LEADERSHIP COMMUNICATION IN LOCAL ECONOMY DEVELOPMENT

Abstract

Indonesian has experimented in recent years with a unique and novel form of local
development, the Village-Owned Enterprise (VOE), which involves the village government
and the community in managing the institution based on the village’s needs and economy. A
case-study of a VOE in Cangkudu Village on the Indonesian island of Java shows that
leadership communication is one of the success key determinants of such a local economic
institution, along with economic resources, human resources, and the capacity of local
government. Cangkudu Village is considered to be the first village in Indonesia which has
suceeded in developing the local economy and good governance through its VOE. This success,
however, is shortlived and was evident from 2014 to 2016 only. In 2017, the VOE stagnated
and was not sustained by the village officials. Through observation, interviews and
documentation using an organizational communication perspective, this research found that the
autocratic communications leadership style is implemented by the Village Chief to run a
business unit in the village. The unsustainability of the VOE resulted from several factors
associated with social cohesion; social trust; information disclosure among actors, the existence
of powerful people and affect the dynamics of local political economy; the competence to run
business unit; and the capability of VOA management