The Application of Good University Governance to Intellectual

Capital on University Medan Area

Linda Lores

, Mas'ut

, Iskandar Muda

and Syafruddin Ginting

Student Postgraduate, Faculty Economic and Business, Universitas Sumatera Utara, Medan Indonesia

Lecture Faculty Economic and Business, Universitas Sumatera Utara, Medan Indonesia

Keywords: Good University Governance, Human Capital, Structure of Capital, Relational capital, Performance of

institutions

Abstract: The purpose of the study is to find out the effect of the application of the principle of Good University

Governance to the realization of Intellectual Capital (IC) and its impact on the performance of institutions in

the Universitas Medan area environment. The method used is explanatory research. This research sample is

a permanent lecturer and kopertis lecturer who is on duty and an employee at UMA, Samples are drawn by

purposive method. Research data includes primary data and secondary data. The data in this study was

obtained by distributing questionnaires. The method of data analysis using SPSS From the distribution of

100 questionnaires that can be analysed as many as 75 questionnaires so that the response rate in this study

is 75 %. In results show that the implementation of University Governance has a significant and significant

effect on Human Capital and Relationship Capital. In application of University Governance has no effect on

the Capital Structure and University Governance has an impact on the performance of institutions in each

field in the Universitas Medan area.

1 INTRODUCTION

Intellectual capital is an important thing that must be

managed by Higher Education, moreover

Knowledge and Expertise as outputs and inputs at a

university. The main output of PT is knowledge, and

must be transferred in the results of research,

publications, students, and for the benefit of the

users. The intellectual capital approach is very

important at universities, mainly due to the fact that

“knowledge” is the main output and input for the

University (Ramirez,Corcoles Y, 2013). According

to (Elena, S, 2004)Management of intellectual

capital is important at the university mainly due to

the fact that the university's main goal is the

production and dissemination of their knowledge

and investments that are more important in research

and human resources. Knowledge that must be

transferred is the duty of the Higher Education so

that educational goals can be achieved and

competition between universities can be avoided by

making the right competitive strategy in the

management of Higher Education. This is a difficult

task for the university or PT in the creation of

intellectual capital owned. Good management

creates good results. One mechanism of higher

education in dealing with such competition is by

displaying excellence and resources possessed

(Constantine, 2005).

Colleges here in after abbreviated as PTS is a

university that was founded and / or held by the

public (UU, 2012) to implement the Higher

Education based mandate given academic

Government Delegation e d an arbitrary Resource

provided by the Foundation. In the implementation

of quality education and Accountable management

necessary governance arrangements (Governance)

PTS good fit with the purpose of higher education.

The term governance refers to the decision-making

process in an institution where the institution

develops policies and objectives to achieve them and

monitors the achievement of organizational goals

1202

Lores, L., Mas’ut, ., Muda, I. and Ginting, S.

The Application of Good University Governance to Intellectual Capital on University Medan Area.

DOI: 10.5220/0009510012021207

In Proceedings of the 1st Unimed International Conference on Economics Education and Social Science (UNICEES 2018), pages 1202-1207

ISBN: 978-989-758-432-9

(Carnegig D,Garry Jacquiline Tuck, 2010) states that

governance is an organizational arrangement in

allocating and regulating organizational resources.

Good University Governance (GUG) reflects the

success of the university that produces qualified

graduates who are ready to compete in the world of

work. D requires high work and discipline in

educating, as well as teaching cultural values, ethics,

community relations and quality educators.

Based on the above problems, the authors are

interested in nailing research at the University

Medan Area to see how the implementation of good

governance is carried out by the Field University

Medan Area with several strategies and policies that

can create University goals. This research focuses on

the application of good university governance to

create Intellectual capital at the University Medan

Area. Research purposes

1. To find out the application of Good University

Governance has an effect on Human Capital

2. To find out the Good University Governance

has an effect on the Capital Structure

3. To know Good University Governance is

influential towards Relational Capital

4. How is the Impact of good University

Governance Implementation on University

Performance

2 THEORICAL FRAMEWORK

2.1 Intellectual Capital

Intellectual capital is the knowledge, experience, and

capabilities of employees, as well as sources of

knowledge stored in databases, systems, work flows,

cultures, and management philosophies within the

organization. In (European Commission, 2006)

Intellectual capital (IC) The combination of

intangible resources and activities “allows

organizations to transform a bundle of material,

financial and human resources in a system capable

of creating stakeholder value” Intellectual capital

has a significant interest in gaining competitive

advantage and for an organization's capacity to

create value (Stewart, T.A., 1997) (Sudarsanam S

Sorwar, G, Marr,B, 2005) Sudarsanam et al., 2003)

(Sudarsanam S Sorwar, G, Marr,B, 2005).

The university's strategic objectives are defined

for each component of intellectual capital such as

human, structural and relational components

(Babayi,NF:Bohloli,z and Rahili,GH.R, 2012).

(Leitner K, H, 2002) has developed a model of

academic intellectual capital valuation based on a

systematic approach that relates to the three main

components of intellectual capital.

2.2 Human Capital

Human Capital consists of knowledge, skills and

abilities of employees. Forms of Human Capital

combine the capabilities of Employees in

organizations that help organizations solve business

problems. Human capital is internal capital among

individuals and organizations are unable to take over

and own them. Intellectual capital is described for

universities and higher education institutions. The

university's strategic objectives are defined for each

component of intellectual capital such as human,

structural and relational components

(Babayi,NF:Bohloli,z and Rahili,GH.R, 2012).

2.3 Capital Structure

Structural capital can be of any kind that exists in

organizations and supports employees (human

capital) in their work. Structural capital is under the

organization ownership, even when employees leave

the organization, it exists there (Lopez,D.C, 2008).

Structural Capital relates to the ability of the

organization to fulfil the organization's routine

processes and structures that support employees'

efforts to produce optimal intellectual performance

and overall business performance, for example: the

company's operational systems, manufacturing

processes, organizational culture, management

philosophy and all forms of intellectual property

owned by the organization.

2.4 Relational Capital

Relational Capital is a market relationship, power

relations and cooperation between companies,

educational institutions and people, which comes

from a strong sense of belonging and cooperative

capacity to progress. There are studies that apply

quantitative, empirical, and econometric techniques

in an effort to verify the existence of relational

capital and the importance of innovation activities in

companies or organizations. Development of one

goal requires cooperation with other parties that are

mutually beneficial. Relational capital is more

appropriately linked to the world of education

compared to customer capital. Relationships in the

world of education are not simply termed customer

relations.

2.5 Principles of Good Corporate Governance

According to Artikel 3 of (regulation of the minister

of state Per-1/MBU/2011, 2011):

The Application of Good University Governance to Intellectual Capital on University Medan Area

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1. Transparency (transparency), namely openness

in carrying out the decision-making process and

openness in disclosing material and relevant

information about the company;

2. Accountability, namely clarity of function,

implementation and Organ accountability so

that company management is carried out

effectivel

3. Responsibility, which is the suitability in the

management of the company towards sound

laws and regulations and corporate principles;

4. Independence (independence), which is a

condition in which the company is managed

professionally without conflict of interest and

influence / pressure from any party that is not in

accordance with the laws and regulations and

healthy corporate principles;

5. Fairness, namely justice and equality in

fulfilling the rights of Stakeholders

(stakeholders) arising based on agreements and

laws and regulations.

University Governance is in the form of

behaviour, methods or methods used by an

institution universities to utilize all the potential and

elements that are owned optimally (Ministry of

Education, 2004).

3 RESEARCH METHOD

This type of research is explanatory research with a

survey method, the population in this study were all

Permanent Lecturer lecturers, Non-Permanent

Special Lecturer foundations and Lecturer Kopertis

University Medan area andand permanent

employees who are directly related to academics.

And the sampling method is purpose sampling The

type of research data is quantitative data, data

sources are primary data and secondary data.

Primary data is done by distributing questionnaires

to respondents in this study. Secondary data,

lecturers and permanent employees and the data on

the activities undertaken to realize the impact

Intellectual

capital as well as the form of management IC.

questionnaire filled out using the Likest scale 1 to 5.

Independent variable, we can view University

Governance as the application of the basic principles

of the concept of “ Good Governance “ in

governance systems and processes in higher

education institutions, through various adjustments

made based on other values that must be upheld in

the implementation of higher education in particular

and education in general. Principles of University

Governance that are measured include: Principles of

Transparent Personality, Principles of

Accountability, Principles of Responsibility,

Principles of Independence, Fairness Principles

Dependent variable is Human capital, indicators of

human capital is learning and education, experience

and expertise, innovation and creativity, Structure

Capital Indicator of structure capital is a system and

program, research and development, patent and

Relational capital is indicators of relational capital

are partnership strategies, licensing and cooperation

agreements, student relations, alumni and graduate

users, customer knowledge. Data Analysis uses

SPSS as an analytical tool.

4 ANALYSIS

4.1 Research Respondents

The questionnaires were sent as many as 100

questionnaires where the respondents in this study

were all permanent lecturers of the Permanent

Lecturer foundation, Non-Permanent Special

Lecturer and DPk lecturers as well as employees

who served in the University Medan area with a

work period of more than 1 year. The questionnaires

that were worth the results of the analysis were 75

questionnaires where the on-rate responder in this

study was 75 %. Respondents who participated in

this study were respondents who participated in this

study age; 40 years 40%, aged 31-40 years 37%,and

<30 years old 23% and years of service; 5 years (52

%), 2 to 3 years 30% and less than 2 years 18%, and

employee education S1(100%), for educated lecture

S2 97%, S3 3%.

Data Testing

Instrument Test, the testing of the research

instrument was conducted with conclusions, the

questions in the University Governance indicator

were 18 questions, after being tested the questions

that did not meet the requirements were issued,

namely X1.5, X1.2, X1.3, so the number of

questions became 15 questions. For variable Y1, the

number of questions is 13 questions, which do not

meet the requirements of Y1.3, Y1.7, Y1.12 Y1.13,

so the number of questions becomes 9 questions. For

variable Y2, the question items requirements are 11,

which do not meet the requirements of Y2.3 into 10

questions. The variable Y3 question 10 and those

that do not meet the requirements are Y3.5 so that

they become 9 items that are worth using. After

being tested again the questions in the indicator as a

whole are valid.

UNICEES 2018 - Unimed International Conference on Economics Education and Social Science

1204

Classic Assumption Test

In the Normality Test shows the data tested normal

distribution is shown in the Kolmogorov-Smirnov

Test column for good governance governance

(log_x) with a significance value of 0.473> 0.05,

Intellectual capital (log_y) with a significant value

of 0.438> 0.05.

4.2 HypothesisTesting

Coefficient of determination

Table 1: Determinan Coefisien HC

Model Summary

Model R R Square

Adjusted R

Square

Std.Error of the

Estimate

1 .328

.108 .95 3.00095

a.Predictors: (Constant), X

Based on the table above, it can be seen that 32.8%

of the relationship between GUG and Human capital

, and GUG affecting Human Capital is 10.8% and

the effect is influenced by other variables not

discussed here.

Table 2: Determinan Coefisien SC

Model Summary

Model R R Square

Adjusted

R Square

Std.Error of the

Estimate

1 .061

.004 -.010 3.44307

a.Predictors: (Constant), X

b.Dependent Variable: Y2

Based on the table above, it is 6.1% between GUG

and capital structure. GUG affects 0.04% capital

structure which means very little, and the rest is

influenced by other variables not included in this

study.

Table 3: Determinan coefisien RC

Model Summary

Model R R Square

Adjusted R

Square

Std.Error of the

Estimate

1 .343

.117 .105 3.00849

a.Predictors: (Constant), X

b.Dependent Variable: Y3

Based on the table above it is 34.3 %% of an GUG

relationship with relation capital . GUG affects the

relation capital of 11.7% and the rest is influenced

by other variables not included in this study.

Hypothesis 1 University Governance influences

Human Capital

Table 4: Coefficients HC

Model

Unstandardized

Coefficients

Standardized

Coefficients

Sig.B Std.Erro

Beta

1 (Constant)

37,047 6,510

5,690 .000

X .249 .084 .328 2,967 .004

a.Dependent

Variable: Y1

Based on table 4. The test results show the level of

sig produced 0.004 <0.05 thus the hypothesis is

accepted and University Governance has a positive

effect on human capital. This indicates that

University Governance has a positive effect or role

in the formation of human capital consisting of

learning and education, experience and expertise and

innovation and the creativity of lecturers at

University Medan Area. The better the

implementation of the University Governance

principles, the better quality human capital will be

created. The better implementation of the university

governance principle will create creativity and

employee innovation, and also encourage more

active leadership to carry out education and training

for employees and lecturers in the University Medan

Area environment.

Hypothesis 2 University Governance has an effect

on Stucture Capital

Table 5: Coefficients SC

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients

Sig.B

Std.Erro

Beta

1 (Constant)

46,949 7,470

6,285 .000

X .051 .96 .061 .525 .601

a. Dependent

Variable: Y2

Based on table 5 above sig 0.601> 0.05, it means

that hypothesis 2 is rejected and concluded

University Govenance has no effect on capital

structure This indicates that the implementation of

the university governance principle does not create

university structure capital consisting of systems and

programs, patents, and research activities and

development carried out by the university. This

means that even though university governance is

implemented in this variable it does not make the

capital structure increase.

Hypothesis 3 Effect of University Governance on

Relational Capital

The Application of Good University Governance to Intellectual Capital on University Medan Area

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Table 6: Cofficients RC

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients

T Sig.B Std.Erro

Beta

1 (Constant)

22,818 6,527

3,496 .001

X .262 .084 .343 3.117 .003

a.Dependent Variable:

Based on the results of table 6, it can be seen sig -

0.03 <0.05 means that hypothesis 3 is accepted that

university governance has an effect on relational

capital which consists of partnership strategies,

licenses and cooperation agreements, student

relations, alumni and graduate users, customer

knowledge. This also indicates that the better the

implementation of university governance at the

University, the university will better understand

customer knowledge, closer relationships with

customers and further develop partnership strategies

with related parties.

5 RESULTS

The results of the above can be seen that the

aplication University Governance principles to

Intellectual capital consisting of Human capital,

Capital structure and Relationship capital can be

seen that Variable Indicators Human capital and

relationship capital are influenced by the application

of University Governance while capital structure is

not influenced by University Governance. The

impact on performance in several institutions at

Medan Area University further enhances the

principles contained in University Governance in

human capital and Relational Capital. Leaders and

academics continuously improve technology in the

field of knowledge transformation and development

for students, lecturers and employees. As the

implementation 1). More intensive conduct training

and employee competency development, 2).

Training and coaching for students who want to

compete. 3). Providing training, workshops and

improving competence of lecturers. 3). Conduct

partnerships and collaborations with government and

private agencies to create shared interests in the field

of education and development. Achieving

educational goals is a common goal, the University

provides each forum for activities carried out. Some

things can be seen clearly as the impact of work with

1). the more creative students take part in

entrepreneurial olympiade and competence in the

scientific field of each study program 2). Student

participation in the field of entrepreneurship can be

relied upon by participating in the PKM offered by

the Government. .3). Lecturers assigned to take part

in training and skill development, and employees are

given IT training for services. In the Capital

Structure section, University Governance has not

had much impact on capital structure, especially in

the field of research, and community service and

patent rights on products produced in Community

Service still have not achieved the desired target.

The actions taken by the University leadership

continue to try to motivate and implementation

several things 1). The Research and Community

Service institutions intensively carry out training

activities, workshops that can help lecturers in

creating works. 2). Motivate lecturers to active in

participating in research and service and publish

every work created. 3). The leadership makes

policies related to the activity in making scientific

work.

6 CONCLUSION

1. University governance has a positive and

significant effect on Human Capital, meaning

that the application of university governance can

increase human capital at the University of

Medan area

2. University governance does not affect structure

capital, meaning that university governance has

not been able to create a capital structure at the

university field area.

3. University governance has a positive and

significant effect on relational capital, meaning

university governance can improve relational

capital at the field area university.

Suggestion for University governance has not been

able to create a capital structure, In order to create a

capital structure it is expected that the university can

improve the capital structure measured by the

system and program, research and development,

patents through Research and community service

institutions (LP2M) that have been built with

activities and policies that will be applied to

motivate researchers and lecturers.

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