Institutional Capacity of Village-Owned Enterprises in Kutai Kartanegara: Internal Governance and Stakeholder Relations

Abstract

Village-owned enterprises (VOEs) play an important role in managing village economic potential, yet their formal existence, organizational structure, capital contributions, and business units do not always reflect substantive institutional capacity. This study analyzes the institutional capacity of VOEs in Kutai Kartanegara Regency by examining the relationship between internal governance and relations with village governments, communities, and external partners. The study employed a qualitative approach with a case study design covering nine VOEs in nine villages. Primary data were obtained through in-depth interviews, field observations, social mapping, institutional Venn diagrams, and field documentation, complemented by secondary documents. Data analysis included organizing, coding, categorizing, cross-source and cross-unit comparisons, and interpretation. The findings show that relations with village governments were dominated by administrative aspects, external support and human resource capacity building were limited, community participation remained limited, internal governance was weak, and relations with external partners were also limited. This configuration explains VOEs’ weak position within village socioeconomic structures and the uneven distribution of economic benefits. Substantive institutional capacity therefore depends on the relationship between internal organizational functioning and the quality of stakeholder relations.