The Influence of Organizational Culture and Internal Control on Corporate Performance Mediated by Corporate Governance in PT Medco E&P Malaka

Abstract

This study examines the influence of an organization’s culture, internal control, and corporate governance on corporate performance in a national private company. To collect data used a survey technique with a saturated sample of all the employees on PT Medco E&P Malaka (Medco) located in East Aceh Region, Indonesia, with 161 respondents. The data were analyzed using Structural Equation Modelling (SEM). The result shows that in Medco, Significantly, culture affects corporate governance, Internal control affects governance, culture affects corporate performance, Internal control affects corporate performance, governance affects corporate performance, culture affects corporate performance thru governance, and Internal control affects corporate performance thru governance. The findings also prove from the results of direct effect and indirect effect tests, the corporate governance variable in the model functions as a partial mediator. These findings explain that the corporate performance improvement model at Medco is a function of cultural adjustment, and strengthening of internal controls within the company, which can have an impact on strengthening corporate governance.