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ISSN : 1598-7248 (Print)
ISSN : 2234-6473 (Online)
Industrial Engineering & Management Systems Vol.18 No.3 pp.541-550
DOI : https://doi.org/10.7232/iems.2019.18.3.541

Corporate Entrepreneurship and Business Performance of Logistic Companies in Indonesia

Krisada Chienwattanasook, Samanan Wattanapongphasuk, Andi Luhur Prianto, Kittisak Jermsittiparsert*
Faculty of Business Administration, Rajamangala University of Technology Thanyaburi, Pathum Thani, Thailand
Political Science Association of Kasetsart University, Bangkok, Thailand
Faculty of Social and Political Science, Muhammadiyah University of Makassar, South Sulawesi, Indonesia
Social Research Institute, Chulalongkorn University, Bangkok, Thailand
Corresponding Author, E-mail: kittisak.j@chula.ac.th
June 3, 2019 June 16, 2019 June 18, 2019

ABSTRACT


Indonesian logistic industry is growing rapidly and contributing to the gross-domestic product (GDP). However, Indonesian logistic companies are facing various challenges. Corporate entrepreneurship is one of the crucial challenges facing by logistic companies. This problem is a constraint in the growth of these companies. Therefore, objective of this study is to address the relationship of corporate entrepreneurship and business performance among Indonesian logistic companies. Quantitative approach is used to accomplish this objective. A questionnaires survey was selected to collect the data from logistic employees. Results of the study found that corporate entrepreneurship has major role in logistic business performance. Time availability, management support and organization boundaries have important role to enhance logistic business performance. Additionally, work discretion increases the positive effect of corporate entrepreneurship and business performance. Therefore, logistic companies should focus on corporate entrepreneurship to resolve various issues related to entrepreneurship.



초록


    1. INTRODUCTION

    Entrepreneurship is based on those individuals who initiate new ventures, now it is prolonged to firm level (Kazanjian et al., 2017). In the current environment, corporate entrepreneurship is most important elements of every business (Vanacker et al., 2017;Safdari et al., 2013;El-Kafafi, 2019;Barrett and Weinstein, 2015;Feizuldayeva et al., 2018;Bicer et al., 2018). Intention towards corporate entrepreneurship is most crucial in the competitive environment. Intention towards corporate entrepreneurship generate valuable ideas to promote business performance. It plays an important role in business performance (Leung and Chan, 2016;Mwaniki and Ondiek, 2018).

    To achieve worldwide growth, development for the business and its survival are being forced by the monetary as well as environmental changes to support their entrepreneurial environments. Further recommended by Bolton (2012) There is a need to investigate and recog-nize the components that could possibly contribute in the improvement and development of entrepreneurial activities. Supporting this idea, Chielotam (2015) have mentioned that business leaders are failed to distinguish the components that can encourage business performance. Therefore, a professional business behaviour is need for business development (Reza, 2013;Al-Khalifah, 2018).

    However, companies are facing the issues related to entrepreneurship, particularly Indonesian logistic companies. Indonesian logistics industry is growing rapidly (Banomyong et al., 2008) as it is shown in Figure 1. Logistic growth is shown from 2008 to 2015. It is evident that growth is increasing in each year. Freight movements is also increasing in each year. That is why this industry has important contribution to gross-domestic product (GDP) of Indonesia (Tongzon, 2012;Ahmadi et al., 2018). Significant share in GDP has important contribution to the economic development of Indonesia. Thus, logistic industry has significant importance for economy.

    However, Indonesian logistic companies are facing various challenges. Corporate entrepreneurship is one of the crucial challenges facing by logistic companies. This problem is a constraint in the growth of these companies. It can be resolved with the help of management support, time availability for projects and flexible organization boundaries. As management support, time availability and organization boundaries has significant relationship with corporate entrepreneurship and business performance. Moreover, work discretion has crucial role in this mechanism. Companies should accept the failure of their employees. It will motivate the employees to take part in corporate entrepreneurship activities. Work discretion has important relationship with individual employees performance.

    Various studies have investigated the phenomenon of corporate entrepreneurship (Albasu and Nyameh, 2017); Zahra, 1996;Hornsby et al., 2002;Sharif and Butt, 2017). however, studies are missing with organizational boundaries, time availability and work discretion in Indonesian logistic industry. The relationship between corporate entrepreneurship and logistic business performance is shown in Figure 2. Therefore, objective of this study is to address the relationship of corporate entrepreneurship and business performance among Indonesian logistic companies. Moreover, the other objectives are given below;

    1. To address the relationship between flexible or-ganizational boundaries and logistic business performance.

    2. To address the relationship between time availa-bility and logistic business performance.

    3. To address the relationship between management support and logistic business performance.

    4. To examine the moderating role of work discre-tion.

    2. LITERATURE REVIEW

    In the literature the organizational performance has carried out as dependent variable. In particular, in the field of organizational strategy the business performance has been engaged for growth and more understandings (Adams et al., 1985). Maldonado-Guzman et al. (2018) mentioned that researchers have redirected their concentration towards organizational performance as a basic development. In this literature of organization performance, extensive research is carried out to examine various factors or mechanism which effect on performance (Purnama, 2014). Notwithstanding, the literature on organizational strategy has not given any definition that could be satisfactory to all relationship in all circumstances (Küçükkocaoğlu and Bozkurt, 2018;Johannessen et al., 1999). This has additionally made a further discussion in the writing of organizational strategy and key administration on operationalizing the business performance. In a similar direction (Antony and Bhattacharyya, 2010) characterized business performance as organizational achievement measure as to making and conveying incentive to its inward and outer clients.

    It is critical to refer that the idea of business perfor-mance has been equally utilized with different terms, for example, firm performance and organizational performance. In the organizational dimension of investigating various variables have been investigated and connected powerful with business performance. The past investigations have comprehensively viewed those variables into two classes, for example, external components and inside variables of an organization because of the business performance. By further broadening the discussion, these researchers (Nadeem et al., 2018) have mentioned that in the testing world today, the business should consider inner organizational factors. Internal organizational factors include; organizational boundaries, time availability, management support and work discretion. All these factors are related to the corporate entrepreneurship which is shown in Figure 3. These elements are important in logistic/supply chain performance (Ul-Hameed et al., 2019).

    2.1 Flexible organizational boundaries and logistic business performance

    The literature emphasised on the significance of the boundaries that organizations set for their employees. Imperatively (Kuratko et al., 2014), expressed that organizational boundaries allude to perception of employees that the organization is sufficiently flexible, and its boundaries are motivating, coordinating, and empowering with positive behaviour. These boundaries guarantee the powerful utilization of assets that enable innovation. If the employees perceive that the boundaries are flexible, they performance better and generate new ideas.

    The technique for organization through which ideas are scrutinised, chosen and executed is given by organizational boundaries. On the opposite, (Maroofi et al., 2017) argued that organizations should not have standard working systems for jobs and the dependency on each work description of occupations and the reliance on tight employment descriptions and inflexible performance principles should be decreased, while, it was found during the examination on the private emergency clinics led by (Maroofi et al., 2017) that total performance benchmarks were extremely fitting in the instance of emergency unit. In this way, it is seen that the setting of the applications of organizational boundaries matters a lot. Further, Kuratko et al. (2014) expressed that organizational boundaries can guarantee the worthwhile utilization of the assets which enable innovation.

    Flexible organization boundaries encourage employees to work openly and innovation new thinks to enhance logistic company business performance. Flexible organization boundaries have positive influence on employee performance (Maurice, 2013;Malarvizhi et al., 2018). It increases the satisfaction level of employees which increases the performance (Santhi and Gurunathan, 2014).

    • H1: Flexible organizational boundaries have positive effect on logistic business performance.

    2.2 Time Availability and Logistic Business Per-formance

    Prior research proposed that in organizations the employees should be given extra time. This spare time could assist employees with performing better on their assignments which would eventually enhance business performance especially through bringing progress. The time availability factor has been given much importance as it is straightforwardly concerned about employees’ routine duties. This factor has been inquired with numerous organizational components, for instance, innovation. Mowlaei (2017) have announced that the significance of time availability with respects to learning and securing of new information is important. Additionally, while clarifying the significance of time availability (Chima et al., 2018) have proposed that employees might feel compromising because of absence of time availability for achieving their individual duties. Subsequently, it is basic for best administration to properly investigate time availability issue; as this issue is straightforwardly concerned about employee inspiration and assumes basic job in lightening their work pressure.

    More critically, in deciding the time availability, past studies could be additionally assessed, in such manner; a connection between corporate entrepreneurship and asset availability is accounted by numerous investigations including. The workers should be convinced that sufficient resources like time availability is entrepreneurial activity. Osasuyi and Mwakipsile, (2017) expressed that time can be utilized to assist the organizations so as to encourage entrepreneurial exercises.

    • H2: Time availability has positive effect on logistic business performance.

    2.3 Management support and logistic business performance

    Management support has been admired as one of the basic factors that encourages performance. The literature on organizational management has clarified administrative support into various perspectives. As indicated by Anigbogu and Nduka, (2014) management support is characterized as the degree where an organization make an environment that support towards its employees (in administrative or nonmanagerial positions); other than that, it sets up trust, and collaboration for achieving organizational objectives. On similar direction, top management support could conceivably impact employees (paying little respect to rank) to make good behaviour towards receiving new ideas.

    Additionally, literature proposed that the best management support is important; as indicated by them the best management support facilitates the procedure of new learning. Various studies found that management support has positive relationship with business performance.

    • H3: Management support has positive effect on lo-gistic business performance.

    2.4 Work discretion

    According to Anigbogu and Nduka, (2014) the notion of work discretion denotes to the ease of an organization’s structure, with respects to decision making process and the discretion (freedom) for taking actions regarding one’s own career in the lower (middle) ranked levels of management. It has significant relationship with corporate entrepreneurship and logistic performance. Freedom in decision making or any other activities has important role in ne idea generation. It increases the satisfaction level and innovation activities.

    It is indicated by Le et al. (2018) work discretion means activities for employees in enhancing their work related issues. Notwithstanding the over two clarifications of work discretion, Anyanwu et al. (2016) explained that work discretion should be decided with three variables: internal task environment, the organizational structure as well as the executive employees themselves. Essentially, past research additionally asserts that the advancement procedure of any organization is to a great extent influenced by the dimension of self-rule the organization gives to its employees including directors. From above discussion, it is clear that work discretion is fundamental for businesses. Mistake acceptance of the employees by management encourage the employees to make extra effort. Thus, form above discussion, following hypotheses are proposed;

    • H4: Work discretion has positive relationship with logistic business performance.

    3. RESEARCH METHODOLOGY

    Research method denotes the whole procedure adopted to carried out research study. Selection of re-search method must be consistent with the objectives of the study. The current study is related to the entrepreneurship. It highlighted the role of corporate entrepreneurship in logistic business performance. Therefore, quantitative research techniques are applied.

    Focus of this study is Indonesian logistic companies. However, unit of analysis is individual. The employees of these companies are selected to get response. Mosbah et al., (2017) provide sample in a series for inferential statistics. “Sample having less than 50 participants will observed to be a weaker sample; sample of 100 size will be weak; 200 will be adequate; sample of 300 will be considered as good; 500 very good whereas 1000 will be excellent.” In this study, 300 sample size is selected which is good.

    By using the survey questionnaire, questionnaires were distributed through email. It was not possible to cover whole Indonesia. That is why email survey used to collect response. In this process of data collection, only 35% response was received. According to Mosbah et al. (2017), in email survey, 30% response is sufficient. Moreover, PLS-SEM is used in this study as shown in below Figure 4

    4. RESULTS

    Figure 4 highlighted the whole data analysis method through which the results are obtained. Two step approach of PLS-SEM is used in this study by following the instructions of (Mosbah et al., 2017). It is based on two major portions, namely; outer model assessment and inner model assessment.

    In this study, minimum level of factor loadings 0.5 was considered. Campsite reliability (CR) was examined by considering threshold level 0.7 which follows the rec-ommendations of literature (Mosbah et al., 2017). Aver-age variance extracted (AVE) was considered 0.5. All the results are shown in Table 1 and Figure 5. AVE square root is given in Table 2. Additionally, discriminant validity is also given with the help of Heterotrait-Monotrait Ratio. Table 3

    After analysing the measurement model, structural model was examined to check the relationship between variables. In this process, partial least square (PLS) bootstrapping is used. Minimum level of t-value was 1.96 to accept or reject the hypotheses. It is shown from the Table 4, H1, H2 H3 and H4 is supported by the results. Because the t-value is above 1.96 and beta value is positive. Figure 6 shows the PLS bootstrapping in which the t-value is shown for all the relationships.

    Moreover, moderation effect is shown in Figure 7 and results are shown in Table 5. It is evident that mod-eration effect between management support and logistic business performance is significant and positive. In case of moderation effect between time availability and logistic business performance is significant and positive. Work discretion as moderating variable streng then the relationship between management support and logistic business performance, and time availability and logistic business performance. However, moderation effect between flexible organization structure and logistic business performance is not significant. Additionally, r-square is 0.791 which is substantial. Table 6

    5. CONCLUSION

    While analysing the data, it is found that corporate entrepreneurship has major contribution to logistic busi-ness performance in Indonesia. Higher corporate entre-preneurship activities at firm level increases the business performance among Indonesian logistic companies. It is found that if the boundaries of company are flexible, it motivates the employees to take part in various entrepreneurial activities. Moreover, enough time availability also has important role in project completion. Company management should provide extra time for any task. Thus, time availability has direct relationship with logistic business performance. Management support always has vital contribution to employee duties. Supportive management influence positively on their employees which is helpful to run operations smoothly and increase in business per-formance. Finally, it is found that work discretion also has role to boost business performance. More the level of failure acceptance by the organization, more will be the employee performance and business performance. Therefore, Indonesian, logistic companies should focus on internal organizational factors to boost corporate entrepreneurship and business performance.

    Figure

    IEMS-18-3-541_F1.gif

    Indonesian logistic growth (2008-2015).

    IEMS-18-3-541_F2.gif

    Theoretical framework of the study.

    IEMS-18-3-541_F3.gif

    Corporate entrepreneurship.

    IEMS-18-3-541_F4.gif

    PLS-SEM steps.

    IEMS-18-3-541_F5.gif

    Measurement model assessment.

    IEMS-18-3-541_F6.gif

    Structural model assessment.

    IEMS-18-3-541_F7.gif

    Structural model assessment (moderation effect).

    Table

    Measurement model results

    AVE square root (discriminant validity)

    Heterotrait-monotrait ratio (discriminant validity)

    Measurement model results

    Structural model results (moderation effect)

    Variance explained

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