ASSET CAPABILITY, STRATEGIC ORIENTATION, AND INTERNAL CONTROL IN ASSET MANAGEMENT

Abstract

This study aims to analyze the influence of asset management capability and strategic orientation on asset management effectiveness, with internal control effectiveness serving as a mediating variable at the Directorate General of State Assets (DJKN). A quantitative research approach was employed using Partial Least Squares-Structural Equation Modeling (PLS-SEM) with a sample of 102 DJKN employees. The findings reveal that asset management capability has a positive effect on internal control effectiveness but does not exert a significant direct effect on asset management effectiveness, and internal control effectiveness does not mediate this relationship. In contrast, strategic orientation demonstrates a positive and significant effect on both internal control effectiveness and asset management effectiveness, and the relationship between strategic orientation and asset management effectiveness is significantly mediated by internal control effectiveness. These results highlight the critical role of strengthening strategic orientation and internal control mechanisms, while indicating that improvements in asset management capability must be complemented by strategic initiatives and effective controls to generate direct impacts on state asset management performance.