FINAL PROJECT OF INTERNATIONAL BUSINESS PRACTICE

IMPROVING EMPLOYEE COMPETENCE OF MSMES SEDANA

MERTA IN FACING THE ASEAN ECONOMIC COMMUNITY

By:
NI Kadek Raras Komalasari
1815744049/15
6A MBI

INTERNATIONAL BUSINESS MANAGEMENT

BUSINESS DEPARTMENT
BALI STATE POLYTECHNIC
2021
 PREFACE

Praise be to Ida Sang Hyang Widhi Wasa for blessings and grace, the author was
able to complete the final project with the title is "IMPROVING EMPLOYEE
COMPETENCE OF MSMES SEDANA MERTA IN FACING THE ASEAN
ECONOMIC COMMUNITY" on time.

This final project is prepared to fulfill the International Business Practice course’s
project. In addition, this project aims to add insight on improving the competence
of MSME employees in the export sector.

The author realizes that this project is still far from perfect. Therefore, suggestions
and constructive criticism are expected for the perfection of this final project.

Badung, July, 20th 2021

Ni Kadek Raras Komalasari

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 TABLE OF CONTENT

PREFACE ........................................................................................................... i

TABLE OF CONTENT ..................................................................................... ii

SUMMARY ....................................................................................................... iii

CHAPTER I INTRODUCTION ...................................................................... 1

1.1 Background.................................................................................................... 1
1.2 Problem Formulation ..................................................................................... 2
1.3 Objectives ...................................................................................................... 2
1.4 Benefits.......................................................................................................... 3
1.5 Limitation ...................................................................................................... 3
CHAPTER II LITERATURE REVIEW .......................................................... 4

2.1 Theory Study ................................................................................................. 4

2.2 Previous Research .......................................................................................... 8
CHAPTER III RESULTS AND DISCUSSION ............................................. 10

3.1 How to Improve Employee Competence at MSMEs Sedana Merta in the Export
.......................................................................................................................... 10
3.2 Steps in Improving Employee Competence at MSMEs Sedana Merta in the
Export Sector So that they are Ready to Face AEC ............................................ 12
CHAPTER IV CONCLUSION ....................................................................... 15
4.1 Conclusion ................................................................................................... 15
4.2 Suggestions .................................................................................................. 15
REFERENCES ................................................................................................ 16

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 SUMMARY
MSMEs Sedana Merta is one of MSMEs in Penarungan Village. MSMEs
Sedana Merta sells Hindu religious ceremonial tools. Their products have premium
quality but the prices offered are affordable. This is an opportunity for MSMEs
Sedana Merta to enter the international market. MSMEs Sedana Merta wants to
increase its market share to foreign markets, therefore it is necessary to have a
workforce who understands and is able to carry out international trade transactions.
This is also supported by the existence of the Asean Economic Community. So that
increasing employee competence is very much needed for MSMEs Sedana Merta
in facing the AEC in the global trade sector. Based on these problems, the authors
formulate the formulation of the problem, namely how to improve employee
competence at MSMEs Sedana Merta in the export sector? and what are the steps
to improve employee competence at Sedana Merta MSMEs in the export sector so
that they are ready to face the AEC?. The author's goal is to find out ways and steps
to improve employee competence at MSMEs Sedana Merta in the export sector so
that they are ready to face the AEC. The benefits that the authors expect through
this case study are as an additional reference for MSMEs Sedana Merta and other
MSMEs in improving employee competence to be ready to face the AEC and as
consideration for MSMEs Sedana Merta and other MSMEs in improving employee
competencies as well as input for MSMEs Sedana Merta and other MSME actors.

The ways that MSMEs Sedana Merta can take in increasing employee
competence in the export sector are by conducting training and development using
On the Job Training, E-Learning and Simulation methods. Furthermore, for the
steps or processes that can be applied by MSMEs Sedana Merta in improving
employee competence in the export sector. These steps include determining
employees and program patterns, developing and training processes, and evaluating
programs. As for the provision of materials, it is done by inviting instructors who
come from export practitioners, exporters and in collaboration with universities

iii
 CHAPTER I

INTRODUCTION

1.1 Background
Currently the world community is in the era of the industrial revolution 4.0
which is an era that utilizes technology in it. This rapid technological
development has a significant impact on all sectors, so that many social
activities can be carried out effectively and efficiently. One of them is in terms
of business. In ancient times, people were only able to transact on a limited
basis. However, with the convenience of today's technology, people are able to
transact with sellers outside the region to between countries. This global trade
activity is a challenge as well as an opportunity for all business actors,
including small micro and medium enterprises (MSMEs).

Micro, Small and Medium Enterprises (MSMEs) are businesses run by

individuals, households, or small business entities. Based on data obtained
through www.bps.go.id, the growth of micro-enterprises in Bali has increased
from 2017-2019. The table of micro business growth is presented as follows:

Micro
Province Number of Companies by Province (Unit)
2019 2018 2017
BALI 156291 114363 140097
With the increase in the number of micro enterprises, this is an opportunity
for MSME actors to compete globally through import-export activities. Based
on data obtained from the official website of the Central Statistics Agency
through www.bps.go.id, Indonesia's export value has increased well. So that
MSME actors have a great opportunity to market their products globally.

Export Value (Million US $)

2020 2016 2014 2013 2012 2011
Indonesia 163191.8 145134.0 175980.0 182551.8 190020.3 203496.6

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 This does not preclude MSMEs Sedana Merta to expand the market
expansion to foreign markets. MSMEs Sedana Merta is one of the MSMEs in
Penarungan Village. MSME Sedana Merta sells Hindu religious ceremonial
tools including keben, dulang, sodan, and so on. The products have premium
quality but the prices offered are affordable. This is because MSMEs Sedana
Merta is the first distributor as well as producing semi-finished materials. Of
course, this is an advantage of MSMEs Sedana Merta.

In an effort to expand market share, MSMEs Sedana Merta should have an

employee who understands and is an expert in the export sector. Until now,
employees in MSMEs Sedana Merta are still focused on the production stage.
In terms of marketing and product sales are still carried out by the owner. If
MSMEs Sedana Merta wants to increase its market share to foreign markets, it
is therefore necessary for workers who understand and are able to carry out
international trade transactions. This is also supported by the existence of the
ASEAN Economic Community (AEC) which was implemented in 2015. So
that increasing employee competence is very much needed for MSMEs Sedana
Merta in facing the AEC in the global trade sector. Thus, the authors put this
idea into a case study entitled " Improving Employee Competence of
MSMEs Sedana Merta In Facing The Asean Economic Community"

1.2 Problem Formulation

Based on the above background, the authors determine the formulation of
the problem as follows:

1. How to improve employee competence in MSMEs Sedana Merta in the

export sector?
2. What are the steps in improving employee competence at MSMEs Sedana
Merta in the export sector so that they are ready to face the AEC?

1.3 Objectives
Based on the background and formulation of the problem, the objectives of
writing this case study are as follows:

2
 1. To find out how to improve employee competence at MSMEs Sedana
Merta in the export sector
2. To find out the steps in improving employee competence at MSMEs
Sedana Merta in the export sector so that ready to face the AEC

1.4 Benefits
The benefits that the authors expect through writing this case study are as
follows:

1. Theoretical
The theoretical benefits of writing this case study are as an additional
reference for MSMEs Sedana Merta and other MSMEs in improving
employee competence so that they are ready to face the AEC. In addition,
this case study is expected to add insight to the authors and readers
regarding ways to improve employee competence.

2. Practical
The practical benefits of writing this case study are as a material
consideration for MSMEs Sedana Merta and other MSMEs in improving
employee competence as well as input for MSMEs Sedana Merta and other
MSME actors.

1.5 Limitation
The authors limit the problems to be discussed. The author only focuses on the
ways and steps of increasing employee competence at MSMEs Sedana Merta
in the export sector

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 CHAPTER II

LITERATURE REVIEW

2.1 Theory Study

2.1.1 The ASEAN Economic Community (AEC)

ASEAN Economic Community (AEC) The ASEAN Economic

Community (AEC) will come into force in 2015. This AEC integrates all
countries in the Southeast Asian region in various fields, especially in the
economic field, for example in the fields of employment, investment,
products, capital, investment to services. There are several advantages for
countries that are ready to welcome this AEC, including increasing
competition in economic competition between countries, as well as more
equitable economic growth in countries in the Southeast Asian region. For
Indonesia, it is very necessary to prepare as best as possible to face this AEC.
This preparation is needed not only in protecting or protecting domestic
products but also on the world side of employment. Manpower or human
resources (HR) has become one of the issues that surfaced related to the
implementation of this AEC. These human resources are not only those who
work in government but also those who are involved in the business world,
especially those who work in the small and medium enterprises (MSMEs) and
informal sectors. AEC not only opens the flow of trade in goods or services
but also the professional labor market, such as doctors, lawyers, accountants,
and others.

The positive impact is that it will spur investment growth both from
outside and within the country so that it will open up new job opportunities.
In addition, the Indonesian population will be able to find work in other
ASEAN countries with relatively easier rules with this AEC. Thus, the
presence of the AEC is expected to reduce unemployment because it will open
up new jobs and absorb the current workforce to enter. According to the report
of the Asian Development Bank (ADB) and the International Labor
Organization (ILO), the AEC could create an additional 14 million jobs or

4
 experience a 41 percent increase in 2015 due to the freer movement of skilled
workers. Regional economic growth can also be boosted to 7 percent. As for
the negative impact of the AEC, namely the existence of a free market for
goods and services, it will cause foreign workers to easily enter and work in
Indonesia, resulting in increasingly fierce labor competition in the field of
employment. The AEC requires the abolition of regulations that previously
prevented the recruitment of foreign workers. Restrictions, especially in the
professional workforce sector, are encouraged to be abolished so that the AEC
will open up more opportunities for foreign workers to fill various positions
and professions in Indonesia that have been closed or have minimal foreign
workers. When the AEC took effect, in the employment sector there were 8
(eight) professions that had been agreed to be opened, namely engineers,
architects, nurses, survey workers, tourism workers, medical practitioners,
dentists, and accountants

2.1.2 Export

Export activity is a trading system by releasing goods from within the

country to abroad by fulfilling the applicable provisions. Exports are the total
goods and services sold by one country to another, including goods,
insurance, and services in a given year. Export activity is a trading system by
releasing goods from within the country to abroad by fulfilling the applicable
provisions. Exports are the total goods and services sold by one country to
another, including goods, insurance, and services in a given year. Export is
one sector of the economy that plays an important role through market
expansion between several countries, where it can carry out expansion in an
industry, thus encouraging other industries, further encouraging other sectors
of the economy.

The export of one of the economic sectors that plays an important role
in the expansion of the industrial sector market will encourage other industrial
sectors and the economy (Meier, 1996:313). In conclusion, exports greatly

5
 affect the rupiah exchange rate which causes the rupiah exchange rate to
weaken or strengthen. The role of the export sector, among others:

1) Expanding the market across the ocean for certain goods, as emphasized
by classical economists, an industry can grow rapidly if the industry can
sell its products across the ocean rather than only in a narrow domestic
market.
2) Exports create a new effective demand. As a result, goods in the domestic
market are looking for innovations aimed at increasing productivity.
3) Expansion of export activities facilitates development, because certain
industries grow without requiring as much investment in social capital as
would be required if these goods were to be sold domestically, for
example due to the narrowness of the domestic market due to low real
income levels or adequate transportation links.

2.1.3 Employee Competence

Competence is an ability to carry out or perform a job or task based

on skills and knowledge and supported by the work attitude required by the
job. Competence by Spencer in Moeheriono (2009:3) is a characteristic that
underlies a person related to the effectiveness of individual performance in
his work or basic characteristics of individuals who have a causal or causal
relationship with criteria that are used as references, effective or excellent or
superior performance in the workplace or in certain situations (A competency
is an underlying characteristic of an individual that is causally related to
criterian referenced effective and or superior performance in a job or
situation). The competency variable indicators according to Gordon's theory
in Sutrisno (2012) state that the employee competency indicators consist of:

1. Knowledge.

2. Understanding (Understanding).

3. Ability / Skill (Skill).

4. Value (Value).

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 5. Attitude.

6. Interest (Interest.)

2.1.4 Small Micro and Medium Enterprises (MSMEs)

According to the 1945 Constitution, it was later strengthened through

TAP MPR NO. XVI/MPR-RI/1998 concerning Economic Politics in the
context of Economic Democracy, Micro, Small and Medium Enterprises need
to empowered as an integral part of the people's economy that has a strategic
position, role and potential to realize a more balanced, developing and just
national economic structure. Furthermore, the definition of MSMEs was
made through Law No. 9 of 1999 and due to the increasingly dynamic
development situation, it was changed to Law No. 20 Article 1 of 2008
concerning Micro, Small and Medium Enterprises, the definition of MSMEs
is as follows:

1) Micro Enterprises are productive businesses owned by individual and/or

individual business entity that meets the criteria for Micro Business as
regulated in this Law.
2) Small Business is a productive economic business that stands alone,
which is carried out by individuals or business entities that are not
subsidiaries or branches of companies that are owned, controlled, or
become part of either directly or indirectly from Medium Enterprises or
Large Businesses that meet Small Business criteria as referred to in this
Law.
3) Medium Enterprises are productive economic businesses that stand
alone, which are carried out by individuals or business entities that are
not subsidiaries or branches of companies that are owned, controlled, or
become a part either directly or indirectly with Small Businesses or Large
Businesses with total assets. net or annual sales proceeds as regulated in
this Law.
4) Large Business is a productive economic business carried out by a
business entity with a net worth or annual sales income greater than that
of a Medium Enterprise, which includes state-owned or private national

7
 businesses, joint ventures, and foreign businesses conducting economic
activities in Indonesia.
5) Business World is Micro, Small, Medium, and Large Enterprises that
carry out economic activities in Indonesia and are domiciled in
Indonesia.

2.2 Previous Research

1. Yani Restiani Widjaja et al (2018) in a study entitled The Role of MSME
HR Competencies in Improving MSME Performance in Cilayung Village,
Jatinangor District, Sumedang. This research is a research that uses
qualitative methods. The purpose of this research is to describe and analyze
the importance of the role of MSME competence in improving the
performance of MSMEs in Cilayung village, Jatinangor sub-district,
Sumedang. Based on the research conducted, it can be concluded that the
role of human resource competence (HR) is a determining factor for an
organization or company, so competence is an aspect that determines the
success of MSMEs. With high competence possessed by human resources
in an organization, it will determine the quality of human resources owned
which will ultimately determine the competitive quality of MSMEs
themselves. While performance is closely related to HR competence, the
higher HR competence will improve the performance of the MSMES. The
competence of MSMES HR in Cilayung village, Jatinangor Sumedang
subdistrict, there are inhibiting factors including the education level of
MSMES HR actors who are dominant in SMA and even below SMA, so
that it This is very influential on the performance of MSMEs. Knowledge
and skills are something that must be owned by MSME actors, because they
are the key to success in HR management. By increasing the competence of
human resources, it can certainly improve the performance of MSMEs in
the Cilayung village.

2. Sulistyandari et al (2016) in a study entitled HR Competence and Its

Influence on the performance of Batik MSMEs in Banyumas Regency. This

8
research is a research that uses the explanatory method. The purpose of this
study is to examine the impact of HR competencies on company
performance. Based on the research conducted, it can be concluded that in
general, HR competence has a positive and significant effect on company
performance. This means that the higher the competence of HR will further
improve the company's performance as indicated by the higher the
company's profit. However, if further examined from the three variables
studied, the skill variable has a significant influence on the performance of
Batik MSMEs in the Banyumas Regency area. The higher the skill, the
higher the performance of MSMEs.

9
 CHAPTER III

RESULTS AND DISCUSSION

3.1 How to Improve Employee Competence at MSMEs Sedana Merta in the

Export
MSMEs Sedana Merta has the potential to carry out export activities
well, considering that there are many opportunities to penetrate international
markets and the quality of products from MSMEs Sedana Merta that can
compete and have unique characteristics. After making direct observations, the
facts obtained are that employees at MSMEs Sedana Merta are only involved
in the production process, while store management is carried out by shop
owners. Thus, if MSMEs Sedana Merta want to expand their market share to
the international market, they need employees who understand export
procedures. In addition to making the sales process more effective and
efficient, having employees who understand export procedures will help
MSMEs Sedana Merta to attract consumers from abroad.

In improving employee competence at MSMEs Sedana Merta in the

export sector, the strategy that can be used is through development and training
activities. Training is all activities to provide, obtain, improve, and develop
competence, productivity, discipline, attitude, and work ethic at a certain skill
and expertise level in accordance with the level and qualification of the position
or job. Meanwhile, development is the preparation of individuals to assume
different or higher responsibilities within an organization. The purpose of this
development and training is to improve performance and update the skills of
employees in line with technological advances.

The training methods that can be used by MSMEs Sedana Merta are
On the Job Training, E-Learning, and Simulation. The explanation is as
follows:

1. On the Job Training.

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 The on-the-job training (OJT) method is widely used in training
implementation. OJT is real on-the-job training. The basic philosophy of
OJT is that employees learn by observing their co-workers or supervisors at
work and trying to imitate their behavior. The success of this method really
depends on the owner who also acts as a trainer in directing and giving
instructions to the trainees.
2. E-Learning
This method refers to the instruction or delivery of training materials by a
computer via the internet or a company intranet. E-learning includes Web-
based training, distance learning, virtual classrooms, and the use of CD-
ROMs for learning. E-learning can include task support, simulation training,
distance learning, and learning portals. There are three characteristics of E-
learning, namely:
a) E-learning involves an electronic network that enables information and
instructions to be sent, shared, and updated in real time;
b) E-learning is sent to the training participants via computers with
internet technology;
c) E-learning focuses on learning solutions outside of conventional
learning by including information technology and performance-
enhancing tools.
3. Simulation
Simulation refers to training materials that seek to create a realistic decision
making for the trainees. Simulation allows trainees to see the impact of their
decisions on a risk-free mock environment, which is typically used to teach
production and operational skills, as well as management and interpersonal
skills. Simulation techniques allow an individual to experience interactions
between functional areas within the organization, between the organization
and its competitors, or between the organization and its environment. The
trainees make various marketing, production, HR, or financial decisions, as
input for the computer simulation, and then the program will demonstrate
the impact of these decisions on the performance of the simulated
organization. The simulator needs to have elements identical to those in the

11
 work environment. Simulators need to respond exactly as equipment does
in real-world conditions within the organization. This is why simulators are
expensive to build and require periodic updating as new information about
the work environment is acquired. Simulations are especially useful when
on-the-job training can result in serious accidents, costly mistakes, or
damage to valuable materials.

3.2 Steps in Improving Employee Competence at MSMEs Sedana Merta in the

Export Sector So that they are Ready to Face AEC
After knowing the ways that can be taken to improve employee
competencies at MSMEs Sedana Merta, then the next step is to know the steps
or processes that can be applied by MSMEs Sedana Merta. Immediately
improve employee competence in the export sector. The steps that can be taken
will be detailed as follows:

1. Determining Employees and Program Patterns

In this stage, the owner of MSMEs Sedana Merta determines which
employees will be assigned the task of exporting. The provision of material
can be done by inviting instructors or experts in the export sector. These
instructors can come from export practitioners, exporters or in
collaboration with universities as MSME partners. Furthermore, it will be
determined what materials will be provided starting from procedures,
documents, and others.
2. Development and Training Process
In this stage, the development and training process is carried out by
providing material using the E-Learning method. This method is used so
that the process of delivering material can be carried out effectively and
efficiently in the midst of a pandemic situation. This E-Learning method
can be applied by providing materials or modules and learning videos
related to exports. This material can be shared with existing
communication platforms such as WhatsApp.
The next process is to provide a simulation method that is carried out
regularly so that employees know more about the implementation of
exports for MSMEs. This simulation activity is also a step to directly

12
 introduce the export process that will be carried out so that employees have
an idea of the export process that will be carried out later. Next is the On-
the-Job Training process carried out by employees. In this process,
employees are ready to carry out export procedures according to the
materials and simulations that have been provided.
3. Program Evaluation
After the export activities of MSMEs Sedana Merta have been
running for several months, program evaluation activities are very
important to be carried out. The assessments carried out include measuring
reactions, measuring learning, evaluating behavior and results. Reaction
measuring typically focus on how participants feel about the training
subjects and trainers, suggestions for improvement in the program, and the
level of assistance the training provides to their work. At MSMEs Sedana
Merta, reaction measurements were carried out using a questionnaire to
obtain feedback from employees after attending training and development.
Learning measures assess the extent to which participants master the
concepts, information, and skills imparted during the training process. At
MSMEs Sedana Merta, to measure the mastery of the material by
employees, it is done by observing the development of the employee's
performance.
Behavioral evaluation of the training program is measured through
changes in the behavior of the participants in carrying out their work.
Assessment of behavioral changes on the job as a result of training. At
MSMEs Sedana Merta, behavior evaluation is carried out by evaluating in
the form of questions in the form of questionnaires given before and after
the training.
Evaluation of results can be done through performance evaluation
for each work unit after its employees have participated in training and
development programs. This evaluation can be seen from cost savings,
increased production, increased sales, decreased work accidents, improved
employee morale, decreased employee turnover, and decreased employee
absenteeism. In the MSMEs Sedana Merta, the evaluation of the results is

13
carried out by looking at the development of product sales in exports and
based on the interest of importers from other countries towards the
MSMEs Sedana Merta‘s products.

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 CHAPTER IV
CONCLUSION

4.1 Conclusion
MSMEs Sedana Merta have the potential to carry out export activities,
considering that there are many opportunities to penetrate the international
market and the product quality of MSMEs Sedana Merta that can compete and
have unique characteristics. To support this potential, an effort is needed to
increase employee competence in the export sector so that products from
MSMEs Sedana Merta can enter the international market. The ways that can
be taken to improve employee competence in the export sector are by
conducting training and development which then uses On the Job Training, E-
Learning and Simulation methods. After knowing the ways that can be done to
improve employee competence, then the next are the steps or processes that
can be applied by MSMEs Sedana Merta in increasing employee competence
in the export sector. These steps include determining employees and program
patterns, developing and training processes, and evaluating programs. With this
effort to improve employee competence, MSMEs Sedana Merta will have
greater opportunities in global trade and human resources at MSMEs Sedana
Merta can compete in the middle of the AEC.

4.2 Suggestions
The suggestions that the author can convey are the need to increase
employee competence in the export sector for MSMEs in Indonesia because
Indonesian MSMEs have great opportunities to compete in the international
market. This aims to improve the economy of the community and the state and
maximize the potential of Indonesian MSMEs.

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