CASE STUDY OF P.T. THIRTIEZ PILAR INDONESIA

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ANALYSIS FACTOR COST OVERRUN IN TERMS OF BUDGET ALLOCATION IN MANAGEMENT PROJECT: CASE STUDY OF

P.T. THIRTIEZ PILAR INDONESIA

By

Kaesar Agusta Ramadhan 13112086

BACHELOR’S DEGREE in

BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION & HUMANITIES

SWISS GERMAN UNIVERSITY EduTown BSD City

Tangerang 15339 Indonesia

August 2016

Revision after thesis defence july 2016

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Kaesar Agusta Ramadhan STATEMENT BY THE AUTHOR

I hereby declare that this submission is my own work and to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at any educational institution, except where due acknowledgement is made in the thesis.

Kaesar Agusta Ramadhan

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Student Date

Approved by:

Junaidi Sinaga, MBA

____________________________________________

Thesis Advisor Date

Dr. Rer. net. Linus Pasasa

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Thesis Co-Advisor Date

Eric Jos Nasution, MBA, MA, Ph.D

____________________________________________

Dean Date

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Kaesar Agusta Ramadhan ABSTRACT

ANALYSIS FACTOR COST IN TERMS OF BUDGET

ALLOCATION IN MANAGEMENT PROJECT: CASE STUDY OF P.T.

THIRTIEZ PILAR INDONESIA

By

Kaesar Agusta Ramadhan Junaidi Sinaga MBA, Advisor Dr. Rer. net. Linus Pasasa, Co-Advisor

SWISS GERMAN UNIVERSITY

The purpose of this study is to analyze what factor that causes of cost overrun in every project for Thirtiez group. This research is using quantitative and using both primary and secondary data, the data collected by interview with director of some group from Thirtiez and get the data needed from company. The data which collected modified onto questionnaires which spread about 50 respondents by using PHStat within the Thirtiez group employees and director. Then the data analyzed by SPSS To test the validity and reliability also the data need to be pre-test first to test the validity of respondent answer and after can spread others questionnaires to post-test. Then through AMOS to simplify the numerical calculation, to see correlation between variables. The result shows that resource play the important role affecting cost overrun. By analyzing which of variables that influence the most cost overrun so that in the near future it can be maintained and improved, and the variable which has last impact will become the recommendation for PT. Thirtiez Pilar Indonesia.

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Kaesar Agusta Ramadhan Shortage

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Kaesar Agusta Ramadhan DEDICATION

I dedicate this works for my lovely mother, Mr. Junaidi Sinaga and the future of P.T.

Thirtiez Pilar Indonesia and friends

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Kaesar Agusta Ramadhan ACKNOWLEDGEMENTS

First of all, I would like to express my gratitude to Allah SWT for the blessing in my life and giving me encourage to finish my thesis. I dedicate this research to my precious mother who always support me whenever life get though, giving the best advice, best attention and love every time I needed.

I would like to express my appreciation to my honorific advisor, Mr. Junaidi Sinaga,MBA and Co-Advisor Dr.rer.nat. Linus Pasasa for spending their time to me during my thesis work and gives the best advice and best knowledge they can deliver to fulfill my desire and to overcome every difficulty I encountered. Thanks to Miss Jane E. Sweed and Mr. Michael Roberts for their assistance with the grammar correction.

I would like to thank to all Thirtiez group family who help me to get the information for this thesis especially Mrs. Yurike Lanser (Group CEO), and my friends in Thirtiez Last but not least I would like deliver my appreciation to all close friends, thanks to my lovely mother, my best friends Hamzah and Reyhan and all friends in group chat of warriors and gossip cepet.

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Kaesar Agusta Ramadhan TABLE OF CONTENTS

Page

STATEMENT BY THE AUTHOR ... 2

ABSTRACT ... 3

DEDICATION ... 6

ACKNOWLEDGEMENTS ... 7

TABLE OF CONTENTS ... 8

LIST OF TABLES ... 11

LIST OF FIGURES ... 12

CHAPTER 1 ... 13

1.1. Introduction ... 13

1.2. Overviw of Thirtiez ... 15

1.3. Research Problems ... 17

1.4. Research Question ... 17

1.5. Research Purpose ... 17

1.6. Significance of study ... 17

1.7. Scope and Limitation ... 18

1.8. Research Objectives ... 18

CHAPTER 2 - LITERATURE REVIEW ... 19

2.1 Framework Thinking ... 19

2.2 Element of Project Management ... 20

2.2.1 Types of Project Planning ... 20

2.2.2 Project Return ... 23

2.2.3 The Project Team ... 23

2.2.4 The Project Manager ... 23

2.2.5 The Scope Statement ... 24

2.2.6 Work Breakdown Structure (WBS) ... 24

2.2.7 Responsibility Assignment Matrix ... 24

2.2.8 Project Risk ... 25

2.3 Project Scheduling ... 25

2.3.1 Causing delays ... 27

2.4 Project Control ... 28

2.4.1 Cost Management ... 28

2.4.2 FactorAffecting Cost-Overruns ... 30

2.4.3 Communication ... 31

2.4.4 Coordination ... 31

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2.4.5 Personal Technical Shortage ... 32

2.5 Previous Studies ... 32

2.6. Hypothesis ... 35

Hypothesis 1 : Delays is the factor that occurring cost overrun in project. ... 35

CHAPTER 3 – RESEARCH METHODS ... 36

3.1 Research Process ... 36

3.2 Type of Studies ... 37

3.3 Type of Data ... 38

3.3.1 Primary Data ... 38

3.3.2 Secondary Data ... 38

3.4 Data Collection ... 38

3.5 Sample and Population ... 39

3.5.1 Sample Size ... 40

3.5.2 Sample Determination ... 40

3.6 Research Model ... 42

3.7 Operationalization and Sampling Method ... 43

3.8 Validity and Reliability ... 44

3.8.1 Validity ... 45

3.8.2 Reliability ... 45

3.8.3 Pre-Test ... 46

3.8.4 Post-Test ... 46

3.8.5 Structural Equational Modelling (SEM) ... 46

3.8.6 Path Diagram ... 47

CHAPTER 4 ... 48

4.1 Data Source ... 48

4.2 Company Profile ... 48

4.3 Demographic ... 50

4.4. Reliability and Validity Test Results for Questionnaire Pre-test ... 52

4.4.1. Financial Delay factor ... 53

4.4.3 Labor Related Delay ... 55

4.4.4 Technical Personal Shortage ... 56

4.4.5 Poor Communication ... 57

4.4.6 Poor Coordination ... 58

4.4.7 Cost Overrun ... 59

4.5 Structural Equation Modelling (SEM) Analysis ... 60

4.5.1 Path Diagram ... 60

4.5.2 Measurement Model Analysis ... 60

4.5.3 Path Diagram Output ... 61

4.6. Hypothesis Analysis ... 63

CHAPTER 5 ... 66

5.1 Conclusion ... 66

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5.2.2 Further Research ... 70

GLOSSARY ... 71

REFERENCES ... 73

APPENDIX 1 ... 75

APPENDIX 2 QUESTIONNAIRES RESULT ... 77

APPENDIX 2 QUESTIONNAIRES RESULT ... 79

APPENDIX 3 ... 80

APPENDIX 4 ... 84

APPENDIX 5 ... 87

APPENDIX 5 ... 89

CURRICULUM VITAE ... 92