EFFECTIVENESS OF MANAGEMENT CONTROL SYSTEMS IN A MERGER CONTEXT: A CRITICAL ANALYSIS OF PT XLSMART TELECOM SEJAHTERA Tbk PERFORMANCE IN 2025

This study analyzes the effectiveness of the Management Control System (MCS) of PT XLSmart Telecom Sejahtera Tbk (XLSMART) in 2025, a year marked by the historic merger of PT XL Axiata Tbk with PT Smartfren Telecom Tbk and PT Smart Telecom, effective 16 April 2025. Using a qualitative-descriptive case study approach based on public document analysis, this study evaluates MCS through a three-dimensional framework results controls, action controls, and cultural controls. The analysis finds that XLSMART's MCS is effective at the process level but produced negative financial outcomes of a transitional nature. Two genuine control weaknesses were identified: a 29% YoY surge in finance costs to IDR 4.02 trillion reflecting post-merger leverage risk not yet counterbalanced by adequate debt covenant mechanisms and the absence of third-party assurance on the sustainability report. This study concludes that evaluating MCS effectiveness in entities undergoing strategic transformation requires a multidimensional approach that goes beyond net profit analysis alone. Keywords: Management Control System, Merger, Financial Performance, Corporate Governance, XLSMART, Indonesian Telecommunications