Challenges in Implementing Internal Control Systems in the Shipping Industry (A Case Study at PT PM)

ABSTRACT : Internal control plays an important role in ensuring operational efficiency, mitigating risks, and supporting business sustainability. However, in practice, various challenges often hinder its effective implementation. This study was conducted in the shipping industry at PT PM with the aim of understanding the condition of internal control and the challenges faced in its implementation. The research employed a qualitative approach using a case study method. The findings reveal that internal control at PT PM has not been implemented optimally. The control environment is still influenced by the dominance of top management, a permissive culture, and subjective performance evaluations. Risk assessment remains inadequate, as the company continues to rely heavily on the coal sector with limited efforts in diversification. Control activities are not yet effective, as indicated by the prevalence of unofficial expenses that exceed official costs. In terms of communication, the flow of information is uneven due to the formation of exclusive groups closely connected to management. Meanwhile, the monitoring function is inconsistent, marked by high employee turnover and weak supervisory mechanisms. The discussion shows that weaknesses across these aspects are interrelated and form systematic barriers. This condition not only leads to inefficiencies and reduces operational effectiveness, but also hinders the realization of business diversification strategies needed to reduce the company’s dependence on the coal sector. This research is expected to provide practical insights for management in strengthening internal control systems, as well as academic contributions to enrich the understanding of internal control implementation challenges in resource based companies.

KEYWORDS : Internal Control, Implementation Challenges, Organizational Culture, Business Diversification, Shipping Industry