Investigating the Role of Government Support in the Resource-Process-Performance Relationship in Indonesian Container Terminal Operations: An Empirical Study

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Laksmana, Teddy (2019) Investigating the Role of Government Support in the Resource-Process-Performance Relationship in Indonesian Container Terminal Operations: An Empirical Study. PhD thesis, Victoria University.


International seaborne trade has involved seaports as vital nodes of the global supply chain. Therefore, the performance standard of container terminal within the port plays a key role in logistics cost, trade facilitation, and operational competitiveness. In this context, the availability of resources is quite strategic, and that has been extensively researched (Bichou, 2013; Cullinane & Wang, 2010; Lee, Yeo, & Thai, 2014; Sun, Yuan, Yang, Ji, & Wu, 2017, p. 584; Wanke & Barros, 2015). The resources, from RBV perspective, are referred to as valuable, rare, inimitable, and non-substitutable (VRIN) to enhance the sustained competitive advantages (Barney, 1991). Nevertheless, resources that the firm can also exploit are likely to be a conventional type, albeit they offer a temporary competitive advantage (Ray, Barney, & Muhanna, 2004). The case is valid for Indonesia container terminal operations where resources are inadequate, and performance is negatively affected. Preceding studies have found a positive effect of resources and capabilities on firm performance (Huselid, 1995; Kuo, Lin, & Lu, 2017; Ray et al., 2004; Yang, Marlow, & Lu, 2009; Yang & Lirn, 2017). However, it is essential to note that capability and process, although used separately, this study uses them as just one construct “resourses”. As the resources are the set of assests and capabilities are the ability to successfully employ these resources to satisfy customers’ requirement (Lai, 2004), they are treated as antecedents to firm performance. The business process, on the other hand, is a routine task of processing these resources and delivers the finished products/services to the customers (Ray et al., 2004). This is central to this research that examines the influence of resources and business processes on the terminal service performance, which is under-investigated in literature. In term of strategizing the regulation and policy for port development, the institutional environment, financial support, privatization policy and other supportive regulations are beneficial for port firms to leverage their operations in the national and international level (Dunning, 2000; Hall & Soskice, 2001; Hoskisson, Eden, Lau, & Wright, 2000; Landau, Karna, Richter, & Uhlenbruck, 2016; Lazzarini, 2015). While government policy is not a direct resource, it can play supportive role to formulate an advantage for the organization to operate in a competitive business environment. Firms can utilize government support as a source of advantage (Hall & Soskice, 2001; Landau et al., 2016). Further, government supports the development of capital goods projects that facilitate the terminal operators to complete the tasks within the terminal. Further, terminal operators are also encouraged to add firm-specific tangible and intangible resources. Therefore, this research argues for government support and terminal operators’ assets as a bundle of resources used in the terminal operations. A study combining government support, firm resources, and logistics processes within a comprehensive framework and assessing their influence on terminal service performance is considered to be understudied in the area of port research. Building on the resource-based view and institutional theory, the aim of the research is to investigate empirically the relationship between resources, processes, and performance (RPP), a newly conceptualized theoretical model in a terminal container context. The processes as the mediator in the RPP relationship is also investigated. The study used cross-sectional survey data of 216 respondents from Indonesian container terminals. A structural equation modeling (SEM) was employed to test the hypothesized relationship between resources, processes, and performance constructs in a theoretical model. Results show that container terminal resources, both sourced from government and terminal operator firms, have positive and significant effect on logistics processes that in turn have a positive effect on service performance. Also, logistics processes mediate fully the relationship between container terminal resources and service performance. Resources, however, are not found to have a direct effect on terminal service performance. A mediation analysis confirmed that logistics processes act as a full mediator of the relationship between resources and service performance. The study offers significant theoretical and practical contributions. The theoretical framework developed to analyze the RPP relationship reveals that amalgamation of government support and firm resources is crucial to impact service performance, and this can be leveraged through configuration of logistics processes. Practically, the terminal managers need to understand that resource composition and accumulation alone cannot enhance the overall service performance. Instead, an adequate logistics process can mediate resource extraction to the optimum delivery of service performance.

Item type Thesis (PhD thesis)
Subjects Current > FOR Classification > 1503 Business and Management
Current > Division/Research > VU School of Business
Keywords structural equation modeling; government; Indonesia; Container Terminal Industry; logistics; supply chain
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