industry has several roles, including providing physical infrastructure and facilities, in order to support business and employment opportunities; encourage the growth of other sectors; donate gross domestic product; supporting savings in foreign exchange users and increasing foreign exchange receipts; as a medium for transferring technological knowledge, forming work ethics, discipline, awareness of responsibility, efficiency, effectiveness; supporting national resilience; as well as the media for the formation of a sense of national pride (Trisnowardono, 2002).
In macroeconomics, there are two categories that affect company performance. First, a national environment that influences a country's GDP, interest rate and inflation rate, the efficiency of the financial system, level of competition from abroad, and stability of the political environment that has an influence on the company's marketing growth during the planning period. Second, multinational companies with an international environment that can affect the level of growth of the market, forces that influence management to estimate exchange rates, cultural differences, and most importantly the political environment (Clark, Chiang, et. Al., 1989). In addition, failure to understand political, economic and legal conditions can influence the company's strategy in making decisions related to global markets (Han and Diekmann, 2001).