One of definitions of institution is rules and guidelines as a guide used by members of a community group to set up a relation that is mutually binding or mutually dependent on one another. Structuring institutional arrangements can be determined by several elements: the operational rules for regulating the use of resources, collective rules to define, enforce the law or the rules themselves and to change the operating rules and regulate organizational authority relations (Ostrom, 1985; 1986). The structuring of institutional arrangement is an arrangement of relationship among economic units that regulate how these units can cooperate or compete. Generally, the definition of institutions includes the concept of social behavior patterns that are entrenched, and ongoing or recurring.

The government has conducted national bureaucratic reform program since 2010. Now, the national Bureaucratic reform process has entered the second stage, which is marked by the drafting of the Road Map Bureaucratic Reform 2015-2019 through Administrative and Bureaucratic Reform Ministry (KeMenPANRB) No. 11 of 2015. In the Road Map, 3 (three) goals and 8 (eight) changes areas of Bureaucratic reform from 2015 to 2019 have been determined.

The three targets of Bureaucratic Reforms are: 1. clean and accountable Bureaucratic; 2. Effective and efficient bureaucracy; and 3. Bureaucratic that provides quality public services. The three targets are also set as the 2019 targets for each indicator.

To achieve the three goals of bureaucratic reform as mentioned above, the change in bureaucratic reforms has been determined. Changes in certain areas within the scope of the bureaucratic are expected to create conditions conducive to support the achievement of three goals of bureaucratic reform.

In order to create a bureaucracy with good mentality to serve and with high achievement orientation, the quality of NADFC public services will be raised. In line with the mainstreaming of good governance as contained in National Medium-term Development Plan (RPJMN) 2015-2019, NADFC has strived to continuously implement Bureaucratic Reforms in eight (8) areas of change.

The quality of governance is a prerequisite to achieve strategic goals and objectives of NADFC (1 and 2). The implementation of consistently good governance is characterized by the development aspects of openness, accountability, effectiveness, efficiency, rule of law, justice, and community participation.

The Roles of Resources include 5Ms (man, material, money, methods, and machine) which are the driving force of an organization. The limited availability of resources both in number and quality, has caused NADFC to manage these resources optimally and accountably in order to support the realization of program objectives and activities that have been set. Ultimately, effective and efficient management of resources is very important to be noticed by all elements of the organization.

To carry out its task, NADFC needs strengthening. The structuring and strengthening of the organization aims to improve the efficiency and effectiveness of the organization in proportion with its functions and sizes according to the needs of the tasks and functions of NADFC. Governance Structuring aims to improve the efficiency and effectiveness of the system and work procedures.

As we know, medicine and food are important elements in achieving optimal health status. Taking into account, optimal health status, NADFC has set a vision "Ensuring medicine and food safety, improving public health and competitiveness of the nation" and the mission:

  • Improving risk-based Drug and Food Control system to protect the public
  • Encouraging businesses to be independent in providing security assurance of Drug and Food, and strengthening partnerships with stakeholders
  • Enhancing the capacity of NADFC

In accordance with NADFC vision and mission, drug and food control is a strategic area because in addition to impact on consumer protection, it is also an important element in improving the competitiveness of product quality through the independence of the businesses.

Recognizing the role and the importance of food and drug control as a strategic element that should become the priority of the development agenda, it is only natural that the effectiveness of the Government in the implementation of this program must be ensured that it has good leverage and is cost effective. Therefore, Indonesia needs to have a Drug and Food Control Agency to protect the public while enhancing competitiveness and developing the economy. Thus, inevitably, NADFC must continue to evolve to be able to adequately respond to developments of both global threats and opportunities.

It is widely recognized that the tasks faced by NADFC will be more extensive and complex. Public expectations to NADFC to obtain effective protection will continue to increase, while the organization (institutional, system, structure, behavior/work culture) is still limited. NADFC is still very limited compared to its scope and coverage which are constantly evolving. The limitations of this organization has encouraged NADFC to continue to improve its efficiency and effectiveness in the administration of all programs.

On the institutional side, government institutions are deemed not to operate effectively and efficiently. The structures are too broad/fat with a lot of hierarchy causing complicated process, slow services and decision-making, and ultimately creating a culture of feudal apparatus. Therefore, changes in the institutional system will promote efficiency, effectiveness, and accelerate the process of services and decision-making within the Bureaucratic. Changes in the institutional system is expected to encourage the creation of a culture/behavior that is more conducive to realizing effective and efficient Bureaucratic. In connection with this, the efforts to change the mindset of human resources and governance of work in NADFC will continue to take place.

To realize those goals, based on the decision of the Chairman of NADFC No. HK. of 2015 on the formulation of the Vision and Mission of NADFC of 2015-2019, namely "Improving NADFC institutional capacity", there have been some restructuring efforts and institutional strengthening. Institutional restructuring aims to achieve appropriate organizational structure that has appropriate functions and the right size as needed to achieve the organization's vision and mission by considering the position of NADFC referred to in the national development system. As a concrete step and seriousness of NADFC in conducting institutional restructuring, it has conducted a study in the form of academic paper and presented it to the Administrative and Bureaucratic Reform Ministry (KemenPAN RB) in December, 2015.