THE ENHANCEMENT OF RISK BASED BUDGETING AND SELLING EXPENSE MAPPING: STUDY CASE AT PT PUPUK INDONESIA (PERSERO) (PT PI) FINAL PROJECT In partial fulfillment of the requirements for the master’s degree from Institut Teknologi Bandung By: Cita Yulia Mayasari 29121076 School of Business Management Institute Technology Bandung 2023 i ABSTRACT THE ENHANCEMENT OF RISK BASED BUDGETING AND SELLING EXPENSE MAPPING: STUDY CASE AT PT PUPUK INDONESIA (PERSERO) (PT PI) By Cita Yulia Mayasari Student ID: 291210076 (Master of Business Administration Program) Organizational responsiveness is required to anticipate any changes by adapting to the business environment in the midst of a situation that is increasingly full of uncertainties, both caused by external conditions such as the global economic crisis and the covid 19 pandemic and internal conditions such as declining financial performance and HR productivity. Changes have the potential to create opportunities and risks for the organization, so risk management is essential. This study investigates the effects of corporate risk, enterprise risk management, budgeting, and growth on company performance. Data is gathered by recording all pertinent information in the company's annual report. The information used is from PT Pupuk Indonesia (Persero)'s performance report for the period of 2017 to 2022. This study's goal is to develop a new framework that businesses can use to create budgeting plans that are based on risk. Monte Carlo simulation was used for the data analysis in this study. The findings indicate that corporate risk has a big impact on business performance. Using monte carlo simulation to represent the reality as just a little bit higher. Keywords: Corporate Risk, Budgeting Plan, Enterprise Risk Management, Quantitative analysis and Company Performance ii ABSTRAK PENINGKATAN PENGANGGARAN BERBASIS RISIKO DAN PEMETAAN BIAYA PENJUALAN: STUDI KASUS DI PT PUPUK INDONESIA (PERSERO) (PT PI) Oleh Cita Yulia Mayasari Student ID: 291210076 (Program Studi Magister Administrasi Bisnis) Ketanggapan organisasi dituntut untuk mengantisipasi setiap perubahan dengan beradaptasi terhadap lingkungan bisnis di tengah situasi yang semakin penuh dengan ketidakpastian, baik yang disebabkan oleh kondisi eksternal seperti krisis ekonomi global dan pandemi covid 19 maupun kondisi internal seperti menurunnya kinerja keuangan dan produktivitas SDM. Perubahan berpotensi menciptakan peluang dan risiko bagi organisasi, sehingga manajemen risiko menjadi sangat penting. Penelitian ini menginvestigasi pengaruh risiko perusahaan, manajemen risiko perusahaan, penganggaran, dan pertumbuhan terhadap kinerja perusahaan. Data dikumpulkan dengan mencatat semua informasi yang berkaitan dalam laporan tahunan perusahaan. Informasi yang digunakan berasal dari laporan tahunan PT Pupuk Indonesia (Persero) untuk periode 2016 hingga 2021. Tujuan dari penelitian ini adalah untuk mengembangkan kerangka kerja baru yang dapat digunakan oleh perusahaan untuk membuat rencana penganggaran yang berbasis risiko. Simulasi Monte Carlo digunakan untuk analisis data dalam penelitian ini. Temuan menunjukkan bahwa risiko perusahaan memiliki dampak yang besar terhadap kinerja bisnis. Menggunakan simulasi monte carlo untuk merepresentasikan realitas yang sedikit lebih tinggi. Keywords: Risiko Perusahaan, Perencanaan Anggaran, Manajemen Risiko Perusahaan, dan Kinerja Perusahaan iii THE ENHANCEMENT OF RISK BASED BUDGETING AND SELLING EXPENSE MAPPING: STUDY CASE AT PT PUPUK INDONESIA (PERSERO) (PT PI) By Cita Yulia Mayasari Student ID: 29121076 Master of Business Administration Program Institut Teknologi Bandung Approved 07 August 2023 Supervisor Taufik Faturohman, ST., MBA., PhD iv DECLARATION OF NON -PLAGIARISM Plagiarism is: Taking, using, and submitting a work of another, including an idea, writing, or invention, as if it was her or his own. Plagiarism includes (but not limited to): 1. quoting verbatim the work of another without acknowledgement of the source; 2. paraphrasing the work of another without acknowledgement of the source; 3. using the idea of another without acknowledgement of the source; 4. submitting the work of another without identifying clearly who did the work; 5. colluding by submitting the work of another as her or his own with consent from the other. I understand that Plagiarism is wrong, a breach of academic integrity, and against Program, School, and University’s Policy and Regulation. I declare that all material in this Final Project is original, my own work, and does not involve plagiarism. I have not allowed, and will not allow, another to copy my work with the intention of submitting it as her or his own work. Student ID 29121076 Cita Yulia Mayasari 13 July 2023 v ACKNOWLEDGEMENTS First and foremost, I thank to Allah SWT for all the chances and fortitude I've had to finish writing the thesis. Throughout this process, I learned a great deal about myself both academically and personally. My sincere gratitude to Prophet Muhammad whose life path has been a continuous guide for me. My sincere gratitude to my supervisor, Taufik Faturohman, ST., MBA., PhD for all advice, understanding, and most significantly, for giving me the inspiration and warm spirit I needed to finish this thesis It has been a great pleasure and honor to have him as my supervisor. My deepest gratitude goes to my beloved parents, to my husband, my son and my brothers and sister for their never ending support, prayers, and love. And the last, I'd want to thank for PT Pupuk Indonesia (Persero), BLEMBA’65 and the entire civitas of Magister Business Administration Bandung Institute of Technology. Thank you very much. Jakarta, July 26 th, 2023 Cita Yulia Mayasari vi Table of Contents Contents ABSTRACT ............................................................................................................................................... i ABSTRAK ................................................................................................................................................ ii ACKNOWLEDGEMENTS ...................................................................................................................... v List of Figure ........................................................................................................................................ viii List Of Table ........................................................................................................................................... ix List Of Appendices .................................................................................................................................. x Introduction ................................................................................................................................................. 1 I.1 Background ........................................................................................................................................ 1 I.2 Company Profile ................................................................................................................................ 3 I.3 Business Issue ................................................................................................................................... 11 I.4 Research Objectives and Research Questions .............................................................................. 12 I.5 Research Limitation ........................................................................................................................ 12 I.6 Methodology Research .................................................................................................................... 12 Literature review ...................................................................................................................................... 13 II.1 Literature Review ..........................................................................................................................