Organizational Change and Leadership Processes “The Paradigm Change of PERUM PEGADAIAN Culture from Feudal into Professional”


Change management is the effort done to manage the consequences caused by changes in the organization. Changes can occur due to causes originating from both inside and outside the organization. Theories related to this case focuses on the issue of leadership, where the leader of an organization (in this case the executive and initiator of change) to act as agents of change. Leadership is a relationship of mutual influence between leaders and followers (subordinates) who want real change that reflects the shared goal (Joseph C. Rost.,1993).

Leader is one of the agents of change that has an important role in determining the success of a company. Leadership is an organization locomotive that is always interesting to talk about. This attraction is based on the historical background that shows the importance meaning of a leader’s existence in each of the group’s activities and the fact that leadership is a Centrum in the interaction pattern between the components of the organization (Suarjaya dan Akib, Usahawan bulan Nopember 2003:42). Moreover, the leadership and the role of the leader determine the birth, growth and maturity as well as the death of the organization. Considering the importance meaning and role of the leadership then this article is directed not only to refresh the reader’s understanding of the leadership topic, but also by using the principle of advertising to tell that do not know, remind the forgotten, and influence the attitudes and behavior of people who already know of the leadership.

As a Bureau corporation, Pegadaian is headed by a Chief of Bureau, with employees who are pure status of Civil Servants (PNS). Its main mission is only one, namely the social mission for public service (public service obligation). Primarily they serve the lower community to the need for their funds on the basis of the pledge law. The Government expects the company is independent, but if they loss would be supported out by the government.

Remuneration system and prevailing employment in Perjan Pegadaian are also not challenged. Exactly as well as civilian civil service in general, who is diligent and lazy will receive the same salary corresponding their class. Every two years, salary would go up periodically. Every four years, they will get a promotion. To get a higher position, competence and capability is not a priority as long as they can be a bit of politics in the office. Since serving the small community, the image of Perjan is very closely with poverty. This image makes Pegadaian employees feel not proud and embarrassed to their corps.

Because it is a legacy of the Dutch government, Perjan Pegadaian has a strong feudal culture. The employee is respected aristocrat, and looked as people who need them. It is not surprising when it is uncommon to hear a friendly greeting from the clerk. Instead, we often listen to the cries of the counter calling customers who would pawn the goods. As the aristocrat, they were very respectful to their superiors. They serve the boss very well. The boss also felt that subordinates should serve them.

System in Perjan is very bureaucratic and rigid, so deadly seeds, seeds of creativity. Bound system and aristocrat culture in Perjan Pegadaian is aggravated by conditions of its human resources. In the 1980s, 60% of Pegadaian employees were elementary and secondary education. In fact, some of them can only read and write. Those who had high school education amount of 35% and the rest of educated young scholars and scholars around 5%. Even then, the average was already old.

According to Miller (2012), ideal processes for changing organizational activity could be devised by thinking management. In such an organization, they simply tell the workers what changes should be made. Effective leaders know where they are and know where they want to go. The framing process can be started by effective leaders through having a clear understanding of their own view of reality and their own goals for the organization and for communication (Fairhurst and Sarr, 1996). Miller (2012) added that when there were constraints that would hamper the framing process, the effective leaders could pay attention to the context, recognizing times and situations in which there were opportunities for shaping meaning.

Pegadaian now has to clean up and make changes, related to changes in the culture of the feudal culture into a professional culture. The changes made by Pegadaian could not be separated from the role of a leader who has sought changes. This paper seeks to discuss cultural change contained in Pegadaian; from the lens of organizational change management and leadership or leadership that acts as an agent of its change.


Pegadaian is a BUMN in Indonesia which the core business in credit distribution service sector to the public on the basis of the pledge law.

Changes in Status

In this period Pegadaian has several times changed its status, namely as Perusahaan Negara (PN) since January 1, 1961 and then based on PP No. 7/1969 into Perusahaan Jawatan (PERJAN) furthermore based PP No. 10/1990 (which was renewed by PP No. 103/2000) was changed again into Perusahaan Umum (PERUM) until now.

Now the age of Pegadaian has over one hundred years, the benefit is felt by the public, even though the company carries on a mission of public service obligation, in fact the company is still able to make a significant contribution in the form of taxes and for profit to the Government, when the majority of other financial institutions are in an unfavorable situation.

Evolution Stages of Pegadaian

  • Period of 1945 – 1949

Filled with state instability because Indonesian Republic was still a baby still should maintain the independence, and then Pegadaian was forced to evacuate and leave the office in ruins. The Chair of Jawatan Pegadaian at the time was R. Hendrasin Tjokro Soedirjo. Displacement was done by moving the office in Kebumen, Magelang, dan Yogyakarta. As a result, the influence of Javanese culture was very strong at all, the employees’ work clothes at the time such as cloth of jarik, beskap, and blangkon. The organizational structure of the post-war had no change.

  • Period of 1960s

The period of the 1960s, Jawatan Pegadaian changed its status to Perusahaan Negara (PN) Pegadaian, precisely in year 1961. BUMN at that time nothing was going well, including Pegadaian. Management was very bureaucratic, feudal smelling, and lack of working capital. Entered drink, capital thinning, the salary paid in installments, Javanese culture robust maintained, relationships between superiors and subordinates deliberately limited because employers wanted to invest authority to keep a distance, if there was an error could be transferred to the branch disposal, therefore they did not need to be smart, if they were smarter later they could oppose.

  • The New Order
    • At the beginning of the construction of the New Order, Pegadaian turned into Perusahaan Jawatan (Perjan) in 1969 marked by new capital injections by the government and the replacement of some officials. Customer data was still difficult to be identified, then the leadership of Sidi Pramono (1968 – 1974) as Perjan’s Chief published customers’ book in order to facilitate the administration of the customer.
    • At the time of Drs. Hardjojo (1974 – 1980), Jawatan began recruiting 13 Bachelor of Economics and Law or at the same level of scholar young, which had not been owned by Pegadaian, to be educated as Head of Kantor Daerah Pemeriksaan (KDP). Began to progress, as were paid properly.
    • At the time of Soejono Wirdjosoedirjo, SH (1980 – 1982) devoted many aspects of infrastructure, improvement of the building, as well as manual work for the branch. At that time the manual by the Dutch had not been revised.
    • At the time of Muljosedono (1982 – 1989) modernized of buildings and the expansion of KDP. KDP is a continuation of Kontrolir position at the Dutch era that was feared and respected. This position was highly coveted because as the Inspector or Examiner, they who were not KDP could not hope to a higher position of the Section Head, no matter how brilliant brains and accomplishments. Initiative and innovation were still low; employee was embarrassed when working where they would answer as employees of the Finance Directorate.
    • Sjamsir Kadir (1989 – 2001) period proposed status changes Perjan to Perum, because the old status was not freely taking credit policy, personnel, payroll, investment, and others. As Perjan, the status of employees was civil servants, even though the salary and welfare were not paid from the state budget. Recruitment, positions, career, and retirement were still very stiff in Employment Law.

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